Boulder/Denver Lean Startup Meetup - Business Model Elements
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Boulder/Denver Lean Startup Meetup - Business Model Elements Presentation Transcript

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