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Fine Tuning the Business model Vivek Agarwal Feb 21, 2014
4 Questions for Biz Plan
• Who is your customer?
• Why will he pay you?
• How will you reach them?
• How large and profitable can it be?
Two sides to every Coin
(you have to die to go to heaven!)
You got to answer this question first
Jim Morrison Narayan Murthy
OR
What do you want your pie to look like?
Total Value – 10 cr
Your share – 100%
Your value – 10 cr
Total Value – 1000 cr
Your share – 10%
Your value – 100 cr
1
Scenario 1 Scenario 2
Watch the size
Must match your capability level
• Smaller scope • Too small for the “big guys”
… with killer potential!
• Need time to acquire capability
V / s
What is the model
Innovation Efficiency
What is the right rate of growth for you?
How much should you plan
Ready. Aim. Fire. FIRE. FIRE. FIRE
OR
How do you balance this
“World Class
Execution
Takes time”
“I have to meet
my monthly
payroll”
Watch who you listen to
“Core
Competence”
“Customer is
asking for
services we
currently do
not provide”
v/s
Can there be TOO much Focus?
“We know
how to service
this market”
“There are
many more
tempting
opportunities”
v/s
The Age-old debate!
Quality v/s Speed
One Thought
Minimum Viable Product (MVP)
MVP
• Simplified Offering that reveals how real customers – not cloistered focus groups-respond
• Actionable Metrics – not “Vanity Metrics”
• Iterating through a “Build-Learn-Measure-Loop”
• Enterprise v/s consumer
• Best Value Proposition
• Large v/s Small
Customer Segments
16
• What is the key problem that it is solving?
• Are there too many features / Services?
• Is the offering too complex?
Product – Value Proposition
17
• Not an easy answer
• Scalability, reach, profitability
• Variable v/s Fixed costs
Channels
18
• Fixed v/s Variable
• Components
• Relative importance
Cost Structure
19
• One-time v/s annuity
• Growth potential
• Objective
Revenue Streams
20
• Customers
• Fund Raising
• External Stakeholders
Key Activities
21
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