New Business Modelling Framework (NBMF)

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New Business Modelling Framework (NBM4) New Products & Business Development Michael Kozloff www.nbm4.com linkedin.com/in/mkozloff/ A method for becoming a digital enterprise, creating new business models & products, and commercializing them. v0.064

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3 Featured Product & Business Development Experience PROJECT CUSTOMER Development of the concept for local municipal government digitization System integrator Development of the digital transformation strategy of internal financial and production IT systems and development of the product vision for the new external digital services Top media holding Development of the M2M/IoT strategy and product management of IoT products and platforms with 30+ products and 70+ FTEs Top telecom operator Development of the business case for b2b marketplace platform Top telecom operator Development and launch of the b2b marketplace for commercial fleets owners Top telecom operator Development of the long-term strategy for the leading provider of telematics solutions Auto telematics developer Telematics as a service business and financial model development Auto telematics developer RPA (robotic process automation) market research and vendors recommendation Resource company AI (artificial intelligence) and VDA (virtual digital assistants) market research and vendors recommendation Resource company PC as a Service business model (PCaaS) development Cloud provider Development of IBM cloud services in Central and Eastern Europe with an achieved x3.5 business growth IBM Partner cloud ecosystem launch Top telecom operator Development of the business model, architecture, and product requirements for public cloud platforms beСloud , Nitec Business model development and launch of the IaaS cloud services provider De Novo / Active Cloud Development of the financial model and architecture for a private cloud platform Financial organization Development of the Microsoft Cloud Distributor business plan Microsoft distributor Development of the Business model of the fiscal data operator (FDO) FDO Analysis of the data center market development of an investment model for Tier III data center acquisition Large investment fund Development of the СPaaS (Communication Platform as a Service ) business model and sales excellence framework Zingaya / VoxImplant Development of customer ROI models for Microsoft Windows Server, Microsoft Enterprise Agreement, Microsoft Enterprise Search Microsoft Development of the Business case for launching cloud value-added services (VAS) Investment fund and telecom operator Customer ROI models development for Autodesk, Digital Design, Microsoft, EMC/Documentum, VMware, Security Code products 20+ different Management of VMware business in CIS with achieved x3 annual revenue growth VMware

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Three Methods for Starting New Businesses within Corporations 32 How to launch a new business: Three approaches that work.McKinsey >>> . Internal VC-like incubator Scale-up Factory Clean slate Description Internal employees develop ideas from the bottom up, pitch them to an internal venture-capital (VC) board, receive funding for initial-concept validation, and then build and scale the approved concepts Parent company sets up a fully owned but separate subsidiary exclusively dedicated to business building, This factory takes concepts from the parent and scales them as independent businesses Incumbents set up anew, fully independent start-up that leverages such advantages of the mother company as access to distribution channels, but is independent in its decision making Strategic posture Develop broad portfolio of businesses from well- developed pipeline of ideas; incubate multiple concepts Commit fully to building multiple businesses at scale. Typical focus is a portfolio of five to eight new businesses at any given time “Bet big” on a promising idea with significant investment and high speed to market Maturity of ideas Early stage: ideas validated and turned into minimum viable products (MVPs) prior to scaling Mature: typically strong, validated concepts or MVPs generated by parent’s R&D organization Medium: riskiest assumptions have been validated, but the business still needs to be built and scaled from scratch Proximity to core business Close: ideas are generated by internal employees in response to core-business needs, with the parent company remaining the new venture's key customer Arm’s length: factory ventures typically aim to support the core business as well as to acquire external customers Independent: separate legal entity, often as 100% daughter company with focus well beyond the incumbent organization's core focus Ecosystem role Business is buildable without strong collaboration with external partners, but partner solutions may be helpful to expand and scale the offering Parent/core business remains most important relationship, but external customers and partners are required to scale Attracting numerous external partners and customers often essential to building a viable business. Frequently important to be perceived as neutral in the market Source of capabilities Primarily internal, with external advisors included on the VC board Mix of internal and external, with the factory filling capability gaps (eg, digital skills) primarily through external hiring Primarily external for both leadership teams and broader staff Long-term target setup for new businesses Flexible: scaled business can be integrated back into the parent or spun out Independent, but closely aligned with the parent’s core activities Independent, standalone business collaborating with the parent. Exits to third parties also viable

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68 Example of Key Performance Indicators for Managing Product Teams and Products (2) 32 85% 6% 15% 40 000 13 000 50 000 723 6% Net Promoter Score (NPS) Retention rate Customer churn rate Conversion rate Customer Lifetime Value (LTV) Customer acquisition cost (CAC) Active users Support tickets Stickiness Bounce rate Consumer loyalty index. Request your customers to rate your product from 1 to 10. Measure of customer loyalty How many customers you lose over a period E.g., for conversions from trial versions to paid Indicates the revenue expected from customers in the long term Costs to acquire new users or new customers The counts of daily active users (DAUs) and monthly active users (MAUs) Amount of support needed by clients How often users use the product How often users leave the site or app after visiting one page › E.g., customers rating your product 8 or above as promoters. The other are detractors. › Calculate the % of promoters and detractors. › NPS = (% of promoters – % of detractors). › %, The customer retention rate = {(the total # of customers at the end of a time period – # of new customers onboarded during this period) x 100}/the total # of customers at beginning of the period › %, The customer churn rate = (the number of customers lost during a specific time period) x 100 / the total number of customers at the beginning of the period › %, The conversion rate = (the number of users that become paying customers) x 100/the total number of users. › LTV = average revenue per customer in a period x average customer lifetime › Projected LTV = (ARPA x Gross margin) / Churn › See Unit Economics for more details › CAC = customer acquisition costs over time / # of new customers acquired over time › = the relevant costs for securing and onboarding customers for a time period / the number of new customers acquired during that period Account for the following parameters: › The interaction; › The time period of the interaction Metrics › # DAU › # MAU › # of support tickets created › Stickiness ratio = daily active users (DAU) / monthly active users (MAU) › Bounce rate = (# of single-page sessions) x 100 / total # of sessions Fact: Vs plan:

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Brainstorming as a Method for Generating Better Ideas 155 Seven steps to better brainstorming. McKinsey 1. Know your organization’s decision- making criteria • “Think outside the box!” is an unhelpful exhortation if external circumstances or company policies create boxes that the organization truly must live within. 2. Ask the right questions Prepare 15-20 “right questions” that your team will explore in small groups during a series of idea generation sessions They should force your participants to take a new and unfamiliar perspective They should limit the conceptual space your team will explore, without being so restrictive that it forces particular answers or outcomes 3. Choose the right people Pick people who can answer the questions you’re asking Choose participants with firsthand, “in the trenches” knowledge 4. Divide and conquer Don’t hold one continuous, rambling discussion among the entire group for several hours. Conduct multiple, discrete, highly focused idea generation sessions among subgroups of 3 to 5 people. Each subgroup should focus on a single question for 30 minutes. Take the 15 to 20 questions you prepared earlier and divide them among the subgroups— about 5 questions each 5. On your mark, get set, go! After your participants arrive, but before the division into subgroups, orient them so that your expectations about what they will—and won’t—accomplish are clear. Each subgroup will thoughtfully consider and discuss a single question for 30 min. No other idea from any source—no matter how good—should be mentioned during a subgroup’s individual session. 6. Wrap it up Each subgroup privately narrows its own list of ideas to a top few and then share all the leading ideas with the full group to motivate and inspire participants The full group shouldn’t pick a winner. Close the workshop on a high note and describe exactly what steps will be taken to choose the winning ideas and how they will learn about the final decisions. 7. Follow up quickly Decisions and other follow-up activities should be quick and thorough. Senior leaders sort ideas into four buckets: move immediately to implementation planning, decide today to implement soon, assign a group to research the idea further, or reject right away. Team should have done the work upfront to understand the criteria senior leaders would use to judge its work >>> Preparation Better ideas and outcomes Most attempts at brainstorming are doomed. To generate better ideas—and boost the odds that your organization will act on them—start by asking better questions. We call our approach “brainsteering,” and while it requires more preparation than traditional brainstorming, the results are worthwhile: better ideas in business situations as diverse as inventing new products and services, attracting new customers, improving business processes…

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Revenue Model Mad Lib 188 Peer Insight, Business Model Design Toolkit You’ll want to use the revenue model mad lib (after the value proposition) to understand who will actually be buying this service, not just benefiting from it. How frequently will customers pay for this? Is it a subscription model or onetime fee? These are all questions you can test in the market with your users. It’s great to go into testing with an opinion, or a hypothesis, and either confirm or disconfirm it through your research. Who is your target user [persona]? Are they paying for it? Do they get value from your service/ product (the beneficiary)? What are their pain points that your offering seeks to address? ________lifestyle is _____________. When person USER’s ADJECTIVE ___________________________ , she is always having COMMON ACTIVITY THAT YOUR OFFERING ADDRESSES to _______________________________ TARGET USER PAIN POINTS WORD BANK & DEFINITIONS: USER Consumer An individual consumer is buying or benefiting from the offering Business A private or public organization is buying or benefiting from the offering Third-Party A third-party is buying or benefiting from the offering Shared/Co-Pay A group of buyers or beneficiaries share costs CHANNELS Online Search/Paid Ads User searches for a keyword and comes across your offering’s web page Social Media User comes across your offering organically or from a post you sponsor Word-of-mouth User hears about offering from an interaction with trusted contacts Direct salesforce User interacts with someone who represents your brand Retail/E-commerce User comes across your offering while shopping online or in-store Franchisee/Re-seller User comes across your offering while shopping online or in-store from a third-party vendor You define core features of your offering, key user benefits (use value prop on previous page) ON-RAMP Free Consultation User connects with a product representative to learn about the product’s value to them Product Preview User receives a virtual walk-through of the product, it’s features and how to maximize value Money-Back Guarantee User buys the offering and has the option to return it for a full refund Free Trial User tries the offering at no expense to them for a limited amount of time Referral Bonus User receives discount for referring/ being referred VALUE EXCHANGE Pay-Per-Use User pays every time they use the offering Subscription User pays a rate for offering on a fixed cadence One-Time User pays for the offering 1 time and gets unlimited access Free: Ads/Data User doesn’t pay for offering, but they create revenue through engagement Gain-Sharing User receives additional value as the business grows Freemium User accesses a basic version of the offering for free and can pay for add-on services/tools >>>

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Why we feel the past is better compared to what the future holds Declinism Why do we feel more strongly about one option after a third one is added? Decoy Effect Why do we tend to hold on to losing investments? Disposition Effect Why we tend to view two options as more distinctive when evaluating them simultaneously than separately. Distinction Bias Why can we not perceive our own abilities? Dunning–Kruger Effect Why do we mispredict how much our emotions influence our behavior? Empathy Gap Why do we value items more if they belong to us? Endowment Effect Other Examples of Cognitive Biases (2 of 5) https://thedecisionlab.com/biases/ 234 Why do we think others are in it for the money, but we’re in it for the experience? Extrinsic Incentive Bias Why do our decisions depend on how options are presented to us? Framing Effect Why do we have trouble thinking outside the box? Functional Fixedness Why do we underestimate the influence of the situation on people’s behavior? Fundamental Attribution Error Why do we think a random event is more or less likely to occur if it happened several times in the past? Gambler's Fallacy Why do we forget information that we just looked up? Google Effect Why do positive impressions produced in one area positively influence our opinions in another area? Halo Effect Why is our confidence disproportionate to the difficulty of a task? Hard-easy effect Why do we take mental shortcuts? Heuristics Why do we see unpredictable events as predictable after they occur? Hindsight Bias Why do we expect previous successful performance to lead to future successful performance? Hot-hand Fallacy Why do we value immediate rewards more than long- term rewards? Hyperbolic Discounting Why do we place disproportionately high value on things we helped to create? IKEA Effect Why are we more likely to offer help to a specific individual than a vague group? Identifiable Victim Effect

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(c)2019-2024, Michael Kozloff. The author(s) of the information provided in this document shall not be liable for any claims for damages incurred as a result of the actions of any end user of the document who relied on the information contained in it. The contents of this document may be used for informational purposes only and should not be considered as recommendations for specific situations, actions, or operations of the end user. The information is provided "as is" without warranty of any kind as to its completeness or timeliness, without any other express or implied warranty, and is subject to change at any time without prior notice to users. The opinions and comments expressed here are the personal views of the authors and are in no way associated with the position of third parties. Despite the efforts made by the authors, the data may contain inaccuracies and errors. Some links point to documents located elsewhere, such as websites on the Internet. The authors are not responsible for the content of these documents and cannot control the policies of their authors or owners regarding the use of the information contained therein. All materials and information presented in the document (including texts, photographs, video materials, audio recordings, illustrations, design, as well as the selection, arrangement, and systematization of the information presentation) is an object of intellectual property and is protected in accordance with the legislation on the protection of intellectual property. When publicly using these materials and information, in whole or in part, attribution to authorship is required. All trade names and trademarks used in this document belong to their respective owners and are used for reference and/or informational purposes only. The beginning of the use of the document means the consent of the user with the rules set forth here. All data in the document is for informational purposes only and under no circumstances is a public offer. 435 http://a3.mzstatic.com/us/r30/Purple4/v4/12/43/9a/12439a48-da32-8982-852b-8beb58df83da/mzl.ojgtvfnz.png Contacts

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