Introduction to the Business Model Canvas


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Overview of the Business Model Canvas, Value Proposition Canvas, customer empathy map, and additional business model design tools and ideas for lean startup practitioners.












14. This is not a customer segment.



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Introduction to the Business Model Canvas

  1. 1. David Sturtz @sturtz Geonetric / @BlazeContent Introduction to the Business Model Canvas This is a big idea.
  2. 2. According to Eric Ries What is a startup? “A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.”
  3. 3. According to Steve Blank What is a startup? “A startup is a temporary organization designed to search for a repeatable and scalable business model.”
  4. 4. According to What is a business plan? “A business plan is an essential roadmap for business success. This living document generally projects 3-5 years ahead and outlines the route a company intends to take to grow revenues.”
  5. 5. “A business plan… projects 3-5 years ahead and outlines the route a company intends to take to grow revenues.” “A startup is a temporary organization designed to search for a repeatable and scalable business model.” “under conditions of extreme uncertainty” “A startup is not a smaller version of a large company.”
  6. 6. Alexander Osterwalder and Yves Pigneur What is a business model? “A business model describes the rationale of how an organization creates, delivers, and captures value.” “it’s all about the business model”
  7. 7. Business Model Canvas
  8. 8. According to Brant Cooper & Patrick Vlaskovits Your startup ecosystem
  9. 9. The Business Model Canvas
  10. 10. An organization serves one or several Customer Segments 1. Customer Segments Mass market Niche market Segmented Diversified Multi-sided market “many items that eventually go in other boxes begin in customer segment”
  11. 11. It seeks to solve customer problems and satisfy customer needs with value propositions. 2. Value Proposition Newness Performance Customization “Getting the job done” Design Brand/Status Price Cost reduction Risk reduction Accessibility Convenience/Usability
  12. 12. Value propositions are delivered to customers through communication, distribution, and sales Channels 3. Channels DIRECT Own Sales force Own Web sales INDIRECT Own stores Partner stores Wholesaler “A channel is simply a shelf”
  13. 13. Customer relationships are established and maintained with each Customer Segment. 4. Customer Relationships Personal assistance Dedicated personal assistance Self-service Automated services Communities Co-creation
  14. 14. Revenue streams result from value propositions successfully offered to customers. 5. Revenue Streams Asset sale Usage fee Subscription fee Lending/Renting/Leasing Licensing Brokerage fee Advertising
  15. 15. According to Mark Andreesen “Rachleff’s Corollary of Startup Success” “The only thing that matters is getting to product/market fit.”
  16. 16. Empathy Map
  17. 17. Clayton M. Christensen, et al. What are ‘jobs to be done’? “[The consumer] simply has a job to be done and is seeking to ‘hire’ the best product or service to do it.”
  18. 18. Christensen on Jobs to be done
  19. 19. The Value Proposition Canvas
  20. 20. Key resources are the assets required to offer and deliver the previously described elements… 6. Key Resources Physical Intellectual Human Financial
  21. 21. … by performing a number of Key Activities. 7. Key Activities Production Problem solving Platform/Network
  22. 22. Some activities are outsourced and some resources are acquired outside the enterprise. 8. Key Partnerships MOTIVATIONS Optimization & economy of scale Reduction of risk & uncertainty Acquisition of particular resources & activities “think through why and when you need partners”
  23. 23. The business model elements result in the cost structure. 9. Cost Structure BROAD CATEGORIES Cost-driven Value-driven CHARACTERISTICS Fixed costs Variable costs Economies of scale Economies of scope
  24. 24. According to Steve Blank What is not on the canvas? Market type Market size Competition Industry dynamics
  25. 25. What’s next? “[the] business model canvas is the starting point for Customer Development, and the “scorecard” that monitors startups’ progress as they turn their hypotheses about what customers want into actionable facts.”
  26. 26. On Art & Entrepreneurship “[Founders and entrepreneurial employees] are rare, unique and crazy. They’re artists.”
  27. 27. Questions?
  28. 28. Take your blank framework and write one of your ‘crazy ideas’ at the top of it. Before you go
  29. 29. THANK YOU. @sturtz