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DESIGNING &TESTINGBUSINESS MODELSAlexOsterwalder.com   SteveBlank.com@business_design      @sgblank
?  where do I comefrom, what do I do?
)-:my workplace
)-:my current MVP
BusinessModelGeneration.com/toolbox                     iPad stencil, actual scale, template by hortis, le studio. Feb. 20...
this workshop day combines two global bestsellers                                     +BusinessModelGeneration.com        ...
Swiss Time Machine
1958
[sources: Henry Chesbrough, photo: life.com]
revenue growth of 41%compounded for the next 20 years                    [sources: Henry Chesbrough, photo: xerox.com]
Swiss Time Machine
2009
BusinessModelGeneration.com
1,000,000        new book titles were  published in the U.S. in ʼ10
11,000 new business books   appear every year
12% decline of sales in majorbookstore chains (ʻ07-ʼ09)
?so what did  we do?
we changed the product...
? would a big publishinghouse have taken us on    with this book?
No!
we changed the business model...
“   you canʼt write about    business model innovation    without an innovative    business model                   ”
$24.-
$36.-
$54.-
$81.-
$250.-
Results
#   in the top 10 of softcover    business books in the US
#   170ʼ000+ English #bmgen    copies in print (June 2011)
#   18 #bmgen translations    upcoming in 2011
more importantly...
business modelsenable (new) products and technologies and   help solve (entirely       new) customer            problems
the 100Million dollar     question
how do you search for the  right business model?
1   understanding    business models2   prototyping alternatives    of “what could be”3   evaluating your    business mode...
but hey,1    what is a     business       model    anyways?
?whatʼs abusiness model?
?   ?
BusinessModel Canvas
to describe, challenge,design, and inventbusiness models moresystematically
9   building    blocks
CUSTOMER SEGMENTS                    images by JAM
VALUE PROPOSITIONS                     images by JAM
CHANNELS           images by JAM
CUSTOMER RELATIONSHIPS                     images by JAM
REVENUE STREAMS                  images by JAM
KEY RESOURCES                images by JAM
KEY ACTIVITIES                 images by JAM
KEY PARTNERS               images by JAM
COST STRUCTURE                 images by JAM
key      value          customer            activities   proposition      relationships    key                            ...
The Business Model Canvas                     key               activities                                                ...
BusinessModelGeneration.com/canvas
illustration
how much less or more do the Swiss pay per gram of coffee consumed at homecompared to a decade ago?
600% to800%more
Nespresso   changed thebusiness model   for espresso
RESULTS
own recyclingcontainers
one of the fastest-growing businesses in   the Nestlé group
average growth of30% p.a. since 2000
global sales of3.8+ billion USD
Nespresso’s business Model     KEY                         KEY                           Value                   CUSTOMER ...
but Nespresso almost failed in1987 due to a nonperforming       business model
Nespresso’s 1987 Model    KEY                 KEY         Value         CUSTOMER         CUSTOMER PARTNERS            ACTI...
now Nestlé is building aportfolio of business models  in their coffee business
BusinessModelGeneration.com/canvas
prototype2     alternatives           and ask    yourself what          could be
? letʼs take some time towork on a really, really big   issue in the world?
access to propersanitation
2.6 billionpeople lack  access
4 out of 10 people in the world lackeven the most simple latrine to perform              their needs
* single-use toilet bag* self-sanitizing* biodegradable* turns into fertilizer* (mainly) targeted at poor people* low prod...
The Business Model Canvas   KEY              KEY       OFFER     CUSTOMER         CUSTOMERPARTNERS         ACTIVITIES     ...
minibrainstormingsession
come up with as many businessmodel ideas as possible for thePeepoo bag (not full Canvases)
* single-use toilet bag* self-sanitizing* biodegradable* turns into fertilizer* (mainly) targeted at poor people* low prod...
make rough    prototypes of thedifferent alternativesto analyze, evaluate and compare them
F rankGe  hry     [source: Sony Pictures]
[source: Sony Pictures]
[source: Sony Pictures]
[source: Wikimedia Commons]
?what does that have to dowith business models and     my organization?
no architect wouldbuild something that  resembles his first              sketch
?what does thatmean for us?
BusinessModelGeneration.com
business model prototypingnapkin sketch   Canvas   business case   field test
“   prototyping is the    conversation you    have with your    ideas                     ”             Tom Wujec
evaluate3       your    business      model      design
building               block                                                      building                buildin         ...
SWITCHING	  COSTSHow	  easy	  or	  difficult	  is	  it	  for	  customers	  to	  switch	  to	  another	  company?
with	    this	  amazing	  device	  you	  can	  have	  thousand	     songs	  in	  a	  pocket
...and	     you’r	  screwing	  us	     because	  it	  has	  just	  become	  more	  difficult	  to	       switch	  devices
RECURRING	  REVENUESIs	  every	  sales	  a	  new	  effort	  or	  will	  it	  result	  in	  follow-­‐up	  revenues	  and	  p...
EARN	  BEFORE	  YOU	  PAYAre	  you	  earning	  money	  before	  you	  are	  spending	  it?
GAME	  CHANGING	  COST	  STRUCTUREIs	  your	  cost	  structure	  substanSally	  different	  and	  beTer	  than	  those	  of...
phone	  calls	  will	  be	  totally	   free	  in	  the	  future
GETTING	  OTHERS	  TO	  DO	  THE	  WORKHow	  much	  does	  your	  business	  model	  get	  customers	  or	  third	  parSes...
go	  ahead	  and	  share	  on	  your	  facebook	          page...
...that	   will	  make	  my	  plaWorm	  more	    valuable...
...and	  raise	  my	  plaWorm’s	     value(aSon)...
SCALABILITYHow	  rapidly	  and	  how	  easily	  can	  you	  grow	  your	  business	  model	  without	  hi[ng	  roadblocks	...
VIRALITY/NETWORK	  EFFECTHow	  viral	  is	  your	  business	  model?	  How	  substanSal	  are	  the	  benefits	  to	  share...
PROTECTION	  FROM	  COMPETITIONHow	  much	  is	  your	  business	  model	  protecSng	  you	  from	  compeSSon?
a product/technology focus is    just not enough           anymore
break-outsession
BusinessModelGeneration.com/canvas
The Business Model Canvas   KEY              KEY       OFFER     CUSTOMER         CUSTOMERPARTNERS         ACTIVITIES     ...
testing4      business     models with       customer    development
a business model might lookgreat on paper...                 building                  block                              ...
... a set of hypotheses        guess                guess           guess                    guess              guessguess...
StevenBlank.com/books.html
THANK YOU!            BusinessModelGeneration.com  AlexOsterwalder.com / @business_design             BusinessModelAlchemi...
BusinessModelGeneration.com/toolbox                     iPad stencil, actual scale, template by hortis, le studio. Feb. 20...
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
Talk with Steve Blank at true ventures
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Transcript of "Talk with Steve Blank at true ventures "

  1. 1. DESIGNING &TESTINGBUSINESS MODELSAlexOsterwalder.com SteveBlank.com@business_design @sgblank
  2. 2. ? where do I comefrom, what do I do?
  3. 3. )-:my workplace
  4. 4. )-:my current MVP
  5. 5. BusinessModelGeneration.com/toolbox iPad stencil, actual scale, template by hortis, le studio. Feb. 2010. http://hortis.lestudio.chdate: project: screen:author:
  6. 6. this workshop day combines two global bestsellers +BusinessModelGeneration.com SteveBlank.com/books.html
  7. 7. Swiss Time Machine
  8. 8. 1958
  9. 9. [sources: Henry Chesbrough, photo: life.com]
  10. 10. revenue growth of 41%compounded for the next 20 years [sources: Henry Chesbrough, photo: xerox.com]
  11. 11. Swiss Time Machine
  12. 12. 2009
  13. 13. BusinessModelGeneration.com
  14. 14. 1,000,000 new book titles were published in the U.S. in ʼ10
  15. 15. 11,000 new business books appear every year
  16. 16. 12% decline of sales in majorbookstore chains (ʻ07-ʼ09)
  17. 17. ?so what did we do?
  18. 18. we changed the product...
  19. 19. ? would a big publishinghouse have taken us on with this book?
  20. 20. No!
  21. 21. we changed the business model...
  22. 22. “ you canʼt write about business model innovation without an innovative business model ”
  23. 23. $24.-
  24. 24. $36.-
  25. 25. $54.-
  26. 26. $81.-
  27. 27. $250.-
  28. 28. Results
  29. 29. # in the top 10 of softcover business books in the US
  30. 30. # 170ʼ000+ English #bmgen copies in print (June 2011)
  31. 31. # 18 #bmgen translations upcoming in 2011
  32. 32. more importantly...
  33. 33. business modelsenable (new) products and technologies and help solve (entirely new) customer problems
  34. 34. the 100Million dollar question
  35. 35. how do you search for the right business model?
  36. 36. 1 understanding business models2 prototyping alternatives of “what could be”3 evaluating your business model design4 testing business models with customer development
  37. 37. but hey,1 what is a business model anyways?
  38. 38. ?whatʼs abusiness model?
  39. 39. ? ?
  40. 40. BusinessModel Canvas
  41. 41. to describe, challenge,design, and inventbusiness models moresystematically
  42. 42. 9 building blocks
  43. 43. CUSTOMER SEGMENTS images by JAM
  44. 44. VALUE PROPOSITIONS images by JAM
  45. 45. CHANNELS images by JAM
  46. 46. CUSTOMER RELATIONSHIPS images by JAM
  47. 47. REVENUE STREAMS images by JAM
  48. 48. KEY RESOURCES images by JAM
  49. 49. KEY ACTIVITIES images by JAM
  50. 50. KEY PARTNERS images by JAM
  51. 51. COST STRUCTURE images by JAM
  52. 52. key value customer activities proposition relationships key customerpartners segments cost revenuestructure key streams resources channels images by JAM
  53. 53. The Business Model Canvas key activities value proposition customer relationships KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS building building key block block customerpartners segments building building building block building block block block KEY CHANNELS RESOURCES building block building block building block cost COST STRUCTURE REVENUE STREAMS revenue buildistructure building key ng building streams block resources block channelsck blo images by JAM
  54. 54. BusinessModelGeneration.com/canvas
  55. 55. illustration
  56. 56. how much less or more do the Swiss pay per gram of coffee consumed at homecompared to a decade ago?
  57. 57. 600% to800%more
  58. 58. Nespresso changed thebusiness model for espresso
  59. 59. RESULTS
  60. 60. own recyclingcontainers
  61. 61. one of the fastest-growing businesses in the Nestlé group
  62. 62. average growth of30% p.a. since 2000
  63. 63. global sales of3.8+ billion USD
  64. 64. Nespresso’s business Model KEY KEY Value CUSTOMER CUSTOMER PARTNERS ACTIVITIES Proposition RELATIONSHIPS SEGMENTS B2C marketing tion distribu Nespre sso households Club (espresso fans) *** Nespresso ine pod productioncoffee mach machines rs manufacture businesses KEY etail CHANNELS **** r RESOURCES Nespresso ts coffee outle mail pods growers distribu order tion e coffe channel s m Nespresso.co pod produ call ts paten ctio n center Nespresso facilities stores COST STRUCTURE REVENUE STREAMS B2C distrib sales of Nespress resso o production ution sales of Nesp marketing machines pods
  65. 65. but Nespresso almost failed in1987 due to a nonperforming business model
  66. 66. Nespresso’s 1987 Model KEY KEY Value CUSTOMER CUSTOMER PARTNERS ACTIVITIES Proposition RELATIONSHIPS SEGMENTS machine offices Nespressomanufacturer KEY system CHANNELS RESOURCES joint venture with machine manufacturer COST STRUCTURE REVENUE STREAMS
  67. 67. now Nestlé is building aportfolio of business models in their coffee business
  68. 68. BusinessModelGeneration.com/canvas
  69. 69. prototype2 alternatives and ask yourself what could be
  70. 70. ? letʼs take some time towork on a really, really big issue in the world?
  71. 71. access to propersanitation
  72. 72. 2.6 billionpeople lack access
  73. 73. 4 out of 10 people in the world lackeven the most simple latrine to perform their needs
  74. 74. * single-use toilet bag* self-sanitizing* biodegradable* turns into fertilizer* (mainly) targeted at poor people* low production cost* people already pay for sanitation
  75. 75. The Business Model Canvas KEY KEY OFFER CUSTOMER CUSTOMERPARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS KEY CHANNELS RESOURCES COST STRUCTURE REVENUE STREAMS
  76. 76. minibrainstormingsession
  77. 77. come up with as many businessmodel ideas as possible for thePeepoo bag (not full Canvases)
  78. 78. * single-use toilet bag* self-sanitizing* biodegradable* turns into fertilizer* (mainly) targeted at poor people* low production cost* people already pay for sanitation
  79. 79. make rough prototypes of thedifferent alternativesto analyze, evaluate and compare them
  80. 80. F rankGe hry [source: Sony Pictures]
  81. 81. [source: Sony Pictures]
  82. 82. [source: Sony Pictures]
  83. 83. [source: Wikimedia Commons]
  84. 84. ?what does that have to dowith business models and my organization?
  85. 85. no architect wouldbuild something that resembles his first sketch
  86. 86. ?what does thatmean for us?
  87. 87. BusinessModelGeneration.com
  88. 88. business model prototypingnapkin sketch Canvas business case field test
  89. 89. “ prototyping is the conversation you have with your ideas ” Tom Wujec
  90. 90. evaluate3 your business model design
  91. 91. building block building buildin block g blo ckbuilding block building block build ing block building building block block build ing block building buil di block blo ng ck buildin g block
  92. 92. SWITCHING  COSTSHow  easy  or  difficult  is  it  for  customers  to  switch  to  another  company?
  93. 93. with   this  amazing  device  you  can  have  thousand   songs  in  a  pocket
  94. 94. ...and   you’r  screwing  us   because  it  has  just  become  more  difficult  to   switch  devices
  95. 95. RECURRING  REVENUESIs  every  sales  a  new  effort  or  will  it  result  in  follow-­‐up  revenues  and  purchases?  How  evenly  distributed  are  your  revenues  through  the  year?
  96. 96. EARN  BEFORE  YOU  PAYAre  you  earning  money  before  you  are  spending  it?
  97. 97. GAME  CHANGING  COST  STRUCTUREIs  your  cost  structure  substanSally  different  and  beTer  than  those  of  compeStors?
  98. 98. phone  calls  will  be  totally   free  in  the  future
  99. 99. GETTING  OTHERS  TO  DO  THE  WORKHow  much  does  your  business  model  get  customers  or  third  parSes  to  create  value  for  you?
  100. 100. go  ahead  and  share  on  your  facebook   page...
  101. 101. ...that   will  make  my  plaWorm  more   valuable...
  102. 102. ...and  raise  my  plaWorm’s   value(aSon)...
  103. 103. SCALABILITYHow  rapidly  and  how  easily  can  you  grow  your  business  model  without  hi[ng  roadblocks  (e.g.  infrastructure,  customer  support,  etc.)?
  104. 104. VIRALITY/NETWORK  EFFECTHow  viral  is  your  business  model?  How  substanSal  are  the  benefits  to  share  with  others?
  105. 105. PROTECTION  FROM  COMPETITIONHow  much  is  your  business  model  protecSng  you  from  compeSSon?
  106. 106. a product/technology focus is just not enough anymore
  107. 107. break-outsession
  108. 108. BusinessModelGeneration.com/canvas
  109. 109. The Business Model Canvas KEY KEY OFFER CUSTOMER CUSTOMERPARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS KEY CHANNELS RESOURCES COST STRUCTURE REVENUE STREAMS
  110. 110. testing4 business models with customer development
  111. 111. a business model might lookgreat on paper... building block building buildin block g blo ck building block building block build ing block building building block block build block ing .. but after all it is only a... building buil di block blo ng ck buildin g block
  112. 112. ... a set of hypotheses guess guess guess guess guessguess guess guess guess guess g uess guess
  113. 113. StevenBlank.com/books.html
  114. 114. THANK YOU! BusinessModelGeneration.com AlexOsterwalder.com / @business_design BusinessModelAlchemist.com
  115. 115. BusinessModelGeneration.com/toolbox iPad stencil, actual scale, template by hortis, le studio. Feb. 2010. http://hortis.lestudio.chdate: project: screen:author:
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