Business ideas and business models

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Slides from my lecture I hosted in October 2012 for students studying entrepreneurship in University of Ekaterinburg, Russia.

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Business ideas and business models

  1. 1. STARTUPENTREPENEURSHIP AND VENTURE CAPITAL Ville Simola M.Sc (Econ.)
  2. 2. About me
  3. 3. BUSINESS IDEAS AND BUSINESS MODELS
  4. 4. What is a startup?
  5. 5. Definition #1“A startup company or startup is acompany with a limited operatinghistory. These companies, generallynewly created, are in a phase ofdevelopment and research formarkets. “- Wikipedia
  6. 6. Definition #2“A startup is NOT every new business venture(actually, it is but this is not the way we use theterm anymore). It is a new techventure, internetrelated mostly, that has thepotential of rapid growththrough servicing new market segmentsand/or offering new product/services”- Quote taken from Quora.com
  7. 7. Definition #3”A startup is theorganization used tosearch for a scalablebusiness model”– Steve Blank
  8. 8. How startups are different thantraditional businesses?
  9. 9. Comparison #1 (Steve Blank)Small businesses Scalable startup• Business model found • Designed to grow big• Profitable business • Huge uncertainty• Existing team • Typically needs risk• Not all the businesses capital of internet age are • These companies are ”scalable startups” the real startups
  10. 10. Comparison #2 (Steve Blank)Traditional accounting Startup metrics• Balance sheet • Customer acquisition• Cash flow statement costs• Income statement • Customer lifetime value • Monthly burn rate
  11. 11. Comparison #3 (Steve Blank)Business plan Business model• Static-document • Can be iterated quickly• ”No business plan • Shows how company survises the first creates, delivers and customer contact” captures value• Focus on planning not • Focus on execution and execution how to make money
  12. 12. How to find a business idea?
  13. 13. Idea #1Start solving a realproblem
  14. 14. Idea #2Problems can be foundfrom everydaylife, from hobbies orfrom work life
  15. 15. Idea #3After finding the idea –sleep day or two torealize whether it’sreally a good one
  16. 16. Facts aboutbusiness ideas
  17. 17. Idea fact #1Importance is usuallyoveremphasized
  18. 18. Idea fact #2Will pivot during thejourney
  19. 19. Idea fact #3Is something thatshould not be hidden
  20. 20. Facts about thefounding team
  21. 21. Team #1Is the most importantasset you have
  22. 22. Team #2Should combine adifferent skillset
  23. 23. Team #3Needs to have high andpassionate vision
  24. 24. What is a business model?
  25. 25. Business model #1Might sound like a newconcept but is actuallynot
  26. 26. Business model #2Describes howorganization creates,delivers and capturesvalue
  27. 27. Business model #3Business model is notjust about how do youmake money
  28. 28. Examples of business models
  29. 29. Business model example #1Direct sales model:marketing and sellingproducts to a customerdirectly
  30. 30. Business model example #2Freemium model:Giving the basic versionfor free but chargingfor premium version
  31. 31. Business model example #3Subscription model:selling periodic use oraccess to a product ora service
  32. 32. Business model example #4Razorblade model:Item is sold cheap toincrease sales of acomplementaryproduct
  33. 33. Business model canvas
  34. 34. Business model canvas: FIFA Soccer World Cup Example
  35. 35. What it takes be a successful entrepeneur?
  36. 36. Success #1Technology is nice butit’s all about the value
  37. 37. Success #2Planning is good butexecution wins the war
  38. 38. Success #3Great companies arenot born they are built
  39. 39. Recommended readings
  40. 40. Recommended linksspringwise.comsteveblank.combusinessmodelcreation.comleancanvas.comarcticstartup.com
  41. 41. My contacts Ville Simola www.smolaholic.com @smolaholicville.m.simola@gmail.com

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