Presentation by Serdar Temiz, PhD Candidate at KTH Royal Institute of Technology (Sweden), at the FogGuru Opportunity Recognition training.

1. Serdar Temiz
www.serdartemiz.com
The Opportunity Recognition Module- 2019
BUSINESS Model & Toolbox:
Business Model Canvas

2. Some Questions
• What is Invention
• What is Innovation
Serdar Temiz
2019-03-19

3. There are many inventions, but far
fewer innovations.
An invention is a novel idea
Innovation is the commercialization of
thatnovel idea
Serdar Temiz
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4. Types of Innovation
1. Technology innovation
2. Process innovation
3. Product & service innovation
4. Business Model innovation
Serdar Temiz
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5. Process innovation
Implement
ation of a
new or
significantl
y improved
production
or delivery
method
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6. Technology innovation
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7. Product / service innovation
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9. Definitions
• “the content, structure, and governance of transactions designed so
as to create value through the exploitation of business opportunities”
(Zott & Amit, 2001 p 494-495)
• “defines how the enterprise creates and delivers value to customers,
and then converts payments received to profits” (Teece, 2010 p 173)
• “takes technological characteristics and potentials as inputs and
converts them through customers and markets into economic
outputs” (Chesbrough & Rosenbloom, 2002, p. 532)
• The logic of the firm, the way it operates and how it creates value for
its stakeholder (Casadesus & Ricart)
• “a set of expectations about how the business will be successful in its
environment” (Downing, 2005, p. 186)
• “stories that explain how enterprises work” (Magretta, 2002, p. 87)
2019-03-19 Serdar Temiz

10. A business Model is..
(one of many definitions) The business model is a
strategic plan to be implemented through
organizational structures, processes, and systems in
order to need customer needs
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11. How Business Models Emerge (1 of 3)
– The value chain is the string of activities that moves a
product from the raw material stage, through
manufacturing and distribution, and ultimately to the
end user.
Primary activities are directly concerned with the
creation or delivery of a product or service.
Support activities help to improve the effectiveness
or efficiency of primary activities
Raw Material
Value Chain
Primary &
Secondary
Activities +
Margin
Product /
Service
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12. The Value Chain (again)
"Competitive Advantage: Creating and Sustaining superior Performance" (1985).
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How Business Models Emerge (2 of 3)

13. The Value Chain (continued)
Entrepreneurs look at the value chain of a product
or a service to pinpoint where the value chain can
be made more effective or to spot where additional
“value” can be added.
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How Business Models Emerge (3 of 3)
Serdar Temiz

14. Do you recognize?
• Citizens rent flats via real estate agencies
for a year and pay monthly in cash
• Citizens rent flats via real estate agencies
for a year and pay monthly in cash
• Citizens rent flats flats/rooms via real
estate agencies web platform for a year
few days and pay monthly daily in cash
via credit card
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15. ... can be, even more important than tech
innovation!
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RIGHT BUSINESS MODEL

16. Finding and executing the right business
model can be the only/ main reason of the
success
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BUSINESS MODEL INNOVATION
Serdar Temiz

17. The Scientific Method
Observe
Form a hypothesis consistent with the
observations
Test the hypothesis and observe the results
If what is observed
is consistent with
the hypothesis -
use the hypothesis
but continue to
check/observe
If what is
observed, on
checking, is found
to be inconsistent
with the hypothesis
Report results
Form a new
hypothesis
consistent with the
new observations

18. What is this?
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What is this?
Xerox Model 914
Xerography ?

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27. Value
Proposition
Revenue
Model
Production
Model
Delivery
Model
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SIMPLE BUSINESS MODEL

28. Value
Proposition
10 Revenue
Model
10
Production
Model
10
Delivery
Model
10
HOW MANY OPTIONS DO WE HAVE?
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SIMPLE BUSINESS MODEL

29. • Customer needs
• Competition
• Technological change
• Social change
• Legal environment
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Forces Affecting The Business Model

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31. Source: PwC, The future of mobility, October 2013
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33. Why Is She Happy?
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35. There are different type of Business
Model Maps.
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36. Serdar Temiz
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37. Mark Johnson
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38. Product/Service
Ecosytem
Customer
EcoSystem
Finance
Value
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Basic Business Model Map

39. • A Value Proposition is an overall view of a company's bundle of
products and services that are of value to the customer.
• Customer Segments: segment(s) of customers a company wants to
offer value to.
• A Channel is a means of getting in touch with the customer.
• The Relationship describes the kind of link a company establishes
between itself and the customer.
• The Key Activities describes the arrangement of activities and
resources that are necessary to create value for the customer. Key
Key Resources that can be deployed by the firm to create value
including those that form the basis for a competitive advantage
• Key Partnership is cooperative agreement between two or more
companies in order to create value for the customer
• The Cost Structure is the representation in money of all the
means employed in the business model.
• The Revenue Streams describes the way a company makes money
through a variety of revenue flows.
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40. BUSINESS MODEL
CANVAS
the
Osterwalder
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Serdar Temiz

41. building
blocks
Osterwalder
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42. 1. Customer Segments
2. Value proposition
3. Channels
4. Customer Relationships
5. Revenue Streams
6. Key Resource
7. Key Activities
8. Key Partnerships
9. Cost Structure
Serdar Temiz
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The 9 Building Blocs of Business Model Canvas

43. • A Value Proposition is an overall view of a company's bundle of
products and services that are of value to the customer.
• Customer Segments: segment(s) of customers a company wants to
offer value to.
• A Channel is a means of getting in touch with the customer.
• The Relationship describes the kind of link a company establishes
between itself and the customer.
• The Key Activities describes the arrangement of activities and
resources that are necessary to create value for the customer. Key
Key Resources that can be deployed by the firm to create value
including those that form the basis for a competitive advantage
• Key Partnership is cooperative agreement between two or more
companies in order to create value for the customer
• The Cost Structure is the representation in money of all the
means employed in the business model.
• The Revenue Streams describes the way a company makes money
through a variety of revenue flows.
2019-03-19 Serdar Temiz

44. Serdar Temiz
By Alexander Osterwalder & Yves Pigneur
2019-03-19

45. • For whom are we creating value?
• Who are our most important customers?
• Customer Segments
– Mass Market
– Niche market
– Segmented - related customer segments: frequent
flier program, bank customers with big assets
– Diversified: Unrelated customer segments: Amazon
– Multi sided: free newspaper-readers and advertisers
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1. Customer Segment

46. Find a Customer-I
• Why?
• Who is your customer?
Grave, School, hospital, apotek, free
newspaper
• Can everyone be your customer?
• "people who want to buy a flat,"
• "anyone needs job"
• “Everyone who goes to university”
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47. Find a Customer-II
• Find a customer for solving a pain
• Use the Customer Profile
• Describe who is making purchasing
decision?
IT ? Operations Group? Management?
• Make sure they are happy
• Market is important but
-do not only think market
• Billion dollar market does not start in few
minutes
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48. Q’s for Customer
IDENTIFIABLE – what distinguishes them?
MEASURABLE – how many belong to your
target segment?
REACHABLE – how to reach, communicate
with each segment
WILLING– do they want it?
ABLE– they want but can they afford it?
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49. Q’s for Customer - Macro Level
• Population size
• Population character
• Disposable income levels
• Educational background
• Primary languages
• Infrastructure
• Regulations
• Political affiliation
• And so on…
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50. • Customer is important but you can not give all they
want
• Learn to stay No,
• Learn to focus
• Learn to ”change and adopt”
• They may not know/ may not able to explain
what they want: buying process is mysterious
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Keep in Mind Paradox

51. • A bundle that meets that meets a customer's needs or solve
his/her problem.
• Benefits can be tangible and intangible
• Reason why customers pick one business or another.
• Can be
– innovative, new disruptive offer.
– similar to existing offers but just added feature or
attribute in some sort of way.
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2. Value Proposition

52. Some Elements that may add to value
• newness
• customization
• getting job done
• support
• price
• design
• status/ brand
• Accessibility
• risk deduction
• usability
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53. • What pain do we solve for customer?
• What do we deliver for customer?
• What value do we develop for customer
• Which need of customer do we satisfy?
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2. Value Proposition – Q’s to Answer

54. By Alexander Osterwalder & Yves Pigneur
Serdar Temiz
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55. •Awareness of products
and services, Evaluation
of value proposition,
Purchase, Delivery,
After sales
•Direct: Brick and mortal
stores, websales, sales
force
•Indirect: wholesales
partner stores,
Value
Proposition
Customer
Segment
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3. Channels

56. Serdar Temiz
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4. Customer Relations
• Customer
acquisition
• Customer
retention
• Boosting sales
(upselling)
Value
Proposition
Customer
Segment

57. 4. Customer Relationships
• What type of relationship does
each of our Customer Segments
expect us to establish and
maintain with them?
• Which ones have we established?
• How costly are they?
• How are they integrated with the
rest of our business model?
Serdar Temiz
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58. Example Customer Services
Can you give some example
companies?
• (Dedicated)Personal assistance
• Self Service
• Community
• Co-creation
• Automated
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59. Value
Proposition
Customer
Segment
• Asset sale
• Usage fee: use more, pay more
• Subscription: monthly, yearly
• Leasing/Lending/Renting
• Licensing: patents, license fee
• Brokerage fees
• Advertising
Fixed
pricing
Dynamic
pricing
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Channels
5. Revenue Streams

60. Fixed
pricing
Dynamic
pricing
• List price
• Product feature
dependent
• Customer segment
dependent
• Volume dependent
• Yield management : hotels,
airlines
• Real-time-market :supply and
demand
• Auctions Price
• Negotiation
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61. Value
Proposition
Physical
Financial
Intellectual
Human
Key resources can be owned or leased by the company or
acquired from key partners.
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6. Key Resources

62. 6. Key Resources
• What Key Resources do our Value
Propositions require?
• Our Distribution Channels?
• Customer Relationships?
• Revenue Streams?
• What physical resources,
intellectual, human, financial
resources do we have?
Serdar Temiz
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63. • What Key Activities do our Value Propositions
require?
• Our Distribution Channels?
• Customer Relationships?
• Revenue streams?
• Production- Microsoft
• Network/Platform: Facebook, ebay, Visa
Serdar Temiz
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7. Key Activities

64. Why Partnership?
– reduce cost,
– Reduction of risk and uncertainty: Web standards
– Acquisition of particular resources and activities: Nokia Windows,
HTC phones
• Strategic alliances between non-competitors
• Coopetition: strategic partnerships between competitors
• Joint ventures to develop new businesses
• Buyer-supplier relationships to assure reliable supplies
Serdar Temiz
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8. Key Partnerships

65. 8. Key Partnerships -II
• Who are our Key Partners?
• Who are our Key suppliers?
• Which Key Resources are we acquiring
from partners?
• Which Key Activities do partners
perform?
Serdar Temiz
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66. 9. Cost Structure-I
• Business model Cost Structures:
cost-driven
minimizing
costs
wherever
possible value-driven
Premium
Value
Propositions
and a high
degree of
personalized
service
Serdar Temiz
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67. Cost Structure Characteristics:
• Minimizing costs wherever possible
Fixed costs
• Premium Value Propositions and a high
degree of personalized service
Variable costs
• Average cost per unit to fall as output
risesThe same Distribution
Economies of scale
• Channels for different products and
servicesmay support multiple products.
Economy of Scope
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9. Cost Structure -1

68. Serdar Temiz
2019-03-19
By Alexander Osterwalder & Yves Pigneur

69. Keep in Mind !
Serdar Temiz
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70. Serdar Temiz
2019-03-19
By Alexander Osterwalder & Yves Pigneur
Colors are
important!
!!!

71. By Alexander Osterwalder & Yves Pigneur
Serdar Temiz
2019-03-19
Iteration
is
impotant!

72. By Alexander Osterwalder & Yves Pigneur
Serdar Temiz
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73. So what?
• The business model is just the starting point
• Serves different roles
• Its about dealing with opportunities and
uncertainties
• Business model design – easier said than done
• Its not only about the founder – it’s a
collective endeavor
• It’s both about planning and execution
• What company are you creating?
– What resources do you possess?
– Who are your stakeholders?
2019-03-19 Serdar Temiz

74. http://www.esbri.se/forelasning.asp?link=visaforelas&id=241
2019-03-19 Serdar Temiz
MUST WATCH
Serdar Temiz
twitter: @serdar_temiz
www.serdartemiz.com
temiz@kth.se
hi@serdartemiz.com

75. This training material is part of the FogGuru project that has received funding from the European Union’s Horizon
2020 research and innovation programme under the Marie Skłodowska-Curie grant agreement No 765452. The
information and views set out in this material are those of the author(s) and do not necessarily reflect the official
opinion of the European Union. Neither the European Union institutions and bodies nor any person acting on their
behalf may be held responsible for the use which may be made of the information contained therein.