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Better Business Models

19497c940b48ed4b535205cec31a0ee7?s=47 nickkeyko
February 26, 2014

Better Business Models

A presentation to University of Alberta Engineering students on the best practices for building a Business Model Canvas, an overview of the Business Model Mechanics and introduction to the Value Proposition Canvas.

19497c940b48ed4b535205cec31a0ee7?s=128

nickkeyko

February 26, 2014
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Transcript

  1. Better Business Models

  2. Outcome: ! Provide you with the best practices for building

    your Canvas. 1
  3. Outcome: ! Provide you with an overview of the Business

    Model Mechanics 2
  4. Outcome: ! Introduce the Value Proposition Canvas. 3

  5. “No business plan survives the first contact with customers!” !

    - Steve Blank
  6. Business model: ! describes how an organization creates, delivers, &

    captures value
  7. Business Model Canvas: ! a visualization of your business model

  8. images by JAM customer segments key partners cost structure revenue

    streams channels customer relationships key activities key resources value proposition images by JA customer segments key partners cost structure revenue streams channels customer relationships key activities key resources value proposition customer segments customer relationships value proposition images by JAM customer segments key partners cost structure revenue streams channels customer relationships key activities key resources value proposition images by JAM customer segments revenue streams channels customer relationships ey es key ces value proposition customer segments revenue streams channels customer relationships key ies key rces value proposition
  9. Each building block enforces the other.

  10. Best Practices for using the business model canvas: 6

  11. You can start with any building block. 1

  12. Avoid writing on the canvas. 2 Use Post-it notes!

  13. Never use bullet points. Ever. 3 • blah • blah

    • blah • blah • blah • blah • blah • blah • blah • blah • blah • blah
  14. Instead, use 1 or 2 words per post-it. 3 RETAIL

  15. Don’t get held up by too much blah, blah, blah.

    4
  16. Avoid too much detail. 5 Our main customer segment is

    new, young mothers; aged 25-35; living in Edmonton; with 2 cars; 1 dog; and maybe a cat!
  17. Be precise for every building block. - We are looking

    at the big picture! 6
  18. You can start with any block. 1 2 3 4

    5 6 Don’t write on the canvas - use post-it notes. Never use bullet points. Instead, use 1 or 2 clear words. Don’t get held up by too much blah, blah, blah - just start! Avoid going into too much detail. Be precise for every building block.
  19. An Example: ! Nespresso’s Business Model

  20. KEY PARTNERS KEY ACTIVITES VALUE PROPOSITION CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS

    KEY RESOURCES CHANNELS REVENUE STREAMS COST STRUCTURE NESPRESSO POD SYSTEM MACHINE MANUFACTURER OFFICES JOINT VENTURE WITH MANUFACTURER Failed PATENTS
  21. KEY PARTNERS KEY ACTIVITES VALUE PROPOSITION CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS

    KEY RESOURCES CHANNELS REVENUE STREAMS COST STRUCTURE HOUSEHOLDS AQUIRE & LOCK-IN RETAIL NESPRESSO MACHINES BRAND PATENTS MARKETING MACHINE MANUFACTURER MARKETING & BRANDING 1 X MACHINE SALES PRODUCTION REPETITIVE POD SALES NESPRESSO WEBSITE MAIL & CALL CENTRE NESPRESSO STORES DIRECT B2C DISTRIBUTION PRODUCTION DISTRIBUTION CHANNELS COFFEE PRODUCTION FACILITES COFFEE GROWERS B2C DISTRIBUTION NESPRESSO PODS
  22. Increased price per gram of coffee by 600% - 800%

    $
  23. Average growth of 30% p.a. since 2000 $

  24. Global sales of over $3.8 billion $

  25. Still one of Nestlé’s fastest growing brands $

  26. The same technology, product, or service can have many different

    business models.
  27. The right business model can be the difference between success

    & failure for the same product.
  28. Outcome: ! Provide you with an overview of the Business

    Model Mechanics. 2
  29. None
  30. Switching Costs ! How easy or difficult is it for

    customers to switch to another company? 1
  31. None
  32. Recurring Revenues ! Is every sale a new effort or

    will it result in follow-up revenues and purchases? How evenly distributed are your revenues through the year? 2
  33. None
  34. Earn Before You Spend ! Are you earning money before

    you are spending it? 3
  35. None
  36. Cost Structure ! Is your cost structure substantially different and

    better than those of competitors? 4
  37. None
  38. Getting Others to do the Work ! How much does

    your business model get customers or third parties to create value for you? 5
  39. None
  40. Scalability ! How rapidly and how easily can you grow

    your business model without hitting roadblocks (e.g. infrastructure, customer support, etc.)? 6
  41. None
  42. Protection From Competition ! How much is your business model

    protecting you from your competition? 7
  43. None
  44. Switching costs 1 2 3 4 5 6 7 Recurring

    revenues Earn before you spend Game changing cost structure Getting others to do the work Protection from competition Scalability
  45. Outcome: ! Introduce the Value Proposition Canvas. 3

  46. None
  47. Nick Keyko @nickkeyko nick@liftinteractive.com

  48. Acknowledgements • Alex Osterwalder • www.businessmodelgeneration.com • IDEO & Design

    Thinking • Eric Ries & Lean Startup www.businessmodelgeneration.com