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Whats Your Business
Model?
Darlene Mann
General Partner
ONSET Ventures
[email protected]
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[ agenda ]
Business Model Definition
Why do they matter?
What are the components?
How is one developed?
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[ first point of confusion ]
TechnologyProductCompany Business
$$$
$$$
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How do you make money?
business model definition ]
A system that enables a company
to grow and make money
on a sustainable basis.
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[ why do business models
matter ? ]
Provides a common language
Enables analogies, hypotheses
Acts as a road map
Ensures focus on sustainable growth
Isolates problems, transition points
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[ what makes a business
model? ]
Complex system
Four main components:
Markets & Customers
Products & Services Channels of Distribution
Financial Engine
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second point of confusion ]
MarketBudget
BuyerProblem $$
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creating a business model ]
Technology Product Company Business
$
$$
$$
$
Market BudgetBuyerProblem $ $
OpportunityValue
Proposition DistributionStrategy Financial
Model
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business model components ]
Profile & Segmentation
Key Pain-points
Size of problem in $$s
Immediacy of problemLocation of $$s
Competition
Markets/Customers
Why & how wil l they buy?
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business model components ]
Products/ServicesWhole product definition
Cost to company
Cost to customer
Value & PricingAdd-on products
What do you offer?
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business model components ]
Markets/Customers Products/Services
DistributionChannel
How do you reach them?
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[ distribution channel ]
Channel Strategy Direct vs. Indirect
Marketing Strategy
Sales Support Partnering
Brand & Identity
Implementation Cycles Realistic adoption
Acceleration strategies
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business model components ]
Markets/
Customers
Products/
Services
DistributionChannel
Can you make money?
Financial Engine
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[ financial engine ]
Pricing & revenue model
Sales and implementation cycles
Cost structure and margins
If VC, assess attractiveness
money and time required
comparables and exit strategies
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[ hi-tech industry examples ]
High-end enterprise softwaresolutions
High volume shrinkwrap applications
Internet advertising
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[ developing business models ]
Find analogies
Project and reflect
Strong use of qualitative, anecdotal
data
Constructive failure
Know when to walk away
Be determined, not discouraged!
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[ VC issues ]
What VCs look for size of opportunity
quality of team
Valuation issues Whats hot
Amount of risk remaining in deal
How to approach VCs
By introduction
Executive summary
