Business Models and Value Generation
Patterns of Value from User-Generated Content & Networks
Darius Dunlap
Managing Partn...
Tweet This!
Darius Dunlap
360c.co
@dariusdunlap
Copyright Darius Dunlap, cc-by
Sunday, October 6, 13
A startup is a temporary
organization in search of a
scalable, repeatable,
profitable business model...
Steve Blank
The Sta...
Introducing
The Business Model Canvas
Copyright Darius Dunlap, cc-by
Sunday, October 6, 13
Alexander Osterwalder
alexosterwalder.com
businessmodelgeneration.com
Copyright Darius Dunlap, cc-by
Sunday, October 6, 13
Alexander Osterwalder
alexosterwalder.com
businessmodelgeneration.com
Business Model Innovation is about Creating Value
Co...
What are the most important costs inherent in our business model?
Which Key Resources are most expensive?
Which Key Activi...
“At the outset, the startup
business model is a canvas
covered with ideas and guesses,
but it has no customers and
minimal...
“With respect to the definition of business
purpose and business mission, there is
only one such focus, one starting point....
Iterate until you Validate — Then Build.
Customer
Discovery
Customer
Validation
Customer
Creation
Company
Building
Pivot!
...
What are the most important costs inherent in our business model?
Which Key Resources are most expensive?
Which Key Activi...
Stay focused...
Copyright Darius Dunlap, cc-by
“A business model describes
the rationale of how an organization
Creates, D...
Product Value
• I have a product
• You Want the Product
• We Make A Deal
• Everyone is Happy
Copyright Darius Dunlap, cc-b...
The world is made of Circles
And we think in straight lines
Peter M. Senge
The Fifth Discipline:
The Art & Practice of the...
Think Different Types of Value Generation
Copyright Darius Dunlap, cc-by
Sunday, October 6, 13
Look at your customer and y...
Users Create Value
For Themselves
• Stuff They Create
• Stuff They Curate
Copyright Darius Dunlap, cc-by
Sunday, October 6, ...
Value Users Generate
For Each Other
• Stuff They Share
• Ideas & Discussion
• Remixing & Reuse
Copyright Darius Dunlap, cc-...
Value Multipliers
• Data Analysis Generates
New Value
• Curation & Discovery
Copyright Darius Dunlap, cc-by
Sunday, Octobe...
Utility Value
• Some Specific Useful Function
• “Sent a Fax”
Copyright Darius Dunlap, cc-by
Sunday, October 6, 13
Customers...
Transactional Value
• Enabled the User to complete a
transaction
Copyright Darius Dunlap, cc-by
Sunday, October 6, 13
Payp...
Records Value
• User generated information
kept as a record
• Information ABOUT user’s
creations or activity, kept as a
re...
Accumulated Value
• Gathered information
accumulates and soon has its
own value as a collection
• Especially true when ena...
Network Value
• User building and defining a
network
• Facebook Friends
• LinkedIn Colleagues
• Google+ Circles
Copyright D...
Efficiency Value
• Tools and resources as part of a
workflow
Copyright Darius Dunlap, cc-by
Sunday, October 6, 13
Efficiency...
Algorithmic Value
• My Data
• Our Data
• Everybody’s Data
Copyright Darius Dunlap, cc-by
Sunday, October 6, 13
Data Graph ...
Interaction Value
• Algorithmic Prediction
• Surfacing Trends
• Activity Spikes
• Connection Flight
• Dynamics Graph
• The...
Collective Value
• Content Swarms
• Content Connections
Copyright Darius Dunlap, cc-by
Sunday, October 6, 13
Flow of conte...
"What the customer buys and considers
value is never a product.
It is always utility, that is, what a product
or a service...
Think, Adapt, Innovate...
Black To Move...
Honinbo Shusaku vs. Inoue Genan Inseki
(1846)
Copyright Darius Dunlap, cc-by
Su...
What Value are you
Creating?
What are you making Possible?
Copyright Darius Dunlap, cc-by
Sunday, October 6, 13
Think big ...
What Value are you
Creating?
Who are you Disrupting?
Copyright Darius Dunlap, cc-by
Sunday, October 6, 13
Amazon was think...
What Value Are You
Creating?
What’s your legacy?
Copyright Darius Dunlap, cc-by
Sunday, October 6, 13
That little thing yo...
Thank You!
Copyright Darius Dunlap, cc-by
Darius Dunlap
Managing Partner
360c.co
@dariusdunlap
darius@360c.co
Sunday, Octo...
Customer Development
Basics
More slides on Customer Development
and Lean Startup
Sunday, October 6, 13
Iterate until you Validate
Customer
Discovery
Customer
Validation
Customer
Creation
Company
Building
Pivot!
Copyright Dari...
Getting out of the building means
acquiring a deep understanding
of customer needs and combining
that knowledge with incre...
BMG
Basics
More slides on Business Model Generation
Sunday, October 6, 13
Business Model Canvas can be Changed!
Some people change the model around
Copyright Darius Dunlap, cc-by
Sunday, October 6...
Does the relationship go the other way?
Copyright Darius Dunlap, cc-by
Sunday, October 6, 13
Some people change the model around
Copyright Darius Dunlap, cc-by
Customer Development Canvas (@TriKro)
Sunday, October 6...
But stay focused...
Copyright Darius Dunlap, cc-by
A business model describes
the rationale of how an organization
Creates...
Homework: Sketch at least 3 different Models!
Only make a first choice after prototyping and sketching
through several alte...
Homework: For each variant Model...
Identify critical hypotheses...
What, if not true, will kill the business model?
Copyr...
Remember...
Execution is not search
Execution FOLLOWS Search
Copyright Darius Dunlap, cc-by
Sunday, October 6, 13
Thank You!
Copyright Darius Dunlap, cc-by
Darius Dunlap
Managing Director
@dariusdunlap
darius@dunlaps.net
Sunday, October...
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Bus modelsandvaluegeneration

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Expanding beyond transactional value Using Business Model Canvas and Customer Development. Building a case for the generation of value through user activity, sharing, and algorithmic improvements.

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Bus modelsandvaluegeneration

  1. 1. Business Models and Value Generation Patterns of Value from User-Generated Content & Networks Darius Dunlap Managing Partner 360c Copyright Darius Dunlap, cc-by Sunday, October 6, 13 All Slides CC-BY Darius Dunlap. For detail, see CreativeCommons.org
  2. 2. Tweet This! Darius Dunlap 360c.co @dariusdunlap Copyright Darius Dunlap, cc-by Sunday, October 6, 13
  3. 3. A startup is a temporary organization in search of a scalable, repeatable, profitable business model... Steve Blank The Startup Owner’s Manual: A step-by-step guide for building a great company Copyright Darius Dunlap, cc-by Sunday, October 6, 13
  4. 4. Introducing The Business Model Canvas Copyright Darius Dunlap, cc-by Sunday, October 6, 13
  5. 5. Alexander Osterwalder alexosterwalder.com businessmodelgeneration.com Copyright Darius Dunlap, cc-by Sunday, October 6, 13
  6. 6. Alexander Osterwalder alexosterwalder.com businessmodelgeneration.com Business Model Innovation is about Creating Value Copyright Darius Dunlap, cc-by Sunday, October 6, 13
  7. 7. What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive? Through which Channels do our Customer Segments want to be reached? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? For what value are our customers really willing to pay? For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? For whom are we creating value? Who are our most important customers? What type of relationship does each of our Customer Segments expect us to establish and maintain with them? Which ones have we established? How are they integrated with the rest of our business model? How costly are they? What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment? Which customer needs are we satisfying? What Key Activities do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue streams? Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquiring from partners? Which Key Activities do partners perform? What Key Resources do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue Streams? Day Month Year No. This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. Copyright Darius Dunlap, cc-by Sunday, October 6, 13 Fine Print. We print it BIG!
  8. 8. “At the outset, the startup business model is a canvas covered with ideas and guesses, but it has no customers and minimal customer knowledge.” Steve Blank The Startup Owner’s Manual: A step-by-step guide for building a great company Copyright Darius Dunlap, cc-by Sunday, October 6, 13 You don’t know. You are Probably Wrong. The Customer is the Key [next - Not a new idea...]
  9. 9. “With respect to the definition of business purpose and business mission, there is only one such focus, one starting point. It is the customer.” Peter F. Drucker Copyright Darius Dunlap, cc-by Sunday, October 6, 13 This is not a new idea. But now represents new possibilities...
  10. 10. Iterate until you Validate — Then Build. Customer Discovery Customer Validation Customer Creation Company Building Pivot! Copyright Darius Dunlap, cc-by Customer Development Business Model Canvas Sunday, October 6, 13 But you can’t just make it up. Business Model Canvas — think through the implications
  11. 11. What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive? Through which Channels do our Customer Segments want to be reached? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? For what value are our customers really willing to pay? For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? For whom are we creating value? Who are our most important customers? What type of relationship does each of our Customer Segments expect us to establish and maintain with them? Which ones have we established? How are they integrated with the rest of our business model? How costly are they? What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment? Which customer needs are we satisfying? What Key Activities do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue streams? Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquiring from partners? Which Key Activities do partners perform? What Key Resources do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue Streams? Day Month Year No. This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. Copyright Darius Dunlap, cc-by Sunday, October 6, 13 Create and re-create your canvas. Keep thinking about it. Keep iterating
  12. 12. Stay focused... Copyright Darius Dunlap, cc-by “A business model describes the rationale of how an organization Creates, Delivers, and Captures Value” Darius Dunlap Sunday, October 6, 13 So let’s talk about Creation of Value
  13. 13. Product Value • I have a product • You Want the Product • We Make A Deal • Everyone is Happy Copyright Darius Dunlap, cc-by Sunday, October 6, 13 Utility Fashion Entertainment
  14. 14. The world is made of Circles And we think in straight lines Peter M. Senge The Fifth Discipline: The Art & Practice of the Learning Organization Copyright Darius Dunlap, cc-by Sunday, October 6, 13 The Linear Transaction is only the beginning of the story
  15. 15. Think Different Types of Value Generation Copyright Darius Dunlap, cc-by Sunday, October 6, 13 Look at your customer and your product from different perspectives. (etching by M.C. Escher, in case you didn’t know.)
  16. 16. Users Create Value For Themselves • Stuff They Create • Stuff They Curate Copyright Darius Dunlap, cc-by Sunday, October 6, 13 [The Trautwine engineering manual is from my Great-Grandfather, and represents an old- technology product that helps its owner create new value. ]
  17. 17. Value Users Generate For Each Other • Stuff They Share • Ideas & Discussion • Remixing & Reuse Copyright Darius Dunlap, cc-by Sunday, October 6, 13 Sharing... Connecting... Generating New from the Old.
  18. 18. Value Multipliers • Data Analysis Generates New Value • Curation & Discovery Copyright Darius Dunlap, cc-by Sunday, October 6, 13 It’s valuable to me that Amazon knows to le me know that Dave Eggers has a new book!
  19. 19. Utility Value • Some Specific Useful Function • “Sent a Fax” Copyright Darius Dunlap, cc-by Sunday, October 6, 13 Customers want what it does, ongoing.
  20. 20. Transactional Value • Enabled the User to complete a transaction Copyright Darius Dunlap, cc-by Sunday, October 6, 13 Paypal is another example. Now, Square.
  21. 21. Records Value • User generated information kept as a record • Information ABOUT user’s creations or activity, kept as a record Copyright Darius Dunlap, cc-by Sunday, October 6, 13 “Meta-Data” Data about Data.
  22. 22. Accumulated Value • Gathered information accumulates and soon has its own value as a collection • Especially true when enabled by powerful utilities for search and context. Copyright Darius Dunlap, cc-by Sunday, October 6, 13 When my pile of stuff reaches some critical mass, Now worth more than the direct utility value of saving a note or clipping.
  23. 23. Network Value • User building and defining a network • Facebook Friends • LinkedIn Colleagues • Google+ Circles Copyright Darius Dunlap, cc-by Sunday, October 6, 13 Ref. Mike Elgin’s discussion of Facebook’s “Monopoly on Everybody”
  24. 24. Efficiency Value • Tools and resources as part of a workflow Copyright Darius Dunlap, cc-by Sunday, October 6, 13 Efficiency comes from working as part of a bigger workflow. [Screen snap from Editorial, an iPad text editor with workflow tools, and a python interpreter.]
  25. 25. Algorithmic Value • My Data • Our Data • Everybody’s Data Copyright Darius Dunlap, cc-by Sunday, October 6, 13 Data Graph by Asymco - www.asymco.com (Doesn’t really have anything to do with the point of the slide, but Horace is brilliant.)
  26. 26. Interaction Value • Algorithmic Prediction • Surfacing Trends • Activity Spikes • Connection Flight • Dynamics Graph • The Changing Graph of Information Flows Copyright Darius Dunlap, cc-by Sunday, October 6, 13 Interaction between people and among groups creates it’s own data flow and value potential
  27. 27. Collective Value • Content Swarms • Content Connections Copyright Darius Dunlap, cc-by Sunday, October 6, 13 Flow of content and the data about that flow...
  28. 28. "What the customer buys and considers value is never a product. It is always utility, that is, what a product or a service does for the customer.” Peter F. Drucker Copyright Darius Dunlap, cc-by Sunday, October 6, 13 If you haven’t, just read all the Drucker you can find.
  29. 29. Think, Adapt, Innovate... Black To Move... Honinbo Shusaku vs. Inoue Genan Inseki (1846) Copyright Darius Dunlap, cc-by Sunday, October 6, 13 You can’t anticipate every customer need, or every competitor’s move... Black is about to make a surprising and highly effective move that white did not anticipate. Known as “the ear-reddenning move”, as Inseki’s ears flushed red when Shusaku placed his next stone.
  30. 30. What Value are you Creating? What are you making Possible? Copyright Darius Dunlap, cc-by Sunday, October 6, 13 Think big about what is possible.
  31. 31. What Value are you Creating? Who are you Disrupting? Copyright Darius Dunlap, cc-by Sunday, October 6, 13 Amazon was thinking bigger than just “sell books at a discount. Extra credit: Find and read Jeff Bezos’ letter to investors, from each Amazon Annual Report. Great example of clear thinking and excellent business writing.
  32. 32. What Value Are You Creating? What’s your legacy? Copyright Darius Dunlap, cc-by Sunday, October 6, 13 That little thing you’re making... ? Does anyone really care? [photo: Palo Alto Apple Store, shortly after Steve Jobs’ passing. cc-by Darius Darius]
  33. 33. Thank You! Copyright Darius Dunlap, cc-by Darius Dunlap Managing Partner 360c.co @dariusdunlap darius@360c.co Sunday, October 6, 13 All Slides CC-BY Darius Dunlap. For detail, see CreativeCommons.org
  34. 34. Customer Development Basics More slides on Customer Development and Lean Startup Sunday, October 6, 13
  35. 35. Iterate until you Validate Customer Discovery Customer Validation Customer Creation Company Building Pivot! Copyright Darius Dunlap, cc-by Customer Development Business Model Canvas Sunday, October 6, 13
  36. 36. Getting out of the building means acquiring a deep understanding of customer needs and combining that knowledge with incremental and iterative product development Steve Blank The Startup Owner’s Manual: A step-by-step guide for building a great company Copyright Darius Dunlap, cc-by Sunday, October 6, 13
  37. 37. BMG Basics More slides on Business Model Generation Sunday, October 6, 13
  38. 38. Business Model Canvas can be Changed! Some people change the model around Copyright Darius Dunlap, cc-by Sunday, October 6, 13
  39. 39. Does the relationship go the other way? Copyright Darius Dunlap, cc-by Sunday, October 6, 13
  40. 40. Some people change the model around Copyright Darius Dunlap, cc-by Customer Development Canvas (@TriKro) Sunday, October 6, 13
  41. 41. But stay focused... Copyright Darius Dunlap, cc-by A business model describes the rationale of how an organization Creates, Delivers, and Captures Value Sunday, October 6, 13
  42. 42. Homework: Sketch at least 3 different Models! Only make a first choice after prototyping and sketching through several alternative models Copyright Darius Dunlap, cc-by Sunday, October 6, 13
  43. 43. Homework: For each variant Model... Identify critical hypotheses... What, if not true, will kill the business model? Copyright Darius Dunlap, cc-by Sunday, October 6, 13
  44. 44. Remember... Execution is not search Execution FOLLOWS Search Copyright Darius Dunlap, cc-by Sunday, October 6, 13
  45. 45. Thank You! Copyright Darius Dunlap, cc-by Darius Dunlap Managing Director @dariusdunlap darius@dunlaps.net Sunday, October 6, 13
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