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

    • Business Model Elements
      Boulder/Denver Lean Startup Meetup
      17 March 2011
      Eric Wu
      @ewu
      • What is a business model?
      • Why should I care?
      • What are the elements? Example frameworks
      • How does it fit into Lean Startup?
    • One simple question
      How will the businesscreate value through its operations?
      Profit
      Revenue
      Marketshare
    • What is a business model?
      • All elements required to answer question…
      • And how they influence each other…
      • And where innovative execution makes the whole thing unique
    • Why should I care?
      Build, articulate, and revise business model because:
      • Forces concept to gel
      • A first, risk-free test
      • Builds expertise in face of unknown
      • Practice telling your story
      Clear understanding of your business model is critical to implementing the Lean Startup methodology
    • What are the elements?
      • Mix and importance different for each business
      • A framework gives common areas to explore
      • Two good examples
      The Four P’s (marketing mix)
      Maurya’s Hybrid Business Model Canvas
    • The Four P’s
      Product
      Price
      Placement
      Promotion
    • The Four P’s
      Product
      What will you sell to customer?
      • Problem/solution
      • Target market / segmentation
      • Key features
      • Cost
      • Competitive advantage
      Price
      What will your customer pay?
      • Cost +
      • Market based
      • Value based
      • Freemium
      • Discount strategy
      Placement
      How will you get product to customer?
      • Distribution methods
      • Sales methods
      Promotion
      How will customer learn about product (and how do you learn about customer)?
      • Target market / segmentation
      • Communication tactics
      • Customer development
      • 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
    • Hybrid Business Model Canvas
    • 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
    • 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
    • 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
    • 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/