Business modeling with the Business Model Canvas

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Following requests, I uploaded the slides I used for my talk at the Munich Startup Accelerator about business modeling and the business model canvas. They are not completely self-speaking, so it will be hard for those who did not participate to grasp the full meaning. Sorry about that and I am working on finalizing the recorded video.

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  • Source:Luther King image - http://larrison.blogspot.de/2011/01/i-have-dream-speech.htmlNotes:„Ok, you have a plan but do you also have a business model?“
  • Source: Axel Springer Media Entrepreneur Kampage - http://www.youtube.com/watch?v=YAbpmkqn6JE
  • Source:http://www.task.fm/start-up-companies
  • Source:„Why business models fail“: http://www.businessmodelalchemist.com/2012/05/why-business-models-fail.htmlShort notes:#1 also known as „build it and they will come“, #2 Flaws (acqui cost vs. LTV potential), #3 trends, industry (e.g. Compet.), market forces, macro economic forces (e.g. Capital support through funding)right problem/job? right model? Right time? Right skills?Startups a temporary organizations in search of a business model ... Rather than writing a plan, plan your search for a successful business modelNotes:#1 reason: solve a problem that nobody cares aboutSamples:segway - great product but does not solve a relevant jobNewton - first PDA but did not solve a real customer jobFloTV by Qualcomm - mobile TV service ... total flop#2 vp and cs ok! but flawed modelmore spent then life time earnings (acqui cost then cltv)Samples:Kodak: started with films, then digital camreasdigital cameras earned much less then traditional films (earned much less)#3 failure due to external threats that kill your bus modelMarket timing (being too early – e.g. Augmented reality)Six Degrees of Kevin Bacon, SixDegrees.com was the first ever online social network in 1997. The idea did not work at that time because the market wasn’t ready for such social networking and ripened to welcome Facebook in 2004.competitor have bus model with same VP at lower cost (customer could move on or will not buy from you ... -> or not environment friendly ... -> or tech might change and undermine your bus model-> stock market crash .. ran out of funding as funding had dried out#4 poor execeven best bus idea with best bus model can fail with execution- have to build infra/factories, aseemble team (e.g. hire wrong people) or PM/leadership skills are insufficient#5 Other issues:Unable to raise sufficient funds.Disputes among investors/co-founders.Lack of strategic planning and poor management.Poor location choices.Pricing issues.Lack of marketing strategy (28% fail according to that) - Dee Power and Brian Hill surveyed venture capitalists and found that 28% believe startups fail because of a lack of marketing strategy.Answer four questions:- right job? relevant to customer?- right model? scalable and repeatable- right time? in right env- right skills?
  • Sources:Business Model Generation 2010, Osterwalder/PigneurNotes:...
  • Sources:Sparkasse – http://www.youtube.com/watch?v=QoAOzMTLP5s&feature=player_embeddedPresentation notes:...
  • Sources:Sparkasse – http://www.youtube.com/watch?v=QoAOzMTLP5s&feature=player_embeddedPresentation notes:...
  • Source:BusinessModelSinc: http://businessmodelsinc.wordpress.com/2009/10/29/nespresso-is-still-a-beautiful-model/Notes:Nespresso is part of Nestlé – worlds largest food company (2008 sales: >$100B)CS: Nespresso for customer segment: high-end (demanding coffee consumer at home in front of the TV or at PC/Mac [Office, Home])VP: Top coffee without leaving your home or officeCH: online, at shopping mall, call center order, etc.
  • Source:BusinessModelSinc: http://businessmodelsinc.wordpress.com/2009/10/29/nespresso-is-still-a-beautiful-model/Notes:Nespresso is part of Nestlé – worlds largest food company (2008 sales: >$100B)CS: Nespresso for customer segment: high-end (demanding coffee consumer at home in front of the TV or at PC/Mac [Office, Home])VP: Top coffee without leaving your home or officeCH: online, at shopping mall, call center order, etc.
  • Source:BusinessModelSinc: http://businessmodelsinc.wordpress.com/2009/10/29/nespresso-is-still-a-beautiful-model/BMG / Osterwalder: Page 236+Notes:Nespresso is part of Nestlé – worlds largest food company (2008 sales: >$100B)CS: Nespresso for customer segment: high-end (demanding coffee consumer)> Households & > Office marketVP: Premium coffee at your day-to-day location (home and office)CH: online (nespresso.com), supermarket / nespresso boutiques, mail order (direct sales per mail), call center, retail (machines only)CR: customer relationship program with nespresso club cardKA: #1 Production (incl. patents), #2 Marketing (incl. CRM program), #3 Logistics (store, send)KR: #1 Brand, #2 Distribution channels #3 Production plants (incl. Logistics) #4 Patents on systemKP/SP: Coffee machine manufacturersR$: #1 MAIN: capsules, #2 OTHER/SMALLER: machines & accessoriesC$: #1 Marketing, #2 Manufacturing, #3 Distribution & ChannelsHightlights:Nn a high level 2 elements of the business model that are remarkable:-> 1. Nespresso uses different channels to distribute to their clients: online, high end retail stores at premium locations, in-store boutiques in high-end department stores, etc.-> 2. Nespresso knows everything about his clients: club approach with total customer immersion and EXCELLENT service
  • Source:BMG / Osterwalder: Page 236+Notes:Three brands tailored to different customer segments with different offering and value propTwo companies / entities: mass-market nescafé and mid-tier dolce gusto through mass-market business model and organizational structure -> synergies ... But dolce gusto also online due to nespresso success; high-end nespresso with own org and different channels
  • Source:BusinessModelSinc: http://businessmodelsinc.wordpress.com/2009/10/29/nespresso-is-still-a-beautiful-model/Notes:Nespresso is part of Nestlé – worlds largest food company (2008 sales: >$100B)CS: Nespresso for customer segment: high-end (demanding coffee consumer)> Households & > Office marketVP: Premium coffee at your day-to-day location (home and office)CH: online (nespresso.com), supermarket / nespresso boutiques, mail order (direct sales per mail), call center, retail (machines only)CR: customer relationship program with nespresso club cardKA: #1 Production (incl. patents), #2 Marketing (incl. CRM program), #3 Logistics (store, send)KR: #1 Brand, #2 Distribution channels #3 Production plants (incl. Logistics) #4 Patents on systemKP/SP: Coffee machine manufacturersR$: #1 MAIN: capsules, #2 OTHER/SMALLER: machines & accessoriesC$: #1 Marketing, #2 Manufacturing, #3 Distribution & ChannelsHightlights:Nn a high level 2 elements of the business model that are remarkable:-> 1. Nespresso uses different channels to distribute to their clients:su-> 2. Nespresso knows everything about his clients: club approach with total customer immersion and EXCELLENT service
  • Source:BusinessModelSinc: http://businessmodelsinc.wordpress.com/2009/10/29/nespresso-is-still-a-beautiful-model/Notes:Nespresso is part of Nestlé – worlds largest food company (2008 sales: >$100B)CS: Nespresso for customer segment: high-end (demanding coffee consumer)> Households & > Office marketVP: Premium coffee at your day-to-day location (home and office)CH: online (nespresso.com), supermarket / nespresso boutiques, mail order (direct sales per mail), call center, retail (machines only)CR: customer relationship program with nespresso club cardKA: #1 Production (incl. patents), #2 Marketing (incl. CRM program), #3 Logistics (store, send)KR: #1 Brand, #2 Distribution channels #3 Production plants (incl. Logistics) #4 Patents on systemKP/SP: Coffee machine manufacturersR$: #1 MAIN: capsules, #2 OTHER/SMALLER: machines & accessoriesC$: #1 Marketing, #2 Manufacturing, #3 Distribution & ChannelsHightlights:Nn a high level 2 elements of the business model that are remarkable:-> 1. Nespresso uses different channels to distribute to their clients:su-> 2. Nespresso knows everything about his clients: club approach with total customer immersion and EXCELLENT service
  • Notes:For new, innovative and disruptive business modelsBait & Hook or Razor Blade model („Köder -> Haken“, cheap „one time“ razor, but expensive recurring blades OR printer & ink)
  • Notes:Bait & Hook or Razor Blade model („Köder -> Haken“, cheap „one time“ razor, but expensive recurring blades OR printer & ink)
  • Source:-Notes:Or in short: #1 design, #2 test, #3 pivot
  • Sources:http://www.gruenderszene.de/news/6wunderkinder-wunderkit-eingestelltNotes:However, Wunderkit had a more existential problem: many of its best bits are or will be found in Wunderlist.“Our idea was to reinvent project management and we’ve basically noticed Wunderlist is a much simpler, much broader product,” Reber said.Key issues with Wunderkit:bugs, scaling challenges and usability issues
  • Business modeling with the Business Model Canvas

    1. 1. IDEASENABLED Business Modeling with the Business Model Canvas Christian Kählig 12/09/09christian.kaehlig@ideasenabled.com | +49 176 96 76 23 64 | http://www.ideasenabled.com
    2. 2. Many entrepreneurs have high expectations … “I have a dream” Martin Luther King Jr.© 2012 Ideas Enabled GmbH Image Source: © Larrison Blogspot, 2011 2
    3. 3. … and a business plan© 2012 Ideas Enabled GmbH Image Source: © Axel Springer Video – Media Entrepreneur 3
    4. 4. Yet too many startups fail … ...© 2012 Ideas Enabled GmbH Image source: Modified, based on Task.fm 4
    5. 5. ... due to issues in the following 4 key areas 1 Solving a problem nobody cares about 2 Flawed business model 3 External threats Startups are 4 Poor execution in search of a business model© 2012 Ideas Enabled GmbH Sources: Own research, Why business models fail - Osterwalder, 2012, 5
    6. 6. A Business Model ... A business model describes the rationale of how an organization creates, delivers and captures value© 2012 Ideas Enabled GmbH Source: Business Model Generation 2010, Osterwalder/Pigneur 6
    7. 7. ... is best described with the Business Model Canvas© 2012 Ideas Enabled GmbH Source: Business Model TV - Osterwalder, 2011 7
    8. 8. Aspects of the Canvas Key Attributes Strategic Tool Coherent view with 9 building blocks Visuals & Text© 2012 Ideas Enabled GmbH Video source: Business Model TV 8
    9. 9. Aspects of the Canvas Structural Metaphor Back Stage Theater Front Stage or Back-End Software Front-End© 2012 Ideas Enabled GmbH Image source: XPLANE 9
    10. 10. Aspects of the Canvas Key Benefits Easy to use and understand Excellent for collaboration Great for getting feedback© 2012 Ideas Enabled GmbH Image source: XPLANE 10
    11. 11. Industry sample: Nespresso© 2012 Ideas Enabled GmbH Image source: XPLANE 11
    12. 12. Industry sample: Nespresso High-end (Nespresso) Mid-tier (Dolce Gusto) Mass-market (Nescafé)© 2012 Ideas Enabled GmbH Image source: XPLANE 12
    13. 13. Typical process Interdisciplinary team works on a poster on the wall Use markers and sticky notes to capture items Start with CS, then VP, then all others(1) CS = Customer Segment; (2) VP = Value Proposition© 2012 Ideas Enabled GmbH Image source: XPLANE 13
    14. 14. Real world sample Clean tech idea 14
    15. 15. Typical challenges and solutions 2+ Segments Avoid using 1 color for different segments. Use different colors and ensure consistency.© 2012 Ideas Enabled GmbH 15
    16. 16. Typical challenges and solutions VC Pitches Don‘t use the canvas in a VC pitch. Use a lightweight version instead.© 2012 Ideas Enabled GmbH 16
    17. 17. Typical challenges and solutions Uncovered areas The business model canvas covers many but not all aspects. Make sure you also consider e.g. the environment, team and feasibility questions.© 2012 Ideas Enabled GmbH 17
    18. 18. Typical challenges and solutions Fast commit 1st Don‘t fall in love with model your initial model too fast. Prototype instead.© 2012 Ideas Enabled GmbH 18
    19. 19. Prototype before you commit© 2012 Ideas Enabled GmbH 19
    20. 20. Prototype before you commit Bait & Hook Premium Freemium Un- bundled Single Single A B sided sided Serviti- zation© 2012 Ideas Enabled GmbH 20
    21. 21. Our recommended overarching approach Baseline Prototype & Assess Execute, Pivot or Stop Choose & Test© 2012 Ideas Enabled GmbH Image source: XPLANE 21
    22. 22. Don’t forget … you still need to execute well!© 2012 Ideas Enabled GmbH Image & info source: http://www.gruenderszene.de/news/6wunderkinder-wunderkit-eingestellt 22
    23. 23. IDEASENABLED f: facebook.com/ideasenabled t: @ideasenabled w: www.ideasenabled.comchristian.kaehlig@ideasenabled.com | +49 176 96 76 23 64 | http://www.ideasenabled.com

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