Lean Launch Ventures Presentation on the Business Model Canvas

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The following is a high-level presentation I gave to the inaugural portfolio class of the Lean Launch Ventures accelerator program. It introduces the audience to the Business Model Canvas, and what the intersection of Lean Startup and the Business Model Canvas looks like.

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  • We’re here to be entrepreneurs! … but at a higher level, we’re here to innovate! Innovation is always this amorphous blog of ambiguity… so let’s put some edges around it.
  • We are here to develop organizations that create, deliver, and capture value. At this stage. we call these organizations startups. According to Steve Blank, a startup is an organization in search of a repeatable, scalable business model. Our respective startups are the embodiment of our effort to make an impact on this world. http://blogs.hbr.org/anthony/2012/05/four_innovation_misconceptions.html
  • Innovating is hard, but we can do something about it.
  • … these are some of the people working incredibly hard. We’re only going to zoom in on the BMC and Lean Startup/CustDev
  • *show video!!!* http://youtu.be/QoAOzMTLP5s
  • Lean Canvas is more focused on startups – BMC controls for corporate innovationhttp://canvanizer.com/how-to-use/business-model-canvas-vs-lean-canvas
  • We live with uncertainty, and everything is initially a set of hypotheses
  • We need to test our most critical hypotheses first, and they almost always deal with market risk (CS and VP). Once that has been validated, worry about the other stuff.http://steveblank.com/2010/10/25/entrepreneurship-as-a-science-%E2%80%93-the-business-modelcustomer-development-stack/
  • http://steveblank.com/2010/10/25/entrepreneurship-as-a-science-%E2%80%93-the-business-modelcustomer-development-stack/
  • Customer Segment (what job is the customer trying to get done?) > Value Proposition (How we do the job better)> Revenue Stream (pricing strategy - validation of paying customers) > Key Resources > Key Activities > Cost Structure > Channels (how can I best reach my customer, and deliver my value proposition?) > Relationships > Partners (who do I need help from?)
  • Start with customer jobs, look at the pain associated with doing the job, highlight the gain associated with completing the job, and then talk about how you can get that job done for the customer.The Velue Proposition is the overall offer, so it can be products, services, features. Pain Releiver and Gain Creators are the benefits,http://millennialambitions.com/category/emergent-processes-tools/job-to-be-done/
  • Zip Car example
  • Superior biz models win: Zappos’ Customer Relationship strategy
  • Zip Car exampleCustomer: People that need to get from one place to another – Enterprises that need to transport a workforce (this is where we would segment, and later start to stack the business model)Pain: Too far to bike/walk to, Renting a car is inconvenient and expensive – plus, it polarizes younger drivers. Gain: Getting to where they need to goValue Proposition: A convenient and affordable way to get from one place to the next for both consumers and enterprise customersRevenue: Fixed, monthly member revenue. Marginal revenue based on usage.Key Resources: A fleet of cars, gas, storage facilities for the fleet, insurance, and staffKey Activities: Servicing the fleet of cars, vetting prospective members customer service, refueling the fleet, activities supporting distribution strategies, Cost Structure: purchasing the fleet of automobiles, energy, servicing automobiles, compensating garages for storage, personnel costs, distribution costs, insuranceChannel: Traditional, paid advertising (i.e. never miss out on a booty call again), In-bound and out-bound enterprise sales, and collegiate marketingCustomer Relationship: Self-service and some personal assistance at the points of pick-up/drop-offKey Partners: automobile companies, parking garages, energy providers, colleges (distribution partner), agencies (paid distribution)
  • Lean Launch Ventures Presentation on the Business Model Canvas

    1. 1. Overview• Why are we here?• What is going on?• Intro to the BMC and similar frameworks• Leveraging the BMC: How To• Final Takeaways and Next Steps
    2. 2. Who is this guy?
    3. 3. What have I learned?
    4. 4. What are we doing here?
    5. 5. What the hell is innovation?“Something different that has impact” -Scott D. Anthony Managing Partner, Innosight• Innovation equals results, not creativity • It’s an action-oriented process• It’s not all about “big bangs” • It’s not about the size of the vision, it’s about impact• Designing sustainable business models results in impact
    6. 6. … the good newsImpact is relative, and it is measured by your own valuesand your vision for the way the world should beWe are positioned to increase our probability of creatingenduring value for this world as entrepreneurs.The pace at which we can accelerate our understandingof how to innovate effectively has never been so greatPeople are working incredibly hard to help YOU win!
    7. 7. “Standing on the shoulders of giants”• Steve blank & Bob Dorf – Customer Development• Nir Eyal – The Desire Engine• Eric Ries – Lean Startup• Mark Johnson – Seizing the White Space• Alexander Osterwalder – The BMC• Clayton Christensen – Disruptive Innovation• Ash Maurya – Running Lean & The Lean Canvas• BJ Fogg – Behavioral Modeling
    8. 8. What is the Business Model Canvas?“A strategic management template for developingnew or documenting existing business models”Created by Alexander Osterwalder and Yves Pigneur Created by 470 practitioners Adopted by 500k+ innovators Adapted by many Business plans are dead
    9. 9. Why use the BMC?Understanding the fabric of your startups isparamount to increasing your odds of successInvestors probably won’t care, and it doesn’t matterUsing the BMC allows you and your team to create acommon, visual nomenclature around your startupDocumenting your progress with the BMC allowsyour team to better understand the effect of change
    10. 10. There’s a competitive fray• The development of intellectual capital leads to branding which ultimately leads to confusion• Everyone is standing on giant shoulders – We live in a culture of 1-uping each other• Learn about everything out there, and decide for yourself what best fits your needs
    11. 11. The Lean Canvas
    12. 12. The Reality
    13. 13. BMC + Lean Startup
    14. 14. Business Models evolve w/ new insights
    15. 15. Populating the BMCPopulating the BMC is a collaborative and creative processThoughts should be concise and singular in focusBest done with sharpies and post-it-notes (contributors should usedifferent colors)Time-box the exerciseYou can stack business models (i.e. marketplaces & biz units)We want to stand at intersections, so sequencing matters!
    16. 16. Why does sequencing matter?Market risk is almost always themost critical risk startups face Eliminating Market Risk creates REAL business value
    17. 17. Sequencing• What job(s) does the CS need done?• How can we do that job for them?• What are they willing to pay to get it done?• What do we need to do in order to get the job done?• How much does it cost to deliver the value?• How do I reach customers and deliver value?• What type of relationship do we want to develop?• In order to deliver value, who do I need help from?
    18. 18. What’s the JTBD?
    19. 19. Customers and Value
    20. 20. Product-Market Fit
    21. 21. Can you actually get it done?
    22. 22. Distribution and Relationships
    23. 23. Whose help do I need?
    24. 24. Review your model and update!• Things change as elements are added• We need to account for these changes• What does the profit formula look like?
    25. 25. Final TakeawaysYOU are very fortunate to live in an era where an unparalleled amount ofinnovation IC existsThe BMC increases your odds of making an impactSuperior business models and strategies win over superior productsUse the BMC to help frame your respective strategiesIdentify the most critical dimensions to our model, and de-risk -Market risk is always be a “deal-killer risk”Theory is validated by practitioners, so practice, practice, practice!
    26. 26. Let’s Practice
    27. 27. ResourcesStanford’s ecorner and podcastsStrategyzer.comLeanCanvas.comBusinessModelAlchemist.comSteveBlank.comAshMaurya.comGrasshopperHerder.comInnosight’s NewsletterStartupLessonsLearned.comNirandFar.comBJFogg.com

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