Better Business Models - Speaker Deck

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Better Business Models

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Outcome: ! Provide you with the best practices for building your Canvas. 1

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Outcome: ! Provide you with an overview of the Business Model Mechanics 2

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Outcome: ! Introduce the Value Proposition Canvas. 3

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“No business plan survives the ﬁrst contact with customers!” ! - Steve Blank

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Business model: ! describes how an organization creates, delivers, & captures value

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Business Model Canvas: ! a visualization of your business model

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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

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Each building block enforces the other.

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Best Practices for using the business model canvas: 6

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You can start with any building block. 1

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

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

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

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Don’t get held up by too much blah, blah, blah. 4

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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!

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Be precise for every building block. - We are looking at the big picture! 6

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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.

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An Example: ! Nespresso’s Business Model

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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

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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

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Increased price per gram of coffee by 600% - 800% $

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

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Global sales of over $3.8 billion $

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Still one of Nestlé’s fastest growing brands $

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

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The right business model can be the difference between success & failure for the same product.

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Outcome: ! Provide you with an overview of the Business Model Mechanics. 2

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Switching Costs ! How easy or difficult is it for customers to switch to another company? 1

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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

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Earn Before You Spend ! Are you earning money before you are spending it? 3

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Cost Structure ! Is your cost structure substantially different and better than those of competitors? 4

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Getting Others to do the Work ! How much does your business model get customers or third parties to create value for you? 5

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Scalability ! How rapidly and how easily can you grow your business model without hitting roadblocks (e.g. infrastructure, customer support, etc.)? 6

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Protection From Competition ! How much is your business model protecting you from your competition? 7

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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

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Outcome: ! Introduce the Value Proposition Canvas. 3

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Nick Keyko @nickkeyko [email protected]

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Acknowledgements • Alex Osterwalder • www.businessmodelgeneration.com • IDEO & Design Thinking • Eric Ries & Lean Startup www.businessmodelgeneration.com