Startup MBA 2.1 - Business models - prototyping and moat design

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  • 1. business model prototyping & moats http://startupmba.foundercentric.com
  • 2. hello@foundercentric.com foundercentric.com @foundercentric ! Mailing list: http://bit.ly/fc-list
  • 3. Part I Prototyping, communication and exploration
  • 4. Alex Osterwalder’s Business Model Canvas
  • 5. Value propositions aren’t just lists of features. ! It’s how you create joy or relieve pain. You sell your value proposition...
  • 6. Very specific customer segments are easier to think about. ! It’s better to have multiple specific segments than a single generic one. To a customers segment
  • 7. Who you reach through some channel Channel has 2 parts: how they hear about it and how they actually buy it
  • 8. How do you stop them from forgetting about you next time? ! How do you increase lock-in and retention? You have an ongoing relationship to create retention and lock-in
  • 9. The right side of the canvas is customer-facing. ! It’s about reaching & keeping the customer and generating revenue. That’s how you make money.
  • 10. Innovation on the left half of the canvas is about managing costs The left side is how you create the value proposition.That costs you money.
  • 11. What is the activity so strategically core to your business that you would never outsource it? To create the value proposition, you do certain Key Activities
  • 12. Key Resources are things competitors would have to replicate in order to compete. ! It could be your tech, your patents, or even your user- base. Using your Key Resources
  • 13. Your company has certain core competencies used to create & deliver the value proposition. ! Everything else can potentially come from a partner. Anything you don’t do or have yourself, you get from a partner.
  • 14. There are lots of ways to use the canvas
  • 15. Los Angeles Times Magazine, 1992
  • 16. Question What is ebay’s business model for collectors?
  • 17. Sell anything
  • 18. Sell anything Indie merchants
  • 19. Sell anything Collectors Indie merchants
  • 20. Sell anything CollectorsBuy hard- to-find products Indie merchants
  • 21. Sell anything CollectorsBuy hard- to-find products Indie merchants % commission
  • 22. Sell anything CollectorsBuy hard- to-find products Indie merchants % commission Ads
  • 23. Sell anything CollectorsBuy hard- to-find products Indie merchants % commission Ads SEO
  • 24. Sell anything CollectorsBuy hard- to-find products Indie merchants % commission Ads SEO
  • 25. Sell anything CollectorsBuy hard- to-find products Indie merchants % commission Ads SEO The most buyers
  • 26. Sell anything CollectorsBuy hard- to-find products Indie merchants % commission Ads SEO The most buyers
  • 27. Sell anything CollectorsBuy hard- to-find products Indie merchants % commission Ads SEO The most buyers The most sellers
  • 28. Sell anything CollectorsBuy hard- to-find products Indie merchants % commission Ads SEO The most buyers The most sellers
  • 29. Sell anything CollectorsBuy hard- to-find products Indie merchants % commission Ads SEO The most buyers The most sellers The most products
  • 30. Sell anything CollectorsBuy hard- to-find products Indie merchants % commission Ads SEO The most buyers The most sellers The most products Acquire users
  • 31. Sell anything CollectorsBuy hard- to-find products Indie merchants % commission Ads SEO The most buyers The most sellers The most products Acquire users Acquire users
  • 32. Sell anything CollectorsBuy hard- to-find products Indie merchants % commission Ads SEO The most buyers The most sellers The most products Acquire users Acquire users Ads
  • 33. Sell anything CollectorsBuy hard- to-find products Indie merchants % commission Ads SEO The most buyers The most sellers The most products Acquire users Acquire users Ads Ratings
  • 34. What makes ebay’s model so strong? The Key Resources are difficult to reproduce since they depend on being the biggest
  • 35. Question Why has ebay been so resistant to competitors? What makes its model so strong?
  • 36. Sell anything CollectorsBuy hard- to-find products Indie merchants % commission Ads SEO The most buyers The most sellers The most products Acquire users Acquire users Ads Ratings
  • 37. Ebay’s network effect Ebay’s Key Resources are all a result of being the biggest, so they always have an edge over any new competitor
  • 38. Does this capture every detail of ebay’s business? What about Paypal? Power sellers? Buy-it-now?
  • 39. Business models are sketches Sketches aren’t meant to be perfect. They’re a disposable tool for understanding and communication.
  • 40. Question Why do Chrome and Android matter so much to Google?
  • 41. Searchers
  • 42. Find anything Searchers
  • 43. Find anything Searchers ?
  • 44. Find anything Searchers .000X / search
  • 45. So who is paying?
  • 46. Find anything Searchers .000X / search
  • 47. Find anything Searchers .000X / search Advertisers
  • 48. Find anything Searchers .000X / search $ / click Advertisers
  • 49. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising
  • 50. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Measurable
  • 51. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Measurable Any budget
  • 52. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Measurable Any budget Big audience
  • 53. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Big audience
  • 54. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Big audience
  • 55. Those are the basics. But how do they get and keep users?
  • 56. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Big audience
  • 57. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Word of mouth? Big audience
  • 58. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Word of mouth? Brand? Big audience
  • 59. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Word of mouth? Brand? Twitter? Big audience
  • 60. Seems weak. When the answer seems suspicious, keep looking.
  • 61. When you searched for something today, why did you use Google?
  • 62. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Word of mouth? Brand? Twitter? Big audience
  • 63. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Word of mouth? Brand? Twitter? Big audience Greatproduct?
  • 64. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Word of mouth? Brand? Twitter? Big audience Greatproduct? No other options?
  • 65. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Word of mouth? Brand? Twitter? Big audience Greatproduct? No other options?
  • 66. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Word of mouth? Brand? Twitter? Big audience
  • 67. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Word of mouth? Brand? Twitter? Big audience It’s the default
  • 68. The default? Where?
  • 69. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Word of mouth? Brand? Twitter? Big audience It’s the default
  • 70. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Word of mouth? Brand? Twitter? Big audience It’s the default Mozilla’s Firefox
  • 71. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Word of mouth? Brand? Twitter? Big audience It’s the default Mozilla’s Firefox Apple’s Safari
  • 72. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Word of mouth? Brand? Twitter? Big audience It’s the default Mozilla’s Firefox Apple’s Safari
  • 73. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Big audience It’s the default Mozilla’s Firefox Apple’s Safari Browser partnerships
  • 74. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Big audience It’s the default Mozilla’s Firefox Apple’s Safari Browser partnerships $X00 M / year
  • 75. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Big audience It’s the default Mozilla’s Firefox Apple’s Safari Browser partnerships $X00 M / year
  • 76. Question Why do Chrome and Android matter so much to Google?
  • 77. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Big audience It’s the default Mozilla’s Firefox Apple’s Safari Browser partnerships $X00 M / year
  • 78. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Big audience It’s the default Mozilla’s Firefox Apple’s Safari Browser partnerships $X00 M / year
  • 79. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Big audience It’s the default Mozilla’s Firefox Apple’s Safari Browser partnerships $X00 M / year
  • 80. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Big audience It’s the default $X00 M / year
  • 81. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Big audience It’s the default $X00 M / year
  • 82. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Big audience It’s the default $X00 M / year Build a browser
  • 83. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Big audience It’s the default $X00 M / year Build a browser 35% browser share
  • 84. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Big audience It’s the default $X00 M / year Build a browser 35% browser share Our own browser
  • 85. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Big audience It’s the default $X00 M / year Build a browser 35% browser share Our own browser Phone default search
  • 86. Find anything Searchers Advertisers .000X / search $ / click Cost- effective advertising Big audience It’s the default $X00 M / year Build a browser 35% browser share Our own browser Phone default search iOS etc...
  • 87. The business model holds the answer If Google didn’t win with Chrome and Android, they would be forced to spend a fortune on partnerships (and might even lose their whole business)
  • 88. In review:
  • 89. You sell your value proposition...
  • 90. To a customers segment
  • 91. Who you reach through some channel
  • 92. You have an ongoing relationship to create retention and lock-in
  • 93. That’s how you make money.
  • 94. The left side is how you create the value proposition.That costs you money.
  • 95. To create the value proposition, you do certain Key Activities
  • 96. Using your Key Resources
  • 97. Anything you don’t do or have yourself, you get from a partner.
  • 98. Final business model tips • Separate colors for each customer segment
 
 
 
 
 

  • 99. Final business model tips • Separate colors for each customer segment • Use as few sticky notes as possible
 
 
 

  • 100. Final business model tips • Separate colors for each customer segment • Use as few sticky notes as possible • Focus on quick communication, not perfect representation
 

  • 101. Final business model tips • Separate colors for each customer segment • Use as few sticky notes as possible • Focus on quick communication, not perfect representation • Explore lots of possibilities
  • 102. Questions?
  • 103. Zappos
  • 104. Question How did Zappos survive against Amazon and others?
  • 105. Huge shoe selection U.S. shoe buyers Display ads $ / pair Returns Fast & cheap Logistics & fulfillment Marketing MarketingWare- houses Support staff Inventory Re-target WH staff
  • 106. Huge shoe selection U.S. shoe buyers Display ads $ / pair Returns Fast & cheap Logistics & fulfillment Marketing MarketingWare- houses Support staff Inventory Re-target WH staff
  • 107. Huge shoe selection U.S. shoe buyers Display ads $ / pair Returns Fast & cheap Logistics & fulfillment Marketing MarketingWare- houses Support staff Inventory Re-target WH staff
  • 108. Huge shoe selection U.S. shoe buyers Display ads $ / pair Returns Fast & cheap Logistics & fulfillment Marketing MarketingWare- houses Support staff Inventory Re-target WH staff
  • 109. Huge shoe selection U.S. shoe buyers Display ads $ / pair Returns Fast & cheap Shoe- focused logistics & fulfillment Marketing MarketingWare- houses Support staff Inventory Re-target WH staff
  • 110. Huge shoe selection U.S. shoe buyers Display ads $ / pair Returns Fast & cheap Shoe- focused logistics & fulfillment Marketing MarketingWare- houses Support staff Inventory Re-target WH staff
  • 111. Huge shoe selection U.S. shoe buyers Display ads $ / pair Returns Fast & cheap Shoe- focused logistics & fulfillment Marketing Marketing WH staff Support staff Inventory Re-target Ware- houses
  • 112. Huge shoe selection U.S. shoe buyers Display ads $ / pair Returns Fast & cheap Shoe- focused logistics & fulfillment Marketing Marketing Support staff Inventory Re-target Ware- houses
  • 113. Huge shoe selection U.S. shoe buyers Display ads “Try it on at home” returns $ / pair Returns Fast & cheap Shoe- focused logistics & fulfillment Marketing Marketing Support staff Inventory Re-target Ware- houses
  • 114. Huge shoe selection U.S. shoe buyers Display ads “Try it on at home” returns $ / pair Returns Fast & cheap Shoe- focused logistics & fulfillment Marketing Marketing Support staff Inventory Re-target Ware- houses
  • 115. Huge shoe selection U.S. shoe buyers Display ads Ridiculous customer service “Try it on at home” returns $ / pair Returns Fast & cheap Shoe- focused logistics & fulfillment Marketing Marketing Support staff Inventory Re-target Ware- houses
  • 116. Huge shoe selection U.S. shoe buyers Display ads Ridiculous customer service “Try it on at home” returns $ / pair Returns Fast & cheap Shoe- focused logistics & fulfillment Marketing Marketing Support staff Inventory Re-target Ware- houses
  • 117. Huge shoe selection U.S. shoe buyers Display ads Ridiculous customer service “Try it on at home” returns $ / pair Returns Fast & cheap Shoe- focused logistics & fulfillment Marketing Marketing Support staff Inventory Re-target Ware- houses Love