Business Model Innovation Space

Business ModelInnovation Space

• Innovation Space– Task:

Develop a business model that will make the Innovation Space profitable and sustainable

Table of Contents

1. Business Model Walk Through2. 9 Building Blocks of Business Models3. Building Block Comparison4. Funding Options Explored

Brief Walkthrough of Models

Empirical Example

Business Models Overview

• Time-Use– Pay for time used

• Library– Pay membership fee– Pay overage or late fees

• Revenue Sharing– No usage charges– Returns are based on

productivity of designs

*** The majority of the 9 Building Blocks are very similar for each business model, however, the main differences are highlighted

How would the Innovation Space business work?1.)

Cart…Meet John…

… John is interested in making the cart he learned about during his iSPACES class

Business Model Walkthrough2.)

Unfortunately, John doesn’t have the necessary tools to build the cart…

… but WAIT!

Business Model Walkthrough3.)

John realizes that the Innovation Space has all those materials!

… so off he goes!

Choose your business model…

Rolls Royce Model Library Model Revenue Sharing ModelTime-Use Model

We took time in choosing three business model options that we will attempt to validate during a trip to Tanzania.Try them out by clicking the respective images to start!

Walkthrough: Time-Use4.)

John arrives at the Innovation Space and now he must sign in to indicate he is using the equipment…

… once signed in, John is free to use any of the equipment available!

JOHN•Tools-Hammer- Etc.•Space- A1


Although John has all the basic materials to build a cart, he needs a Universal Connector to bind all his materials together

… so John pays the Innovation Space Operator for a number of Universal Connectors that are uniquely offered that the Innovation Space.

$$$

***To learn more about the Universal Connector, visit THIS PAGE***

http://ispacespsu.wordpress.com/overview/innovation-space-2/


John uses the equipment and workshop area provided by the Innovation Space to create his cart!

… now he makes his way toward the check-out counter to sign out.


Back at the check-out counter, John signs out, indicating that he is finished with the space he occupied and the tools he used…

… now for the payment

JOHN•Tools-Hammer- Etc.•Space- A1


John now pays the Innovation Space Operator a fee for the time he spent using certain tools and space

… the Innovation Space Operator collects the fee with hopes of making a profit or investing that money back into the Innovation Space itself!

$$$

Summary:What was the value exchange?

•John gets access to valuable resources which eventually leads to him walking home with a cart that he can use or sell

•The Innovation Space gets money in exchange for the universal connectors sold to John, as well as the fees he paid for the time he spent in the Innovation Space

Try business model other options…?

Click below to go back to the options page to try out the

other models

Walkthrough: Library Model4.)

John arrives at the Innovation Space and now he must pay his upfront membership fee to the Innovation Space Operator…

… once he’s paid, John is free to use any of the equipment available!

$$$


Although John has all the basic materials to build a cart, he needs a Universal Connector to bind all his materials together


$$$





… because John is a member he is free to keep working or to take his cart and head home!

What was the value exchange?


•The Innovation Space gets money in exchange for the universal connectors sold to John, as well as the periodic membership fee that John will have to pay to keep using the Innovation Space



other models

Walkthrough: Revenue Share Model4.)

John arrives at the Innovation Space and signs up to become a member. However, unlike the Library Model, John does not pay a fee…

… once he’s signed up, John is free to use any of the equipment available!

$$$

5.)Although John has all the basic materials to build a cart, he needs a Universal Connector to bind all his materials together


$$$


Walkthrough: Revenue Share Model




… now John needs to use the cart to pay back the Innovation Space for access to the tools and work area


John has two primary ways to make money from the cart:1. He can sell the cart2. He can make money from the use of the cart

… after John receives the money from the sale or use of his cart he then returns some of the funds to the Innovation Space

$$$


•The Innovation Space gets money in exchange for the universal connectors sold to John, as well as the returns he will pay back to the Innovation Space based on what he does with his project

Summary:What was the value exchange?



other models

Outline9 Building Blocks of Business Model(s)

iSPACES

Continue with Slideshow to view:

OrClick below to return to

Business Model Walkthroughs

#1

***Click the # next to any heading to jump to a comparison slide for that business model block***

#2


#3


#4


#5


#6


#7


#8


#9


Model Comparison

Comparing the 9 Building Blocks of the Business Model(s)

Customer Segments

Time-Use Model

• Any Local interested in:– Building things for

themselves– Creating guides to build

things– Providing information

about location and specs of materials

– Possibly someone who is willing to build something for another person

• Specific Users:– Students of Tumaini– Community Members– People traveling through

who need info about local materials

Library Model Revenue Sharing Model


themselves– Creating guides to build

things– Providing information about

location and specs of materials


• Specific Users:– Students of Tumaini– Community Members


themselves– Creating guides to

build things– Providing information

about location and specs of materials


• Specific Users:– Students of Tumaini– Community Members

Value Propositions

• Students– Entrepreneurial

Opportunity– Hands-on Education

• Users of Innovation Space– Members only place to do

work– Access to:

• Materials• Building guides• Building ideas

• Innovation Space Champion– Job– Business Expansion

• Local Material Shops– Marketing and direction

toward their store



• Users of Innovation Space– Free place to do work– Access to:




toward their store

Rolls Royce Model Library Model Revenue Sharing Model



• Users of Innovation Space– Place to do work– Access to:




toward their store

Time-Use Model

Channels

• Materials for:– Innovation Space

construction– Construction of cases

projects• Building Guides

– Provided through Cases & input from local users

• Material Location Information– Provided by users of

the innovation space as a crowdsourced knowledge





• Material Location Information– Provided by users of

the innovation space as a crowdsourced knowledge





• Material Location Information– Provided by users of the

innovation space as a crowdsourced knowledge

• Returns from projects– Items excluding capital

that the finished projects create


Customer Relationships

• Teachers Students– Personal Assistance– Mutual Learning

• I.S. Champion– Personal Assistance

• Could be replaced by automated service

• Students/I.S. Users– Self-service + User

Community





Community





Community• User I.S.

– Users need to have trust in the system, strong ties to other users to keep revenue returns flowing


Revenue Streams

• Innovation Space– Charge for time

use of:• Tools• Spaces• Building Guides• Local Materials

List

• Innovation Space– Charge periodic

membership fee– Free use of:

• Tools• Spaces• Building Guides• Local Materials

List

• Innovation Space– No usage or

membership fee– Users share profits

of the items made in the Innovation Space• Examples of returns:

– Crop from Greenhouse

– Battery Charge from windmill

– Basic Capital– Etc.


Key Resources

Pre-Construction• Materials for I.S.

– Need info from I.S. team

Post-Construction• Champion to manage I.S.• Information from

builders– Building Guides

• Edits to guides– Where to find materials

in community• Specs of material

(get as specific as possible with info)



Post-Construction• Champion to manage I.S.• Information from

builders– Building Guides

• Edits to guides– Where to find materials

in community• Specs of material

(get as specific as possible with info)



Post-Construction• Champion to manage I.S.• Information from builders

– Building Guides• Edits to guides

– Where to find materials in community• Specs of material (get as

specific as possible with info)

• Appropriate Mix of Cash and products being exchanged– Too little cash may destroy the

model

Rolls Royce Model Library Model Revenue Sharing Model

*** Refer to Innovation Space Materials list for more detail

Time-Use Model


Key Activities

Must Have:• Useable workspaces

& tools to keep locals spending time in I.S.– The more time spent

in the space the better the business fairs

• Working building guides– Without accurate

building guides, an entire time revenue stream is gone

Must Have:• Useable workspaces &

tools to provide incentive for locals to pay membership fee– The more time spent in

the space the more likely user are to renew membership

• Working building guides– Without accurate

building guides users are far less likely to find value in the entirety of the Innovation Space

Must Have:• Useable workspaces to

keep locals spending time in I.S.– The more time spent in

the space the better the business fairs

• Working building guides– Without accurate building

guides, an entire time revenue stream is gone

• Trust in the system– Believe that others will

follow rules of revenue sharing to keep Innovation Space running


Key Partners

• Innovation Space Champion– Manage and potentially

expand the space• Tumaini University

– Provide strong connection between the curriculum to be implemented and the space

• Local University students– Serve as ambassadors for the

space by displaying the potential successes of the program & innovation space

• Local stores which provide building materials– Direct locals to Innovation

Space a reciprocity due to the increased business the store may gain from the space

• Innovation Space Champion– Manage and potentially

expand the space• Tumaini University




• Local stores which provide building materials– Direct locals to Innovation

Space a reciprocity due to the increased business the store may gain from the space

• Innovation Space Champion– Manage and potentially expand

the space• Tumaini University




• Local stores which provide building materials– Direct locals to Innovation Space

a reciprocity due to the increased business the store may gain from the space

• Innovation Space Users– Space must provide enough of a

benefit to keep the user coming back for access

Library Model Revenue Sharing ModelTime-Use Model

Cost Structure

• Fixed– Initial cost of

Innovation Space• Variable

– Little cost aside from physical upkeep

– Costs may include:• Additional Tools• Universal

Connectors• Payment for I.S.

Champion• Rental Fees• Etc.













Library Model Revenue Sharing ModelTime-Use Model

Funding Options Explored

Funding

***We are currently not seeking to use the following sources as funding for iSPACES. However, they were considered during the initial brainstorming process***

What is Crowdfunding?• Accessing the collective funding power of a passionate and active

funding community• Through many small investments, any venture can become

funded as long as the venture has a compelling story and access to an audience of investors

• There are currently many websites which help with crowdfunding,. Most are focused on art, theater, and technology, but there are a number interested in global social ventures as well

Crowdfunding MethodsDefinitions

• Direct ownership of the enterprise is allowed.

• This model is very difficult due to financial regulations, some of the first equity based platforms have come to market.

• They enable direct investment and returns from investor to startup

• In many ways an equity model is the best model with regard to aligning investor and entrepreneur’s interests

• No ownership developed

• There is a previous agreement set where an investor receives a non-equity perk for investing– Example:

• Usually a protoype• Project specific

item, like a handwritten card or video

• Credit: Often done in film funding

• The investor transfers money to a bank that delivers micro-loans

• No equity is maintained, however, the entrepreneur has the obligation to pay back the loan

• After the bank receives the principal plus interest the intial loan is paid back to the investor

• This model is typically used to fund individuals who form small groups for the purpose of social capital

Equity Funding Incentive Funding Microfinancing

Crowdfunding MethodsExamples

• There are currently no functioning equity crowdfunding ventures active. However, crowdcube is attempting to do this in the near future.

LoveHerCover• Incentives Offered

– “If you invest anything, you'll get a beautiful thank you video from one of the girls you're helping in Liberia.”

– “And If you invest $100 or more, you'll get one of the first 200 laptop slip covers + the thank you video.”

Abunzubumwe Rusizi Group• Theogene Sibomana is a rice

farmer and the leader of the group Abunzubumwe. He is going to use his loan to buy fertilizer and to pay for labor for his rice-growing business. He would like to become a modern farmer in the Rusizi district and to educate his children well.

• They are seeking $4,075, of which $2,325 has already been funded

Equity Funding Incentive Funding Microfinancing

http://www.crowdcube.com/

Documents

Business Model Innovation Space