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Business Modeling for Startups (Semantic Web Seminar, AIFB at KIT)
 

Business Modeling for Startups (Semantic Web Seminar, AIFB at KIT)

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    Business Modeling for Startups (Semantic Web Seminar, AIFB at KIT) Business Modeling for Startups (Semantic Web Seminar, AIFB at KIT) Presentation Transcript

    • Business Modeling for Startups AIFB Seminar: Developing Business Models for the Semantic Web (WS 12/13, KIT)Julius Parrisius, Center für Innovation & Entrepreneurship 30.10.2012
    • The story What is a Design and Connection How doesBusiness Model Testing of between Business Modeland how does Business Design and and Business it relate to Models. Testing. Plan fit startups? together?
    • The story What is a Design and Connection How doesBusiness Model Testing of between Business Modeland how does Business Design and and Business it relate to Models. Testing. Plan fit startups? together?
    • Def.:A business model describes the rationaleof how an organization creates, delivers,and captures value. Business Model Generation, A. Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self published, 2010
    • Def.:Or in English: A business model describeshow your company makes money. What’s a startup? First Principles, Steve Blank, Blog article, www.steveblank.com (Retrieved Oct 26, 2012)
    • An ad-based freemium-model. Advertiser Money Lead to music fans Free music service Music-fan (free) Subscription fee $9.99/month Music-fan Ad-free premium music (premium) serviceSo far 15mio users are signed up, 4mio of them aspaying customers (at: 08/2012).
    • A one-sided Match-making plattform. Match-making service Visitor Room to rent Money Match-making service Renter Community 6-12 % commissionMore than 200.000 offers in more than 26.000 cities(192 countries) and over 1mio users (at: 07/2012).
    • A marketplace for fund seekers. Large micro-funding Small micro-funding exposure exposure member member Fund seeker Crowd of backers 5 % Gebühr Small reward Large reward74.000 projects (success rate of 44%) have beenfunded with roughly $381mio (at: 10/2012).
    • Def.:A startup is a human institution designedto create a new product or serviceunder conditions of extreme uncertainty. The lean startup, Eric Ries, Crown Business, 2011
    • Def.:[…] a startup is an organization formedto search for a repeatable and scalablebusiness model. Teaching Entrepreneurship – By Getting Out of the Building, Steve Blank, Blog article, www.steveblank.com (Retrieved Oct 26, 2012)
    • business model© kevin dooley, Flickr.com
    • The story What is a Design and Connection How doesBusiness Model Testing of between Business Modeland how does Business Design and and Business it relate to Models. Testing. Plan fit startups? together?
    • Design Testing
    • Design
    • “[…] building a product is NOT“the product” of your startup.Your business model is “the product”. Running Lean (2nd edition), Ash Maurya, O‟Reilly, 2012
    • What Value are we delivering?
    • Which Customer are we serving?
    • Value Customer
    • Why is this so important?Life is too short to build somethingnobody wants. Running Lean (2nd edition), Ash Maurya, O‟Reilly, 2012
    • Customer focus should be on theearly adopters in the beginning. Technology adoption lifecycle (Everett Rogers„ bell curve) Early adopters Early majority Refined with „the Chasm“ (Crossing the Chasm, Geoffrey Moore, Harper, 1991)
    • © Alex Osterwalder, Flickr.com
    • Goal: Product-Market FitWhich „Jobs“ is my customertrying to get done?(functional, social, emotional, basic …)What are her „Pains“?(emotions, costs, situations, risik …)What „Gains“ is she hoping for?(functional, social, emotional, costs …) All graphics © Alex Osterwalder, Flickr.com
    • What products/services is the VP built around? (in-/tangible, digital/virtual, financial …) How are they „pain relievers“? (emotions, costs, situations, risks …) How are they producing „Gains“? (functional, social, emotional, costs …)All graphics © Alex Osterwalder, Flickr.com
    • You are not alone.© Luix90, Flickr.com
    • Blue OceanRed Ocean Blue Ocen Strategy, Kim and Mauborgne, Harvard Business School Press, 2005
    • The Strategy Canvas © Kim and Mauborgne, 2012, www.blueoceanstrategy.com
    • Hows does my VP measure up against competing VPs?Can I fill the „open slot“? © Alex Osterwalder, Flickr.com
    • Avg. Income: $12.50/hr A search saves the Savings: user 6min (avg). $1.25/search Creating value at $1.25/search Google creates Google in U.S.: $1.5bln value/day 1.2bln searches/day in U.S. Creating value at $1.25/search Cost for Google: Cost to customer 0.2 cents/search value ratio: 625!!!„ [..] a stunning value proposition by any measure.“ IT-Driven Business Models, Kagermann et al., John Wiley & Sons, 2011
    • Design Testing
    • Testing
    • “Get out of the building!” Steve Blank has preached this for over adecade wherever and whenever he could. © iagoarchangel, Flickr.com
    • The old way The Four Steps to the Epiphany, Steve Blank, printed by Lulu.com, 2006, p. 2.
    • The new way Lean Startups Aren’t Cheap Startups, Steve Blank, Blog article, http://venturebeat.com/2009/11/03/lean-startups- aren‟t-cheap-startups/ , (Retrieved Oct 26, 2012)
    • Customer Development© Steve Blank„s Customer Development by Brant Cooper, www.custdev.com (Retrieved Oct 26, 2012)
    • Validated Learning A scientific method to build your business. 3 1 1. 3.In your mind:1. What do I want to test?2. How can I measure it?3. What do I 2. 2 have to build? © Eric Ries, The Lean Startup, 2011
    • © Brintam, Flickr.comThe goal is tominimize the total time through the loop.
    • The story What is a Design and Connection How doesBusiness Model Testing of between Business Modeland how does Business Design and and Business it relate to Models. Testing. Plan fit startups? together?
    • Where is the connection?Design Testing
    • © Alex Osterwalder, Flickr.com
    • © Alex Osterwalder, Flickr.comMake sure to build stuff people want.
    • © Alex Osterwalder, Flickr.comBuild a viable business.
    • The story What is a Design and Connection How doesBusiness Model Testing of between Business Modeland how does Business Design and and Business it relate to Models. Testing. Plan fit startups? together?
    • How do they fit together?Business PlanModel
    • Quote:A good plan violently executed now isbetter than a perfect plan executednext week. US Army General George S. Patton
    • A famous Silicon Valley mantra:“Better done than perfect”. Reported by PionierGarage after their Silicon Valley Tour, 2011.
    • © Sharon Drummond, Flickr.com“A study recently released by Babson College analyzed 116businesses started by alumni [and] found no statistical difference insuccess between those businesses started with formal written plansand those without them...” Enterprise: Do Start-Ups Really Need Formal Business Plans, Wall Street Journal, 1/9/07
    • Planning is ok, but we don„t know thefuture, so it has to be appropriate. high high Business Plan Waste Waste USE OF USE OFRESOURCES RESOURCES Irresponsible Business Model Irresponsible Planning low Planning low low RISK high low RISK high Both graphics: © Julius Parrsius
    • Today many resources are free or cheap=> we can run experiments.Time is the only resource that will alwaysbe limited => we have to fail fast. „Fail fast“ concept applied from: Fail Fast, Jim Shore, IEEE Computer Society, 2004, www.martinfowler.com/ieeeSoftware/failFast.pdf
    • Why is the Business Model Canvas great? fast. concise. portable. Running Lean (2nd edition), Ash Maurya, O‟Reilly, 2012
    • The business modell canvasis a first step towards acomplete business plan. © Thomas Leth-Olsen, Flickr.com
    • A business plan isnecessary in theright stage. © Karthick R., Flickr.comIt should be seen as a conversation withstakeholders (employees, partners, investors …).
    • Inhalte eines Business Plans Cover Page and Table of Contents Executive Summary Business Description Business Environment Analysis Industry Background Competitive Analysis Market Analysis Marketing Plan Operations Plan Management Team Financial Plan Attachments and Milestones
    • Operations Plan Market Analysis Business Description Marketing Plan Financial Plan
    • Perfect your pitch, then write your plan.Use the business-plan exercise as a way to get your team on thesame page.Keep it short: ten to twenty pages.Spend no more than two weeks writing it.Don‟t get obsessed with details in your financial forecast because itshould be one page long. Is a business plan necessary, Guy Kawasaki (Silicon Valley VC, bestselling author), blog article, blog.guykawasaki.com (Retrieved Oct 27, 2012)
    • Thank you!Julius ParrisiusStartup Manager, Center für Innovation & EntrepreneurshipE-Mail: parrisius@cie-kit.de