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Business modeling and Lean

         an introduction in both

          Marcellien Breedveld


Ideas that last – Startup Weekend – 17 november
What’s a Startup?
What’s a Startup?
What	
  is	
  a	
  business	
  model?	
  	
  

A	
  business	
  model	
  describes	
  how	
  a	
  company	
  	
  
creates	
  and	
  delivers	
  Value	
  for	
  its	
  customers	
  	
  
and	
  captures	
  value	
  for	
  itself	
  	
  
Classic air travel model


                                            revenue	
  
                passengers	
                	
  



                                                                air	
  travel	
  
                                                    costs	
  
                                                    	
  
                                     aircra2,	
  fuel	
                             cleaning	
  


                     airport	
                                     food	
  



   runway	
                        jetway	
  

                     checkin	
  
Ryanair model


            budget	
                 revenue	
  
          passengers	
               	
  

                                                          revenue	
  
                                                          	
                          food	
  



                                                   costs	
  
                                                   	
  
                                                               aircra2,	
  fuel	
  
                       airport	
  


                                                                                        cleaning	
  


                                                        checkin	
                       jetway	
  
Ryanair model


            budget	
                           revenue	
  
          passengers	
                         	
  

                                                                    revenue	
  
                                                                    	
                          food	
  


                                 revenue	
  
                                                             costs	
  
                                 	
  
                                                             	
  
                                                                         aircra2,	
  fuel	
  
                       airport	
  


                                                                                                  cleaning	
  


                                                                  checkin	
                       jetway	
  
Ryanair model


                        budget	
                                revenue	
  
                      passengers	
                              	
  

                                                                                     revenue	
  
                                                                                     	
                          food	
  

          car	
  rental	
  
                                                  revenue	
  
                                                                              costs	
  
                                                  	
  
                                                                              	
  
                                                                                          aircra2,	
  fuel	
  
  hotels	
                         airport	
  


                                                                                                                   cleaning	
  
               parking	
                                    shopping	
  
                                       food	
  
                                                                                   checkin	
                       jetway	
  
How not to use the business model canvas
For whom are we creating value?
Who are your most important customers?


           Customer	
  segments	
  
           	
  
           1)  Everybody	
  who	
  you	
  create	
  value	
  for	
  
           2)  Make	
  an	
  archetype/persona	
  of	
  every	
  segment	
  
           3)  In	
  a	
  mulC-­‐sided	
  plaEorm	
  every	
  segment	
  has	
  its	
  
                own	
  value	
  proposiCon	
  
           4)  How	
  do	
  they	
  solve	
  the	
  problem	
  now?	
  What	
  
                does	
  it	
  cost?	
  
           	
  
           	
  


            Who are you creating value for?
     Sketch your customers’ persona’s / archetypes
             Describe a day out of their live
The core of your business model




             The	
  Value	
  Proposi>on	
  
             	
  
             1)  Which	
  problem	
  are	
  you	
  solving,	
  or	
  which	
  need	
  are	
  
                 you	
  fulfilling?	
  	
  
             2)  What	
  is	
  your	
  soluCon	
  to	
  solve	
  your	
  customers’	
  
                 problem/need?	
  
             3)  Which	
  customer	
  value	
  do	
  you	
  create	
  with	
  this	
  
                 soluCon?	
  
             	
  

                                           	
  
     1.  Which	
  problem	
  are	
  you	
  solving?	
  	
  
     2.  What	
  is	
  your	
  soluCon?	
  
     3.  Which	
  customer	
  value	
  do	
  you	
  create?	
  
Channels




	
  
•  How	
  do	
  you	
  reach	
  your	
  customers?	
  	
  
•  How	
  do	
  they	
  want	
  to	
  be	
  reached?	
  How	
  are	
  they	
  
     currently	
  reached	
  through	
  which	
  (distribuCon)	
  
     channels?	
  And	
  what	
  does	
  not	
  work	
  or	
  why	
  does	
  it	
     1)  Communica+on	
  	
  
     work?	
  	
                                                                      2)  Distribu+on	
  
•  How	
  much	
  do	
  you	
  channels	
  cost	
  you?	
                             3)  Technical	
  customer	
  service	
  
Customer relationships




                               Customer	
  rela>onships	
  
                               	
  
                               •  How	
  do	
  you	
  want	
  to	
  relate	
  with	
  your	
  customer?	
  	
  
                               •  How	
  will	
  you	
  engage	
  them	
  to	
  your	
  website	
  /	
  product?	
  
                               •  How	
  costly	
  is	
  your	
  relaConship?	
  
                               •  How	
  do	
  your	
  customers	
  currently	
  work	
  with	
  your	
  compeCtors?	
  
                                    What	
  does	
  not	
  work,	
  what	
  does	
  work?	
  	
  	
  


                               1)  The	
  type	
  of	
  relaConship	
  a	
  company	
  establishes	
  with	
  the	
  
                                    customer	
  
                               2)  How	
  inCmate	
  do	
  you	
  want	
  to	
  be	
  with	
  your	
  customers	
  
                               3)  AcquisiCon,	
  retenCon	
  and	
  upselling	
  
                               	
  
 1)  What	
  type	
  of	
  relaConship	
  do	
  you	
  build	
  with	
  your	
  customer	
  
 2)  How	
  inCmate	
  do	
  you	
  want	
  to	
  be	
  with	
  your	
  customers	
  
 3)  AcquisiCon,	
  retenCon	
  and	
  upselling	
  
Building blocks – revenue streams




Revenue	
  streams	
  
	
  
1)  Revenue	
  model	
  
2)  Actual	
  prices	
  
	
  
Building blocks – key resources




Key	
  resources	
  
	
  
1)  Physical	
  
2)  Intellectual	
  
3)  Financial	
  
4)  Human	
  
Building blocks – key activities




	
  
What	
  are	
  the	
  most	
  important	
  things	
  you	
  must	
  excell	
  at	
  in	
  order	
  to	
  
create	
  and	
  deliver	
  the	
  value	
  proposiCon	
  and	
  to	
  moneCze	
  on	
  it.	
  	
  
	
  
Building blocks – key partners




  Key	
  partners	
  
  	
  
  1)  Suppliers	
  
  2)  Partners	
  	
  
  	
  
Building blocks – cost structure




    Cost	
  structure	
  
    	
  
    1)  Type	
  
    2)  Amount	
  
    3)  Fixed	
  /	
  variable	
  
    	
  
How NOT to use the business model canvas

      1.  As	
  a	
  subsCtuCon	
  for	
  a	
  business	
  plan	
  
      2.  As	
  a	
  staCc	
  tool	
  
      3.  As	
  a	
  goal	
  on	
  itself	
  
      4.  As	
  a	
  part	
  of	
  your	
  presentaCon	
  
      5.  As	
  a	
  blanks	
  exercise	
  
      6.  Do	
  NOT	
  use	
  a	
  ballpoint	
  
      7.  Do	
  NOT	
  use	
  the	
  examples	
  literally	
  
      8.  Do	
  NOT	
  write	
  one	
  Value	
  ProposiCon	
  for	
  different	
  
           Customer	
  Segments	
  
Great, such an exercise…

 	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  …but	
  what	
  is	
  it	
  worth?	
  
 	
  
 	
  
 	
  
 Can	
  you	
  succesfully	
  execute	
  on	
  a	
  poster	
  full	
  of	
  
 guesses?	
  
 	
  
 “No	
  business	
  plan	
  survives	
  first	
  contact	
  with	
  	
  
 customers”	
  
 Steve	
  Blank	
  	
  	
  
 	
  
Work as a lean startup…


             Learn	
  as	
  fast	
  as	
  possible	
  	
  
             	
  
             Create	
  maximum	
  value	
  for	
  your	
  customer	
  
             	
  
             Have	
  strong	
  visions	
  and	
  are	
  rigourous	
  in	
  tesCng	
  
             	
  
             Minimise	
  waste	
  
Change assumptions into facts




   First test the problem, then the solution
Design	
  the experiment to test your
assumption

	
  
What	
  do	
  you	
  want	
  to	
  learn?	
  
	
  

                                                • Keep	
  it	
  simpel	
  
                                                • Pass/fail	
  experiment	
  
                                                • Set	
  minimum	
  criteria	
  for	
  validaCon	
  
                                                • Fast	
  test,	
  short	
  cycle	
  Cme	
  
	
  
	
  
	
  
Minimum Viable Product (MVP)

   An	
  MVP	
  is	
  the	
  minimum	
  amount	
  of	
  effort	
  creaCng	
  some	
  
   value	
  for	
  customers	
  and	
  needed	
  to	
  provide	
  speedy	
  
   feedback	
  to	
  determine	
  the	
  viability	
  of	
  a	
  product.	
  
   	
  
   Can	
  be	
  a	
  mock-­‐up,	
  video,	
  fast	
  prototype	
  (3D	
  prinCng),	
  
   restricted	
  service,	
  etc…	
  
   	
  
   An	
  MVP	
  naturally	
  comes	
  in	
  later	
  stages	
  of	
  Customer	
  
   Development	
  as	
  it	
  is	
  a	
  rudimentary	
  soluCon	
  to	
  a	
  problem	
  
   worth	
  solving.	
  	
  
   	
  
20121711 StartupWeekend-MarcellienBreedveld_Businessmodelandlean
Where are the facts?




 There	
  are	
  no	
  answers	
  	
  
 inside	
  	
  
 your	
  office	
  
So, get out of the building




             	
  
             So	
  get	
  out	
  of	
  the	
  building!	
  
             	
  
Any questions                                   ?
                    more information:

         Marcellien.breedveld@utrechtinc.nl

www.utrechtinc.nl           @UtrechtInc or @marcellien
Dollar shave club
Customer relationships




                 Customer	
  rela>onships	
  
                 	
  
                 •  How	
  do	
  you	
  want	
  to	
  relate	
  with	
  your	
  customer?	
  	
  
                 •  How	
  will	
  you	
  engage	
  them	
  to	
  your	
  website	
  /	
  product?	
  
                 •  How	
  costly	
  is	
  your	
  relaConship?	
  
                 •  How	
  do	
  your	
  customers	
  currently	
  work	
  with	
  your	
  compeCtors?	
  
                      What	
  does	
  not	
  work,	
  what	
  does	
  work?	
  	
  	
  


                 	
  
Reading material
How not to use the business model canvas



                                                                           ProvocaCve,	
  
                                                                            aggressive,	
  
                                Flying	
  	
        Need	
  to	
           low	
  cost,	
  no	
       Passengers	
  
  Secondary	
                                     o2en	
  travel	
           customer	
               travelling	
  for	
  a	
  
 airport	
  mgt	
                                  easy	
  and	
              service	
  	
           weekend/short	
  
   and	
  local	
                                  cheap	
  to	
                                      stay	
  abroad	
  
 government	
                                       nearby	
                                          	
  
                                                     places	
  	
  
                                                  Pay	
  only	
  for	
     Secondary	
  
 AviaCon	
  fuel	
               HR,	
                                     airports	
  
                                                  value	
  taken	
  
  suppliers	
  	
             airplanes	
                                  	
  
                                                 Cheap	
  Cckets	
  	
  
                                                                           Website	
  	
  



           Low	
  cost	
  structure,	
  	
                                      Tickets	
  
          Bargaining	
  every	
  deal	
  	
                                Airport	
  subsidies	
  	
  
              Airplanes,	
  HR	
                                           Luggage	
  check-­‐in	
  
The customer development process

                         Repeatable	
  &	
  scalable	
  
 Problem-­‐              sales	
  model	
  	
  
 soluCon	
  fit	
  	
  

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20121711 StartupWeekend-MarcellienBreedveld_Businessmodelandlean

  • 1. Business modeling and Lean an introduction in both Marcellien Breedveld Ideas that last – Startup Weekend – 17 november
  • 4. What  is  a  business  model?     A  business  model  describes  how  a  company     creates  and  delivers  Value  for  its  customers     and  captures  value  for  itself    
  • 5. Classic air travel model revenue   passengers     air  travel   costs     aircra2,  fuel   cleaning   airport   food   runway   jetway   checkin  
  • 6. Ryanair model budget   revenue   passengers     revenue     food   costs     aircra2,  fuel   airport   cleaning   checkin   jetway  
  • 7. Ryanair model budget   revenue   passengers     revenue     food   revenue   costs       aircra2,  fuel   airport   cleaning   checkin   jetway  
  • 8. Ryanair model budget   revenue   passengers     revenue     food   car  rental   revenue   costs       aircra2,  fuel   hotels   airport   cleaning   parking   shopping   food   checkin   jetway  
  • 9. How not to use the business model canvas
  • 10. For whom are we creating value? Who are your most important customers? Customer  segments     1)  Everybody  who  you  create  value  for   2)  Make  an  archetype/persona  of  every  segment   3)  In  a  mulC-­‐sided  plaEorm  every  segment  has  its   own  value  proposiCon   4)  How  do  they  solve  the  problem  now?  What   does  it  cost?       Who are you creating value for? Sketch your customers’ persona’s / archetypes Describe a day out of their live
  • 11. The core of your business model The  Value  Proposi>on     1)  Which  problem  are  you  solving,  or  which  need  are   you  fulfilling?     2)  What  is  your  soluCon  to  solve  your  customers’   problem/need?   3)  Which  customer  value  do  you  create  with  this   soluCon?       1.  Which  problem  are  you  solving?     2.  What  is  your  soluCon?   3.  Which  customer  value  do  you  create?  
  • 12. Channels   •  How  do  you  reach  your  customers?     •  How  do  they  want  to  be  reached?  How  are  they   currently  reached  through  which  (distribuCon)   channels?  And  what  does  not  work  or  why  does  it   1)  Communica+on     work?     2)  Distribu+on   •  How  much  do  you  channels  cost  you?   3)  Technical  customer  service  
  • 13. Customer relationships Customer  rela>onships     •  How  do  you  want  to  relate  with  your  customer?     •  How  will  you  engage  them  to  your  website  /  product?   •  How  costly  is  your  relaConship?   •  How  do  your  customers  currently  work  with  your  compeCtors?   What  does  not  work,  what  does  work?       1)  The  type  of  relaConship  a  company  establishes  with  the   customer   2)  How  inCmate  do  you  want  to  be  with  your  customers   3)  AcquisiCon,  retenCon  and  upselling     1)  What  type  of  relaConship  do  you  build  with  your  customer   2)  How  inCmate  do  you  want  to  be  with  your  customers   3)  AcquisiCon,  retenCon  and  upselling  
  • 14. Building blocks – revenue streams Revenue  streams     1)  Revenue  model   2)  Actual  prices    
  • 15. Building blocks – key resources Key  resources     1)  Physical   2)  Intellectual   3)  Financial   4)  Human  
  • 16. Building blocks – key activities   What  are  the  most  important  things  you  must  excell  at  in  order  to   create  and  deliver  the  value  proposiCon  and  to  moneCze  on  it.      
  • 17. Building blocks – key partners Key  partners     1)  Suppliers   2)  Partners      
  • 18. Building blocks – cost structure Cost  structure     1)  Type   2)  Amount   3)  Fixed  /  variable    
  • 19. How NOT to use the business model canvas 1.  As  a  subsCtuCon  for  a  business  plan   2.  As  a  staCc  tool   3.  As  a  goal  on  itself   4.  As  a  part  of  your  presentaCon   5.  As  a  blanks  exercise   6.  Do  NOT  use  a  ballpoint   7.  Do  NOT  use  the  examples  literally   8.  Do  NOT  write  one  Value  ProposiCon  for  different   Customer  Segments  
  • 20. Great, such an exercise…                                                                …but  what  is  it  worth?         Can  you  succesfully  execute  on  a  poster  full  of   guesses?     “No  business  plan  survives  first  contact  with     customers”   Steve  Blank        
  • 21. Work as a lean startup… Learn  as  fast  as  possible       Create  maximum  value  for  your  customer     Have  strong  visions  and  are  rigourous  in  tesCng     Minimise  waste  
  • 22. Change assumptions into facts First test the problem, then the solution
  • 23. Design  the experiment to test your assumption   What  do  you  want  to  learn?     • Keep  it  simpel   • Pass/fail  experiment   • Set  minimum  criteria  for  validaCon   • Fast  test,  short  cycle  Cme        
  • 24. Minimum Viable Product (MVP) An  MVP  is  the  minimum  amount  of  effort  creaCng  some   value  for  customers  and  needed  to  provide  speedy   feedback  to  determine  the  viability  of  a  product.     Can  be  a  mock-­‐up,  video,  fast  prototype  (3D  prinCng),   restricted  service,  etc…     An  MVP  naturally  comes  in  later  stages  of  Customer   Development  as  it  is  a  rudimentary  soluCon  to  a  problem   worth  solving.      
  • 26. Where are the facts? There  are  no  answers     inside     your  office  
  • 27. So, get out of the building   So  get  out  of  the  building!    
  • 28. Any questions ? more information: Marcellien.breedveld@utrechtinc.nl www.utrechtinc.nl @UtrechtInc or @marcellien
  • 30. Customer relationships Customer  rela>onships     •  How  do  you  want  to  relate  with  your  customer?     •  How  will  you  engage  them  to  your  website  /  product?   •  How  costly  is  your  relaConship?   •  How  do  your  customers  currently  work  with  your  compeCtors?   What  does  not  work,  what  does  work?        
  • 32. How not to use the business model canvas ProvocaCve,   aggressive,   Flying     Need  to   low  cost,  no   Passengers   Secondary   o2en  travel   customer   travelling  for  a   airport  mgt   easy  and   service     weekend/short   and  local   cheap  to   stay  abroad   government   nearby     places     Pay  only  for   Secondary   AviaCon  fuel   HR,   airports   value  taken   suppliers     airplanes     Cheap  Cckets     Website     Low  cost  structure,     Tickets   Bargaining  every  deal     Airport  subsidies     Airplanes,  HR   Luggage  check-­‐in  
  • 33. The customer development process Repeatable  &  scalable   Problem-­‐ sales  model     soluCon  fit