Business Model

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Business Model

  1. 1. how to systematically build!BUSINESS MODELS BEYOND PROFIT Alex Osterwalder, PhD! www.businessmodelgeneration.com Twitter: business_design
  2. 2. this was a three hour lecture given at Jacobs University, Bremen, in the context of impACT3 - a pan-European student competition for social entrepreneurship www.act-for-impact.netsponsored by
  3. 3. the world used to be divided into …
  4. 4. giving…
  5. 5. …and taking
  6. 6. “ Iʼve found that investors typically have two pockets,one for donations and one for ” maximizing profits Matt Scott, co-founder COSMOS Ignite
  7. 7. social impact− + potential old school not-for-profit
  8. 8. profit potential + social impact− + potential old school not-for-profit −
  9. 9. profit potential + old school corporation social impact− + potential old school not-for-profit −
  10. 10. profit potential + old school corporation x social impact− + potential old school not-for-profit −
  11. 11. “ Business must be for profit but profit must also be for purpose ” Mads Kjaer co-founder MYC4
  12. 12. profit potential + new school of old school conscientious corporations entrepreneurs social impact− + potential old school not- for-profits −
  13. 13. interesting?
  14. 14. interesting?YES?
  15. 15. so
  16. 16. we need new tools to come-up withbusiness models beyond profit
  17. 17. my mission today is to help you…
  18. 18. … systematicallylook at business models
  19. 19. … and learn how todevelop business models
  20. 20. what do business models have to do with social & environmental impact?
  21. 21. it’s key if you want tocome up with innovativeways to “do good” AND “do well”
  22. 22. outline
  23. 23. outlineapproach
  24. 24. outlineapproach patterns
  25. 25. outlineapproach patterns attitude
  26. 26. outlineapproach patterns attitude process
  27. 27. A approach
  28. 28. does…
  29. 29. … have a business model?
  30. 30. … have a business model?
  31. 31. … have a business model?
  32. 32. … have a business model?
  33. 33. … have a business model?
  34. 34. … have a business model?
  35. 35. buzz
group

  36. 36. discuss with your neighborwhat a business model is and write down your definition
  37. 37. which elements did youmention when you defined abusiness model? ?
  38. 38. “ there is a lack of definition ”
  39. 39. “ few companies understand their existing business model well enough ”
  40. 40. so we came up with a way to masterbusiness models through…
  41. 41. theBUSINESS MODEL CANVAS
  42. 42. Def_Business Modela business model describesthe rationale of how anorganization creates, delivers,and captures value
  43. 43. 9BUILDINGBLOCKS
  44. 44. the 9 building blocks of a business model images by JAM
  45. 45. CUSTOMER SEGMENTS images by JAM
  46. 46. VALUE PROPOSITIONS images by JAM
  47. 47. CHANNELS images by JAM
  48. 48. CUSTOMER RELATIONSHIOPS images by JAM
  49. 49. REVENUE STREAMS images by JAM
  50. 50. KEY RESOURCES images by JAM
  51. 51. KEY ACTIVITIES images by JAM
  52. 52. KEY PARTNERS images by JAM
  53. 53. COST STRUCTURE images by JAM
  54. 54. key value customer activities proposition relationships key customerpartners segments cost revenuestructure key distribution streams resources channels images by JAM
  55. 55. key value customer activities proposition relationships key customerpartners segments cost revenuestructure key distribution streams resources channels images by JAM
  56. 56. images by JAM
  57. 57. OVERLAYPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS KEY DISTRIBUTION RESOURCES CHANNELS COST STRUCTURE REVENUE STREAMS images by JAM
  58. 58. OVERLAYPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS KEY DISTRIBUTION RESOURCES CHANNELS COST STRUCTURE REVENUE STREAMS images by JAM
  59. 59. THE BUSINESS MODEL CANVASPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS KEY DISTRIBUTION RESOURCES CHANNELS COST STRUCTURE REVENUE STREAMS
  60. 60. THE BUSINESS MODEL CANVASPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS building block! building building building block! block! block!building block! KEY DISTRIBUTION RESOURCES CHANNELS building block! building block! building block! COST STRUCTURE REVENUE STREAMS building building building block! block! block!
  61. 61. example

  62. 62. ʻs business modelPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS KEY DISTRIBUTION RESOURCES CHANNELS COST STRUCTURE REVENUE STREAMS
  63. 63. ʻs business modelPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS wealthy lend to poor westerners! ! entrepreneurs KEY DISTRIBUTION RESOURCES CHANNELS Kiva.org! COST STRUCTURE REVENUE STREAMS
  64. 64. ʻs business modelPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS wealthy lend to poor westerners! ! entrepreneurs KEY DISTRIBUTION RESOURCES CHANNELS Kiva.org! loans! poor local entrepreneu rs! microfinance institutions! COST STRUCTURE REVENUE STREAMS
  65. 65. ʻs business modelPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS wealthy lend to poor westerners! ! entrepreneurs KEY DISTRIBUTION RESOURCES CHANNELS Kiva.org! loans! poor local entrepreneu rs! microfinance institutions! COST STRUCTURE REVENUE STREAMS optional donations on top of loan!
  66. 66. ʻs business modelPARTNER KEY OFFER CUSTOMER CUSTOMER ACTIVITIESeningMFNETWORK sc re s! RELATIONSHIPS SEGMENTS risk insti tution management! wealthy managing lend to poor westerners! ! platform! entrepreneurs KEY DISTRIBUTION RESOURCES CHANNELS Kiva.org! loans! Kiva.org poor local entrepreneu Platform ! rs! microfinance institutions! COST STRUCTURE REVENUE STREAMS optional donations on top of loan!
  67. 67. ʻs business model PARTNER KEY OFFER CUSTOMER CUSTOMER ACTIVITIESeningMF NETWORK sc re s! RELATIONSHIPS SEGMENTS risk insti tution management! wealthy managing lend to poor westerners! ! platform! entrepreneurs Paypal! KEY DISTRIBUTION RESOURCES CHANNELS Kiva.org! loans! local Kiva.org poormicrofinance local entrepreneu Platform ! rs!institutions! microfinance institutions! COST STRUCTURE REVENUE STREAMS optional donations on top of loan!
  68. 68. ʻs business model PARTNER KEY OFFER CUSTOMER CUSTOMER ACTIVITIESening MF NETWORK re sc s! RELATIONSHIPS SEGMENTS risk insti tution management! wealthy managing lend to poor westerners! ! platform! entrepreneurs Paypal! KEY DISTRIBUTION RESOURCES CHANNELS Kiva.org! loans! local Kiva.org poormicrofinance local entrepreneu Platform ! rs!institutions! microfinance institutions! COST STRUCTURE REVENUE STREAMS platf optional risk orm screening! donations on !management! top of loan!
  69. 69. the Canvas is a handy tool
  70. 70. break‐out
session

  71. 71. map out the renowned businessmodel of…
  72. 72. ʻs business modelPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS KEY DISTRIBUTION RESOURCES CHANNELS COST STRUCTURE REVENUE STREAMS
  73. 73. a rough sketch of Grameen Bank…
  74. 74. ʻs business modelPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS personal! KEY micro-loans! DISTRIBUTION RESOURCES CHANNELS poor entrepreneurs! branches! COST STRUCTURE REVENUE STREAMS
  75. 75. ʻs business modelPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS personal! KEY micro-loans! DISTRIBUTION RESOURCES CHANNELS poor entrepreneurs! branches! COST STRUCTURE REVENUE STREAMS interest rates!
  76. 76. ʻs business model PARTNER KEY OFFER CUSTOMER CUSTOMER NETWORK ACTIVITIES RELATIONSHIPS SEGMENTS risk management! lending & personal! collecting payments! KEY micro-loans! DISTRIBUTIONgovernment! RESOURCES CHANNELS poor entrepreneurs! branches! brand/ trust! branches! capital! COST STRUCTURE REVENUE STREAMS interest rates!
  77. 77. ʻs business model PARTNER KEY OFFER CUSTOMER CUSTOMER NETWORK ACTIVITIES RELATIONSHIPS SEGMENTS risk management! lending & personal! collecting payments! KEY micro-loans! DISTRIBUTIONgovernment! RESOURCES CHANNELS poor entrepreneurs! branches! brand/ trust! branches! capital! COST STRUCTURE REVENUE STREAMS capital interest costs! rates! people!
  78. 78. B patterns
  79. 79. “ pattern in architecture is theidea of capturing architectural design ideas as archetypical ” and reusable descriptions Christopher Alexandert, Architect
  80. 80. buzz
group

  81. 81. how does a donor-funded business modellook like? ?
  82. 82. 3rd party-funded business modelsPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS proposal proposal! writing! donor! KEY DISTRIBUTION RESOURCES CHANNELS COST STRUCTURE REVENUE STREAMS donations!
  83. 83. 3rd party-funded business modelsPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS proposal proposal! writing! donor! KEY DISTRIBUTION RESOURCES CHANNELS reputation! mission! recipient! COST STRUCTURE REVENUE STREAMS donations!
  84. 84. 3rd party-funded business modelsPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS to ency tend s on focu oney m do nor ( e)! proposal c writing! proposal! sour donor! KEY DISTRIBUTION RESOURCES CHANNELS t no direc ” ck reputation! edba iary! “$fe nefic e mission! fr om b recipient! COST STRUCTURE REVENUE STREAMS donations!
  85. 85. “ The dependence of nonprofits on begging – oops, I meanfundraising – limits the sectorʼs self-respect, independence, ” vision, and impact Michael Shuman, author of “Going Local”
  86. 86. example

  87. 87. Iqbal Quadir dreamhad a
  88. 88. customer-funded business modelPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS mobile connectivity! KEY DISTRIBUTION RESOURCES CHANNELS COST STRUCTURE REVENUE STREAMS
  89. 89. customer-funded business modelPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS network mobile management! connectivity! KEY DISTRIBUTION RESOURCES CHANNELSTelenor! license! network! COST STRUCTURE REVENUE STREAMS network management!
  90. 90. customer-funded business modelPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS network mobile management! connectivity! KEY DISTRIBUTION villagers! RESOURCES CHANNELS videTelenor! license! how do you pro to c onnectivity n they network! vill agers whe y COST STRUCTURE poor to bu are too REVENUE STREAMS a phone?! network management!
  91. 91. customer-funded business modelPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS n by providing a loan inte rmediary a e and to b uy a phon network s! mobile c all serviceGrameen management! connectivity! resell Bank! KEY DISTRIBUTION villagers! RESOURCES CHANNELS phone ladies!Telenor! license! network! COST STRUCTURE REVENUE STREAMS network management!
  92. 92. customer-funded business modelPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS network mobileGrameen management! connectivity! Bank! KEY DISTRIBUTION villagers! RESOURCES CHANNELS phone income ladies! opportunity!Telenor! license! phone ladies! network! Grameen branches! COST STRUCTURE REVENUE STREAMS network management!
  93. 93. customer-funded business modelPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS network mobileGrameen management! connectivity! Bank! KEY DISTRIBUTION villagers! RESOURCES CHANNELS phone income ladies! opportunity!Telenor! license! phone ladies! network! Grameen branches! COST STRUCTURE REVENUE STREAMS communication network revenues! management!
  94. 94. RESULTS
  95. 95. Rashmi, 24Bangladeshivillage phone lady2-3 $ daily income
  96. 96. there are about 250ʼ000women retailing telephoneservices in 60ʼ000 villagesgiving access to about 100million people
  97. 97. the 250ʼ000 telephones areproducing revenues at anannual rate of well over $100million for GrameenPhone
  98. 98. each entrepreneur makesabout $2 in profits per dayor about $700 per year
  99. 99. design from the customer perspectivePARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS KEY DISTRIBUTION RESOURCES CHANNELS COST STRUCTURE REVENUE STREAMS
  100. 100. blended value / triple bottom line social and environmental cost
  101. 101. blended value / triple bottom line social and environmental cost social and environmental benefit
  102. 102. C attitude
  103. 103. “ If you freeze to an idea too quickly, you fall in love with it. If you refine it too quickly, you become attached to it and it becomes very hard to keep exploring, to keep looking for better. ” Jim Glymph, Gehry Partners
  104. 104. business model prototypingnapkin sketch
  105. 105. business model prototypingnapkin sketch Canvas
  106. 106. business model prototypingnapkin sketch Canvas business case
  107. 107. business model prototypingnapkin sketch Canvas business case field test
  108. 108. key is: findingthe appropriatebusiness model
  109. 109. so you need to generate options first!
  110. 110. buzz
group

  111. 111. a silly exercise
  112. 112. the silly cowexercise!
  113. 113. Muuuuhhhh
  114. 114. sketch out3 business models..
  115. 115. …in which I,the cow, playthe main act!
  116. 116. letʼs look at some examples…
  117. 117. cows-for-advertising
  118. 118. rent-a-cow-for-the-weekend
  119. 119. got it?
  120. 120. you got 2 minutes!
  121. 121. you got 2 minutes! GO!
  122. 122. example

  123. 123. ʻs business modelPARTNER KEY OFFER CUSTOMER CUSTOMERNETWORK ACTIVITIES RELATIONSHIPS SEGMENTS KEY DISTRIBUTION RESOURCES CHANNELS COST STRUCTURE REVENUE STREAMS
  124. 124. D process
  125. 125. five phases of business model design mobilize set the stage
  126. 126. five phases of business model design mobilize understand set the stage immersion
  127. 127. five phases of business model design mobilize understand design set the stage immersion inquiry
  128. 128. five phases of business model design mobilize understand design implement set the stage immersion inquiry execution
  129. 129. five phases of business model design mobilize understand design implement manage set the stage immersion inquiry execution evolution
  130. 130. financial spreadsheets environment analysisimplementation roadmap SWOT and uncertainty analysis 141
  131. 131. www.businessmodelgeneration.com
  132. 132. THANK YOU!! www.businessmodelgeneration.com www.alexosterwalder.com (upcoming)www.businessmodelalchemist.com (upcoming new blog) Twitter: business_design
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