Business Model - Startup Seminars

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BUSINESS MODEL DESIGN TOOLS

@PSTURROCK

Image from “Business Model Generation” Osterwalder & Pigneur

http://leanstack.com

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VENTURE DESIGN IN THREE ACTS

I. Why does the world need your product or service?

II. What difference does your product or service make?

III. How are you going to make it happen?

MAKE STUFF PEOPLE WANT!

EXECUTION

EXECUTION

FOUNDER/MARKET FIT

WHERE DO I START ?

Photo credit Ryan McGuire gratisography.com

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Who already has an idea?

1. FIND A NEED2. LEVERAGE YOUR ADVANTAGES

“IF I BUILD IT, THEY WILL COME”

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–Guy Kawasaki

“Make Meaning”

– Paul Graham

“Make stuff people want”

“TOO MANY ENTREPRENEURS WHO FOLLOW THE LEAN METHODOLOGY GET STUCK IN A PRODUCT SPIN, CONSUMED WITH MAKING AND HONING THEIR MINIMUM VIABLE PRODUCT. WHILE THE MVP IS CRITICAL, IT’S MISSING ITS DANCE PARTNER, THE MINIMUM VIABLE SEGMENT.”

Michael Skok, North Bridge Venture Partners

SEGMENTATION BY JOB TO BE DONE

image by Dylan Walters flickr.com

J O B T O B E D O N E

• Circumstance is more important than customer demographics, product attributes, technology

• Good innovation solve problems with no previous solution or only inadequate ones.

• Jobs are never about function

• What are the social and emotional dimensions?

TEXT

JOB TO BE DONE

▸ Goal

▸ Motivation

▸ Alternatives

▸ Constraints

▸ Budgets

▸ Margins

▸ Culture & Process

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G E T O U T O F T H E B U I L D I N G !

Value= Opportunity/ Risk

T H E B E S T C U S T O M E R S

1. Have a problem

2. Know they have it

3. Have a budget

4. Are hacking their own solution

“The Mom Test” Rob Fitzpatrick

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WHY: What’s the gap?

Copyright © Slingshot Venture Development Ltd. 2016 All rights reservedKim & Mauborgne “Blue Ocean Strategy”

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Affordability Weight Display Power Telephony

Laptops Smartphones

Copyright © Slingshot Venture Development Ltd. 2016 All rights reservedKim & Mauborgne “Blue Ocean Strategy”

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Affordability Weight Display Power Telephony

Laptops Smartphones Ipad

Copyright © Slingshot Venture Development Ltd. 2016 All rights reserved

via Seth Godin

VALUE POSITIONING

▸ Difference

▸ Risk

▸ Convenience

▸ Cost (not the same as price)

FOUNDER MARKET FIT

CAPABILITIES

DEMAND

INTERESTS

‣ Like to do

‣ Curious about

‣ Care about

‣ Skills

‣ Connections

‣ Resources

‣ Protagonist

‣ Gap

‣ Money

Photo credit: Dani Alvarez Cañellas via VisualHunt / CC BY-NC-ND

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Sources of Innovation

1. Market insight (epiphanies)

2. Business model innovation

3. Technology

4. Design

REVENUE MODEL

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WHAT IS A REVENUE MODEL?

▸ Value Exchange Contract

▸ Deliverables

▸ Payment

▸ Risk Allocation

▸ Subset of Value Proposition

▸ Defines Revenue Streams & Unit Economics

DELIVERABLES

- Features

- Service

- Property rights

TEXT

BASIC MODELS

▸ Asset Sale

▸ Licensing

▸ Usage

▸ Intermediation

▸ Auction

▸ Subscription

▸ Advertising

▸ Consulting

▸ Freemium

Deliverables

Service

Rights

Commitment

Termination

Renewal

Guarantees

Price

Payment Terms

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Revenue = Customers x Unit Price x Frequency

Alternative Revenue Models

PRODUCTS Sell Usage Subscription Rent License

SERVICES Teach Consult Curate Connect Aggregate Manage

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Customer Intimacy

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The Journey from Niche to Scale

Product Innovation

Operational Excellence

Service Experience Product

Examples

‣ McDonald’s

‣ Amazon

‣ The iPod

‣ Dropbox

‣ AirbnB

‣ Metro

‣ Zipcar

‣ Uber

‣ ?

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THE KEY CHALLENGE: CLARITY

▸ What does your customer really need or want?

▸ What part of your solution is relevant?

▸ Articulate connection between solution & needs

▸ Make sure your difference fits your capabilities

DISCUSSION

THANK YOU

@PSturrock paul.sturrock@gmail.com