The document introduces the concept of a business model and distinguishes it from a business plan. It defines a business model as describing how an organization creates, delivers, and captures value using nine building blocks: customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure. These building blocks cover four main areas of a business: customers, offer, infrastructure, and financial viability. The document then provides a deeper dive into each of the nine business model building blocks and shows an example of how they apply to Skype's "freemium" business model.

1. Brief Introduction: Business Model GenerationShenzhen Startup MeetupAugust 23, 20111

2. Sourced fromwww.businessmodelgeneration.comWritten by: Alexander Osterwalderand Yves Pigneur2Note: original work has been adapted under the license:http://creativecommons.org/licenses/by-sa/3.0/

3. Before we start, a Business Model is not a Business Plan.What is a Business Plan?A 30 page doc investors make you write, which they will not read. You (founder) should write one at the appropriate time. Typical formatExecutive SummaryCompany OverviewBusiness EnvironmentDetailed Company DescriptionCompany StrategyFinancial ReviewIncome StatementBalance SheetCash-flow StatementAction Plan3

4. What is a Business Model?A business model describes the rationale of how an organization creates, delivers, and captures value.It can be described using nine basic building blocks that show the logic of how a company intends to make money. The nine blocks cover the four main areas of a business: CustomersOfferInfrastructureFinancial viabilityThe business model is a blueprint for a strategy to be implemented through organizational structures, processes, and systems.4

5. 9 Business Model Building BlocksCustomer SegmentsAn organization serves one or several Customer Segments. Value PropositionsThe way to it solves customer problems and satisfies customer needs. ChannelsVPs are delivered to customers through communication, distribution, and sales channels. Customer RelationshipsCustomer relationships are established and maintained with each Customer Segment. Revenue StreamsRevenue streams result from value propositions successfully offered to customers. Key ResourcesKey resources are the assets required to offer and deliver the previously described elements… Key Activities…by performing a number of Key Activities. Key PartnershipsSome activities are outsourced and some resources are acquired outside the enterprise. Cost StructureThe business model elements result in the cost structure.5

6. Deeper Dive into the 9 Building Blocks6<slides omitted>

7. 7The Business Model Canvas

8. 8Example: Skype (Uses a “freemium” model)Let’s look at this closer. It’s a voice calling services company with the operating economics of a s/w company. No telco infrastructure.

9. We’ve just scratched the surfacePatterns of Business ModelsUnbundling Business ModelsThe Long TailMulti-sided PlatformsFreemium modelsOpen Business ModelsDesign TechniquesCustomer InsightsIdeationVisual ThinkingPrototypingStorytellingScenariosStrategyBusiness Model EnvironmentEvaluating Business ModelsBlue Ocean StrategyManaging Multiple Business ModelsProcessBusiness Models Design Process9Other Topics Beyond Business ModelsWriting Your Business PlanSources of FundingHow to Pitch to InvestorsWhat Investors are looking forLean DevelopmentCorporate IdentityThe Customer Development Process (S Blank’s The 4 Steps)Customer DiscoveryCustomer ValidationCustomer CreationCompany BuildingExits (Exit fast and exit often!)Much more!!

10. No more slides, let’s start using the tool!10