Business Model Innovation, by Gigi Wang

  • Published on
    14-Feb-2017

  • View
    129

  • Download
    2

Embed Size (px)

Transcript

  • Business Model Innovation

    Gigi WangBoard Member & Chair Emeritus, VLAB

    Future Enterprise Webinar

    24 November 2015

  • About Me

    Born in Taiwan, grew up in US

    Stanford University BS/MS Engineering, UC Berkeley MBA

    Started career at 3 Fortune 100s Exxon, Pepsi, AT&T

    Moved to founding or early stage teams of start-ups InterNex (acquired), Pacific Internet (IPO, NASDAQ),Ascend (acquired), UptimeOne, QALA (acquired), Runa(acquired for $70m, 2013), and several FAILURES

    Currently:

    o Board Member/Chair Emeritus, MIT/Stanford VentureLab (VLAB)

    o Industry Faculty, UC Berkeley Center for Entrepreneurship

    o Managing Partner, MG-Team, entrepreneurship & innovation, international biz development consulting

  • How to make money!!??? Not just generate revenues, but be a profitable business.

    From Value Proposition to Value Extraction.

    Many historical business models to reference.

    Historical: Buy, License Software, Rent, Advertising

    Innovative models catch investors attentions.

    Innovative: Transforms processes, identifies new revenue

    The Digital World enables a whole new realm.

    Business Models

  • Market Trends

    1950s 1960s 1970s 1980s 1990s

    Mass

    production,

    speedy service

    Aggregation Specialization,

    door-to-door

    transportation

    Built to order,

    just in time

    manufacturing,

    direct to

    consumer sales

    Internet

    revolution,

    consumers as

    storefronts,

    online booking

  • Market Trends New Business Models

    1950s 1960s 1970s 1980s 1990s

    Mass

    production,

    speedy service

    Aggregation Specialization,

    door-to-door

    transportation

    Built to order,

    just in time

    manufacturing,

    direct to

    consumer sales

    Internet

    revolution,

    consumers as

    storefronts,

    online booking

    New types of companies emerged1950s 1960s 1970s 1980s 1990s

  • Identify Who Has the $$

    Plant-based organic pesticide

    for worms developed by Chao

    Yang Technology University in

    Taiwan

    Farmers had no money, and

    couldnt afford it

    CYUT identified the tea

    companies as the buyers who

    then provided it to the farmers

    to use

    http://www.google.nl/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FChaoyang_University_of_Technology&ei=rc7XVJuZOar6ygPco4LoAg&bvm=bv.85464276,d.bGQ&psig=AFQjCNEeqCT8mmZ9Qwb9hFadpZ5INSdGWQ&ust=1423515679350412http://www.google.nl/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FChaoyang_University_of_Technology&ei=rc7XVJuZOar6ygPco4LoAg&bvm=bv.85464276,d.bGQ&psig=AFQjCNEeqCT8mmZ9Qwb9hFadpZ5INSdGWQ&ust=1423515679350412

  • Basic Business Math

    PROFITS = REVENUES - COSTS

  • Business Model Challenges

    In 1998, no obvious way for free Internet Search to make money.

    The invention of Google Adwords changed everything.

    Adwords generates majority of Googles revenues.

    http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=YrP4eHkXXxK9zM&tbnid=9FjbhtfAKRPQDM:&ved=0CAUQjRw&url=http://en.wikipedia.org/wiki/History_of_Google&ei=GwQ4UqmBEoTKsgbTtIDgCA&bvm=bv.52164340,d.Yms&psig=AFQjCNFKy36NeGN2a-pSS8mtLQv853rXCw&ust=1379489171496407http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=YrP4eHkXXxK9zM&tbnid=9FjbhtfAKRPQDM:&ved=0CAUQjRw&url=http://en.wikipedia.org/wiki/History_of_Google&ei=GwQ4UqmBEoTKsgbTtIDgCA&bvm=bv.52164340,d.Yms&psig=AFQjCNFKy36NeGN2a-pSS8mtLQv853rXCw&ust=1379489171496407http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=31n7hczaSDqhPM&tbnid=Q89TXfsGc12ZyM:&ved=0CAUQjRw&url=http://www.targetedinternetmarketing.ca/&ei=0AQ4UuabCYTNswadsIHwCg&bvm=bv.52164340,d.Yms&psig=AFQjCNFx5AZ7rGm4Ent2_YoFZ33BYppr_g&ust=1379489351219432http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=31n7hczaSDqhPM&tbnid=Q89TXfsGc12ZyM:&ved=0CAUQjRw&url=http://www.targetedinternetmarketing.ca/&ei=0AQ4UuabCYTNswadsIHwCg&bvm=bv.52164340,d.Yms&psig=AFQjCNFx5AZ7rGm4Ent2_YoFZ33BYppr_g&ust=1379489351219432

  • In 1992, HP LaserJet III printer cost >$2000

    HP made money from the hardware margin

    Business Models Can Change

    Recurring revenue has longer lifetime value

    In 2015, HP printer cost < $100

    HP makes money on repeated sales of ink

    http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=YTNzGIgBi58QtM&tbnid=ijCtel56Zh4eLM:&ved=0CAUQjRw&url=http://pchardwarepro.com/tips-for-installing-new-hp-printer-on-your-computer/&ei=W4I3UrqQJcnvswaeroHgDg&bvm=bv.52164340,d.Yms&psig=AFQjCNF8HARZD8gmcqEZrj1LgGZichGDlQ&ust=1379455941376642http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=YTNzGIgBi58QtM&tbnid=ijCtel56Zh4eLM:&ved=0CAUQjRw&url=http://pchardwarepro.com/tips-for-installing-new-hp-printer-on-your-computer/&ei=W4I3UrqQJcnvswaeroHgDg&bvm=bv.52164340,d.Yms&psig=AFQjCNF8HARZD8gmcqEZrj1LgGZichGDlQ&ust=1379455941376642http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=JK7xgtsklx2YFM&tbnid=3EhOa-SUjOP7VM:&ved=0CAUQjRw&url=http://printer-scannernews.blogspot.com/2010_05_01_archive.html&ei=qYI3Up_EMYjesgbyv4CADg&bvm=bv.52164340,d.Yms&psig=AFQjCNF4SGnXz3J-m0EBr75FCYHuhxkL0A&ust=1379456025166417http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=JK7xgtsklx2YFM&tbnid=3EhOa-SUjOP7VM:&ved=0CAUQjRw&url=http://printer-scannernews.blogspot.com/2010_05_01_archive.html&ei=qYI3Up_EMYjesgbyv4CADg&bvm=bv.52164340,d.Yms&psig=AFQjCNF4SGnXz3J-m0EBr75FCYHuhxkL0A&ust=1379456025166417

  • Nothing is Really Free

  • Who are the Customers?

    User

    Buyer

    Partner

  • Make It Easy to Collect $$

  • Overcoming Barriers to Adoption

    Wholesale Solar sells solar power systems to homes.

    Big up-front costs to customer ($50K) huge barrier to adoption.

    Solar City overcame barrier to adoption with:

    Buy option OR

    Lease option which is $0 down, monthly lease price less than price of energy than from utility. SolarCity revenue from lease AND revenue from excess solar generated energy sold back to utility.

  • Free Accelerates Adoption

  • Premium Price for Full Product

  • Collaborative Consumption

    People can rent their homes, apartments, or rooms to anyone else

    Across 190 countries, over 15 million nights have been booked

    Rent your car when youre not using it (and make $$)

    Services handles payment and insurance elements

  • Crowdsourcing

    In a world with too little

    time, too few resources, harness the power of the crowd

    for Content, Processes, Brainpower, and Funding, more

  • Let the Crowd Evaluate

    Crowd/ community

    provides ratings for

    the buyers and sellers

    People choose to

    make a transaction or

    not based on ratings

    eBay no longer has to

    provide the services to

    hold funds in escrow

    til product is received

    satisfactorily (Reduces

    COSTS)

  • User Generated Content

  • Crowdsource Brain-Power

  • Crowd Funding

  • Monetizing Data

    http://blog.fundinggates.com/2013/01/monetizing-data-the-holy-grail-of-21st-century-businesses/http://blog.fundinggates.com/2013/01/monetizing-data-the-holy-grail-of-21st-century-businesses/

  • Shopping app for dealsby merchants, by location, and more

    Business model is NOT traditional referral fee or revenue share

    BK is packaging and selling aggregate consumer data

    Transaction-based to Data-based

  • Google All About Collecting Data

    Google services are all free (or are they??). Nothing is free in this world

    They are collecting our behavior data, analyzing it, and then monetizing it, primarily by delivering targeted advertising.

  • Selling Data is Not A New Concept

    Safeway Stores

    originally installed bar

    code scanners for

    inventory control.

    Then, started

    aggregating data,

    analyzing it, and selling

    it as market research as

    early as 1990.

  • Skin Vision database of cancers

    Largest melanoma

    Database worldwide

    Portfolio of >100K

    downloads

    >1.000 professionally

    diagnosed pictures of

    Suspicious moles

    Monetizing data

  • Licensing Tech vs Selling Licenses

    Bell Labs developed holographic storage solutions

    Licenses technology to Akonia

    One-time, monthly, yearly

    Akonia is the startup launching the commercial product to the market

    Norton has developed an anti-virus software

    Sells licenses to users

    Yearly, multi-package license

    Provides recurring revenue

  • Paid to Work or Play@!!?

    $1800/month

    $2000/month

  • Play games Make money!

  • Berkeley Method of Entrepreneurship

    Come join the BMOE Bootcamp @ UC Berkeley (January 11 14, 2016)http://scet.berkeley.edu/bmoe-bootcamp/

    mailto:Gigi.wang@mg-team.com

  • Gigi WangBoard Member, MITEF/Stanford Venture Lab

    Industry Fellow, UC Berkeley Sutardja Center for Entrepreneurship

    Managing Partner, MG-Team LLC

    THANK YOU!

Recommended

View more >