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Business Model Elements<br />Boulder/Denver Lean Startup Meetup<br />17 March 2011<br />Eric Wu<br />@ewu<br />
<ul><li>What is a business model?
Why should I care?
What are the elements? Example frameworks
How does it fit into Lean Startup?</li></li></ul><li>One simple question<br />How will the businesscreate value through it...
What is a business model?<br /><ul><li>All elements required to answer question…
And how they influence each other…
And where innovative execution makes the whole thing unique</li></li></ul><li>Why should I care?<br />Build, articulate, a...
A first, risk-free test
Builds expertise in face of unknown
Practice telling your story</li></ul>Clear understanding of your business model is critical to implementing the Lean Start...
What are the elements?<br /><ul><li>Mix and importance different for each business
A framework gives common areas to explore
Two good examples</li></ul>The Four P’s (marketing mix)<br />Maurya’s Hybrid Business Model Canvas<br />
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Boulder/Denver Lean Startup Meetup - Business Model Elements

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Transcript of "Boulder/Denver Lean Startup Meetup - Business Model Elements"

  1. 1. Business Model Elements<br />Boulder/Denver Lean Startup Meetup<br />17 March 2011<br />Eric Wu<br />@ewu<br />
  2. 2. <ul><li>What is a business model?
  3. 3. Why should I care?
  4. 4. What are the elements? Example frameworks
  5. 5. How does it fit into Lean Startup?</li></li></ul><li>One simple question<br />How will the businesscreate value through its operations?<br />Profit<br /> Revenue<br />Marketshare<br />
  6. 6. What is a business model?<br /><ul><li>All elements required to answer question…
  7. 7. And how they influence each other…
  8. 8. And where innovative execution makes the whole thing unique</li></li></ul><li>Why should I care?<br />Build, articulate, and revise business model because:<br /><ul><li>Forces concept to gel
  9. 9. A first, risk-free test
  10. 10. Builds expertise in face of unknown
  11. 11. Practice telling your story</li></ul>Clear understanding of your business model is critical to implementing the Lean Startup methodology<br />
  12. 12. What are the elements?<br /><ul><li>Mix and importance different for each business
  13. 13. A framework gives common areas to explore
  14. 14. Two good examples</li></ul>The Four P’s (marketing mix)<br />Maurya’s Hybrid Business Model Canvas<br />
  15. 15. The Four P’s<br />Product<br />Price<br />Placement<br />Promotion<br />
  16. 16. The Four P’s<br />Product<br />What will you sell to customer?<br /><ul><li>Problem/solution
  17. 17. Target market / segmentation
  18. 18. Key features
  19. 19. Cost
  20. 20. Competitive advantage</li></ul>Price<br />What will your customer pay?<br /><ul><li>Cost +
  21. 21. Market based
  22. 22. Value based
  23. 23. Freemium
  24. 24. Discount strategy</li></ul>Placement<br />How will you get product to customer?<br /><ul><li>Distribution methods
  25. 25. Sales methods</li></ul>Promotion<br />How will customer learn about product (and how do you learn about customer)?<br /><ul><li>Target market / segmentation
  26. 26. Communication tactics
  27. 27. Customer development
  28. 28. Customer support</li></li></ul><li>The Four P’s<br />Pros<br />Generally good at covering all the bases<br />Applies to any type of business<br />Concept accounts for interdependency<br />Cons<br />Can be too high-level, easy to miss elements<br />Applies to any type of business<br />Where’s the customer-focus?<br />Assumes you remember the special sauce<br />
  29. 29. Hybrid Business Model Canvas<br />
  30. 30. Hybrid Business Model Canvas<br />Pros<br />Tailored to consumer web service business<br />Good coverage of business model themes<br />Remembers the special sauce for you<br />Cons<br />Tailored to consumer web service business<br />Overlooks Sales (understandable)<br />Doesn’t emphasize interdependence<br />
  31. 31. How does this fit into Lean Startup?<br />Lean Startup Review<br />Build scalable, repeatable business as quickly and efficiently as possible<br />Use validated data to prove/disprove assumptions<br />Pivot based on learning<br />Every element of business model is fair game for iterative testing<br />
  32. 32. How does this fit into Lean Startup?<br />Key business model areas for iterative testing:<br />Target market<br />Distribution method<br />Pricing / revenue model<br />Marketing / demand creation<br />Competitive advantages / positioning<br />Test<br />Hypothesize<br />Pivot<br />
  33. 33. Resources<br />Four P’s<br />50 year old framework, lots of resources out there<br />A good example: http://www.mindtools.com/pages/article/newSTR_94.htm<br />Hybrid Business Model Canvas<br />Ash Maurya’s original post: http://www.ashmaurya.com/2010/08/businessmodelcanvas/<br />Hybrid Business Model Canvas in an editable PowerPoint: http://internetandstuff.com/post/982743243/business-model-canvas-on-powerpoint-download-link<br />Entrepreneur’s Guide to Customer Development<br />http://www.amazon.com/dp/0982743602/<br />
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