Business Modelsfor library

successM.J. D’Elia : University of Guelph

Computers in Libraries 2015 : Washington, DC

Welcome

Agenda๏ Business plans and models๏ Business model canvas๏ Customer profile map๏ Value map๏ Value propositions

Objectives๏ Learn fundamentals of business model design๏ Map different models for libraries๏ Develop customer profiles๏ Articulate a clear value proposition

Business Plans

Bad Business Planningbuilt on

assumptions(secondary data)

assumptionsconsidered

“facts”

“facts” are not challenged or

altered> > >

Bad Business Planningplan becomes static (it is not

rewritten)

company-centric

approach

productivity is measured against

plan> >

First contact

“No plan survives first contact with its customers.”

~ Steve Blank

Business Model Approachbuilt on

assumptions(secondary data)

assumptionsconsidered

“facts”

“facts” are not challenged or

altered> > >

built on observation(primary data)

assumptionsare

acknowledged

assumptions altered based on new

learning> > >

Business Model Approachplan becomes static (it is not

rewritten)

company-centric

approach

productivity is measured against

plan> >

model continues to be rewritten (dynamic)

customer-centric

approach

productivity is measured by performance

> >

Business Models

KeyPartners

KeyActivities

ValueProposition

CustomerRelationships

Channels

CustomerSegments

Cost Revenue

KeyResources

BUSINESS MODEL CANVAS

KeyPartners

KeyActivities

ValueProposition

CustomerRelationships

Channels

CustomerSegments

Cost Revenue

CUSTOMEREMOTION

KeyResources

KeyPartners

KeyActivities

ValueProposition

CustomerRelationships

Channels

CustomerSegments

Cost Revenue

INFRASTRUCTUREEFFICIENCY

KeyResources

KeyPartners

KeyActivities

ValueProposition

CustomerRelationships

Channels

CustomerSegments

Cost Revenue

CRUXKey

Resources

KeyPartners

KeyActivities

ValueProposition

KeyResources

CustomerRelationships

Channels

CustomerSegments

Cost Revenue

BALANCE

Building Blocks

Customer Segments

Customer segments“...defines the different groups of people or organizations an enterprise aims to reach and serve.”

~BMG, p. 20

Customer segments: Questions๏ For whom does the library create value?๏ Who are the most important customers/users?

Value Proposition

Value proposition“...describes the bundle of products and services that create value for a specific customer segment.”

~BMG, p. 22

Value proposition: Questions๏ What value does the idea deliver?๏ Which problem is being solved?๏ Which needs will be satisfied?๏ What bundles of products/services are offered

to each customer segment?

Channels

Channels“...describes how a company communicates with and reaches its customer segments to deliver a value proposition.”

~BMG, p. 26

Channels: Questions๏ How do the segments want to be reached? ๏ How are they reached now?๏ How is the library integrating with customer

routines?

Customer Relationships

Customer relationships“...describes the types of relationships a company establishes with specific customer segments.”

~BMG, p. 28

Customer relationships: Questions๏ What type of relationship does each segment

expect?๏ Which relationships have been established?๏ How are they integrated with the rest of the

model?

Revenue

Revenue streams“...represents the cash a company generates from each customer segment (costs must be subtracted from revenues to create earnings).”

~BMG, p. 30

Revenue streams: Questions๏ For what value are customers willing to pay?๏ For what do they currently pay?๏ How are they currently paying?๏ How much does each revenue stream

contribute to overall revenue?

Key Resources

Key resources“...the most important assets required to make the business model work.”

~BMG, p. 34

Key resources: Questions๏ What key resources do your value propositions

require?๏ distribution channels?๏ customer relationships?๏ revenue streams?

Key Activities

Key activities“...describes the most important things a company must do to make its business model work.”

~BMG, p. 36

Key activities: Questions๏ What key activities do your value propositions

require?๏ distribution channels?๏ customer relationships?๏ revenue streams?

Key Partners

Key partners“...describes the network of suppliers and partners that make the business model work.”

~BMG, p. 38

Key partners: Questions๏ Who are the key partners?๏ Who are the key suppliers?๏ Which key resources do you need from

someone else?๏ Which key activities do partners perform?

Cost

Cost“...describes all costs incurred to operate the business model.”

~BMG, p. 40

Cost: Questions๏ What are the most important costs inherent in

our business model?๏ Which key resources are most expensive?๏ Which key activities are most expensive?

Review

Business Model Canvas 101๏ Start with the customer segments๏ Create different value props for each segment๏ Changes to one section affect other sections๏ Cost and revenue balance on the value prop

Customer Profile Map

CUSTOMER PROFILE MAP

RevenuePains

Gains

Jobs

Jobs“Jobs describe the things your customers are trying to get done in their work or in their life.”

~VPD

Jobs: Questions๏ What is your customer trying to accomplish?๏ What tasks do they need to perform at work or

at home?๏ What is one thing that your customer absolutely

needs to accomplish?

Pains“Pains describe anything that annoys your customers before, during, and after trying to get a job done or simply prevents them from getting a job done.”

~VPD

Pains: Questions๏ What are your customers frustrations and

annoyances?๏ What keeps them up at night? What are their

big fears?๏ What takes them too much time? costs too

much money? requires too much effort?

GainsGains describe the outcomes and benefits your customers want.”

~VPD

Gains: Questions๏ Which savings would make your customers

happy? In terms of time, money or effort.๏ What would make your customers’ lives easier?๏ What do they dream about? Aspire to be?

Value Map

VALUE MAP

Pain Relievers

GainCreators

ProductsServices

Pain relievers“Pain relievers describe how exactly your products and services alleviate specific customer pains.”

~VPD

Pain relievers: Questions๏ What could you do to produce savings?๏ What might make customers feel better?๏ What could you do to solve under-performing

solutions?

Gain creatorsGain creators describe how you intend to produce outcomes and benefits that your customer expects and wants.

~VPD

Gain creators: Questions๏ What could you do to exceed customer

expectations?๏ How can you help your customers look good?๏ What desires can you fulfill for them?

challengeDraft a clear

value proposition

Value Prop: Ad-Libs๏ Use the “fill-in-the-blanks” worksheet provided๏ Borrow from your customer profile map and

value map

wrap

oneBusiness models

summarize essential components

twoBusiness models depend

on clearly stated value propositions

threeBusiness models are

dynamic - changes are expected

fourBusiness models track

assumptions that require validation

fiveBusiness models align

resources to meet customer need

References

ReferencesBlank, S. & Dorf, B. (2012). The Startup Owner’s Manual. Pescadero, CA:

K&S Ranch.Osterwalder, A. & Pigneur, Y. (2010). Business model generation.

Hoboken, NJ: Wiley.Osterwalder, A., Pigneur, Y., Bernarda, G. & Smith, A. (2014). Value

proposition design. Hoboken, NJ: Wiley. Ries, E. (2011). The Lean Startup. New York: Crown Business.

Icons by: Maxim Basinski (aka vasabii) via Creative Market

Business Models forlibrary success

M.J. D’Elia

Computers in Libraries 2015 : Washington, DC

mdelia@uoguelph.ca @mjdelia