Delivered during World Bank's Mobile Startup Camp (Washington, D.C.) in November 2013 (http://www.infodev.org/mobilestartupcamp). The first part of the presentation provides some key insights from VisionMobile's Developer Economics 2013 report. The second part is an introduction to the hands-on workshop on business model design tools such as, stakeholder diagrams and the value proposition canvas.

1. Monetization
Where is the money?
George Voulgaris, Ph.D.
Business Partner, VisionMobile
Director, Falling Elephant

2. Outline
¤ Insights from DeveloperEconomics.com
¤ Dissecting Monetization
¤ Determining Value

3. Aims
¤ To help you make wiser decisions regarding your
monetization strategy

4. Insights from
Developer Economics 2013
Developereconomics.com

6. Big regional differences

7. iOS still leads the game

8. More platforms more money

9. App Stores is not the answer

10. High pay-off revenue models are tough

11. Grow by expansion

12. App Categories with highest return
Games
(not highest but massive market share)
Productivity Enterprise

13. Analytics and monitoring pay-off

14. Other interesting observations
¤ At least half of all downloads will never actually sign up and
start using the app
¤ Each and every step in your sign-in process is going to cut
about 25% of your potential users
¤ Apps using cross-promotion get on average 2-3x more
downloads and earn 40% more
¤ Even where push notifications are clearly not essential to the
app (less than half of users opt-in), the retention after 4
months of users who opt-in is ~80% greater than of those
who don’t.

15. Want more?
¤ Go to: developereconomics.com
¤ Many free data- and analysis-packed reports and
infographics

16. Dissecting Monetization

17. What is monetization?

18. What is monetization?
¤ Who is willing to pay me for a problem I solve?
¤ Why?
¤ How much?
¤ Over what period?

19. ¤ But business is not only about exchanging money…

20. Business is exchange of value
44
The Business Model Canvas
Cost
Structure
Key
Partners
Key
Resources
Channels
Key
Activities
Value
Proposition
Customer
Relationships
Customer
Segments
Revenue
Streams

21. Traditional Merchant model
company customer

22. Being replaced by asymmetric business
models in several sectors

23. Asymmetric business models:
two key concepts
¤ Network effects
¤ Core vs complements

24. Network effects
¤ "multi-sided platforms bring together two or more distinct
but interdependent groups of customers. Such platforms
are of value to one group of customers only if the other
groups of customers are also present.
The platform creates value by facilitating interactions
between the different groups.
A multi-sided platform grows in value to the extent that it
attracts more users, a phenomenon known as the
network effect."
Source http://BusinessModelGeneration.com

25. Network effects: positive feedback
AppStores

26. Network effects

27. Core vs Complement
Copyright VisionMobile 2007-10Page 2
Economics of complements
Microeconomics: Every product has substitutes and complements.
ComplementCore Product
Product demand increases
as complement prices decrease
A product consumed
with the main product

28. Core vs Complement
Copyright VisionMobile 2007-10Page 3
How Google uses complements
Google ComplementsGoogle Core Product
On-line advertising mobile networks handsets browsers
Commoditisation of mobile
increases demand
for Google products
net
neutrality
open source
OS
Chrome,
WebKit
Closed
ad network

29. Core business
¤ Your core business will be defined by your vision, aims,
market, know-how, competition etc.

30. Monetization Considerations
In order to plan a successful monetization strategy you need
to:
¤ Clearly map value exchange(s)…
¤ …across all stakeholders/ecosystem (*)
¤ Test the correct parameters for sustainability / growth
¤ A good pricing strategy

31. Finding out who and why is going
to pay
Tools of the trade

32. Mapping the stakeholders and value
exchange
Business Model Kit Source http://boardofinnovation.com/
Product
Money
Less Money
Experience
Right
Data
reputation
Credits
Service
Exposure
Consumer
Company
Government
Supplier
Non-profit
My organization
Example
Product
Money
Less Money
Experience
Right
Data
reputation
Credits
Service
Exposure
Product
Money
Less Money
Experience
Right
Data
Service
Consumer
Company
Government
Supplier
Non-profit
My organization
Product
Money
Less Money
Experience
Right
Data
Service

33. Source and © http://boardofinnovation.com/

34. Source and © http://boardofinnovation.com/

35. Get your pencils out #1
¤ Draw a simple diagram of all stakeholders and value-
exchange within your company’s ecosystem

36. Conclusion
¤ Having a clear picture of value exchange between
stakeholders helps you identify opportunities for
monetization

37. De/Refining the value proposition
The Value Proposition Canvas
Gain Creators
Describe how your products and services create customer gains.
How do they create benefits your customer expects, desires or would be surprised
by, including functional utility, social gains, positive emotions, and cost savings?
Pain Relievers
Do they…
Create savings that make your customer happy?
(e.g. in terms of time, money and effort, …)
Produce outcomes your customer expects or that go
beyond their expectations?
(e.g. better quality level, more of something, less of something, …)
Copy or outperform current solutions that delight your
customer?
(e.g. regarding specific features, performance, quality, …)
Make your customer’s job or life easier?
(e.g. flatter learning curve, usability, accessibility, more services, lower
cost of ownership, …)
Create positive social consequences that your
customer desires?
(e.g. makes them look good, produces an increase in power, status, …)
Do something customers are looking for?
(e.g. good design, guarantees, specific or more features, …)
Fulfill something customers are dreaming about?
(e.g. help big achievements, produce big reliefs, …)
Produce positive outcomes matching your customers
success and failure criteria?
(e.g. better performance, lower cost, …)
Help make adoption easier?
(e.g. lower cost, less investments, lower risk, better quality,
performance, design, …)
Rank each gain your products and services create according to its relevance to your
customer. Is it substantial or insignificant? For each gain indicate how often it occurs.
Describe how your products and services alleviate customer pains. How do they
eliminate or reduce negative emotions, undesired costs and situations, and risks
your customer experiences or could experience before, during, and after getting
the job done?
Do they…
Produce savings?
(e.g. in terms of time, money, or efforts, …)
Make your customers feel better?
(e.g. kills frustrations, annoyances, things that give them a headache, …)
Fix underperforming solutions?
(e.g. new features, better performance, better quality, …)
Put an end to difficulties and challenges your
customers encounter?
(e.g. make things easier, helping them get done, eliminate resistance, …)
Wipe out negative social consequences your
customers encounter or fear?
(e.g. loss of face, power, trust, or status, …)
Eliminate risks your customers fear?
(e.g. financial, social, technical risks, or what could go awfully wrong, …)
Help your customers better sleep at night?
(e.g. by helping with big issues, diminishing concerns, or eliminating worries, …)
Limit or eradicate common mistakes customers make?
(e.g. usage mistakes, …)
Get rid of barriers that are keeping your customer
from adopting solutions?
(e.g. lower or no upfront investment costs, flatter learning curve, less
resistance to change, …)
Rank each pain your products and services kill according to their intensity
for your customer. Is it very intense or very light?
For each pain indicate how often it occurs. Risks your customer experiences or
could experience before, during, and after getting the job done?
Products & Services
List all the products and services your value proposition is built around.
Which products and services do you offer that help your customer get either a
functional, social, or emotional job done, or help him/her satisfy basic needs?
Which ancillary products and services help your customer perform the roles of:
Buyer
(e.g. products and services that help customers compare offers,
decide, buy, take delivery of a product or service, …)
Co-creator
(e.g. products and services that help customers co-design
solutions, otherwise contribute value to the solution, …)
Transferrer
(e.g. products and services that help customers dispose of
a product, transfer it to others, or resell, …)
Products and services may either by tangible (e.g. manufactured goods, face-to-
face customer service), digital/virtual (e.g. downloads, online recommendations),
intangible (e.g. copyrights, quality assurance), or financial (e.g. investment funds,
financing services).
Rank all products and services according to their importance to your customer.
Are they crucial or trivial to your customer?
Gains
Describe the benefits your customer expects, desires or would be surprised by.
This includes functional utility, social gains, positive emotions, and cost savings.
Pains
Customer Job(s)
Describe negative emotions, undesired costs and situations, and risks that your
customer experiences or could experience before, during, and after getting the
job done.
What does your customer find too costly?
(e.g. takes a lot of time, costs too much money, requires substantial efforts, …)
What makes your customer feel bad?
(e.g. frustrations, annoyances, things that give them a headache, …)
How are current solutions underperforming for
your customer?
(e.g. lack of features, performance, malfunctioning, …)
What are the main difficulties and challenges
your customer encounters?
(e.g. understanding how things work, difficulties getting things done,
resistance, …)
What negative social consequences does your
customer encounter or fear?
(e.g. loss of face, power, trust, or status, …)
What risks does your customer fear?
(e.g. financial, social, technical risks, or what could go awfully wrong, …)
What’s keeping your customer awake at night?
(e.g. big issues, concerns, worries, …)
What common mistakes does your customer make?
(e.g. usage mistakes, …)
What barriers are keeping your customer from
adopting solutions?
(e.g. upfront investment costs, learning curve, resistance to change, …)
Describe what a specific customer segment is trying to get done. It could be the tasks
they are trying to perform and complete, the problems they are trying to solve, or the
needs they are trying to satisfy.
What functional jobs are you helping your customer get done?
(e.g. perform or complete a specific task, solve a specific problem, …)
What social jobs are you helping your customer get done?
(e.g. trying to look good, gain power or status, …)
What emotional jobs are you helping your customer get done?
(e.g. esthetics, feel good, security, …)
What basic needs are you helping your customer satisfy?
(e.g. communication, sex, …)
Besides trying to get a core job done, your customer performs ancillary jobs in differ-
ent roles. Describe the jobs your customer is trying to get done as:
Buyer (e.g. trying to look good, gain power or status, …)
Co-creator (e.g. esthetics, feel good, security, …)
Transferrer (e.g. products and services that help customers dispose
of a product, transfer it to others, or resell, …)
Rank each job according to its significance to your customer. Is it
crucial or is it trivial? For each job indicate how often it occurs.
Outline in which specific context a job
is done, because that may impose
constraints or limitations.
(e.g. while driving, outside, …)
Which savings would make your customer happy?
(e.g. in terms of time, money and effort, …)
What outcomes does your customer expect and what
would go beyond his/her expectations?
(e.g. quality level, more of something, less of something, …)
How do current solutions delight your customer?
(e.g. specific features, performance, quality, …)
What would make your customer’s job or life easier?
(e.g. flatter learning curve, more services, lower cost of ownership, …)
What positive social consequences does your
customer desire?
(e.g. makes them look good, increase in power, status, …)
What are customers looking for?
(e.g. good design, guarantees, specific or more features, …)
What do customers dream about?
(e.g. big achievements, big reliefs, …)
How does your customer measure success and failure?
(e.g. performance, cost, …)
What would increase the likelihood of adopting a solution?
(e.g. lower cost, less investments, lower risk, better quality, performance,
design, …)
Rank each gain according to its relevance to
your customer.
Is it substantial or is it insignificant?
For each gain indicate how often it occurs.
Rank each pain according to the intensity it
represents for your customer.
Is it very intense or is it very light.?
For each pain indicate how often it occurs.
On:
Iteration:
Designed by:Designed for:
Day Month Year
No.
Customer Segment
www.businessmodelgeneration.com
Use in Conjunction with the Business Model Canvas Copyright of Business Model Foundry GmbH
Value Proposition
Create one for each Customer Segment in your Business Model
Source and © http://businessmodelalchemist.com/
http://BusinessModelGeneration.com

38. Value Proposition design is about
Product – Market fit
Image source and © http://businessmodelalchemist.com/

39. Value Proposition design
¤ Jobs
¤ Functional jobs (tasks)
¤ Social jobs (status / peer
recognition)
¤ Emotional jobs (feel good)
¤ Basic needs (communications)
¤ Pains
¤ Negative emotions (frustrations)
¤ Costs and situations (time, money,
mistakes, performance)
¤ Risks (Technical, Social, Financial)
¤ Gains
¤ Expected, desired and surprise
benefits
¤ Functional, Social, Emotion, Cost
Image source and © http://businessmodelalchemist.com/

40. JTBD #1
Source: twitter @susyjacks
Focus on the customer
Problem, not on your
solution

41. JTBD #2
¤ Scenario: a social entrepreneur has created a 2nd hand
toys and clothes-swapping store aiming to help families
that have financial difficulties.
¤ Can you identify some of the potential JTBDs for two
stakeholder groups: parents and donors.

42. Value Proposition design
¤ Product/Services:
¤ Tangible
¤ Digital/Virtual
¤ Intangible (quality, copyrights)
¤ Pain relievers
¤ How does your solution
eliminates the customer pains?
¤ Gain creators
¤ How does your solution create
expected, desirable, surprise
benefits?
Image source and © http://businessmodelalchemist.com/

43. Get your pencils out #2
¤ Draw a Value Proposition Canvas for your primary
customer and core solution

44. ¤ Product/Services:
¤ Tangible
¤ Digital/Virtual
¤ Intangible (quality, copyrights)
¤ Pain relievers
¤ How does your solution
eliminates the customer pains?
¤ Gain creators
¤ How does your solution create
expected, desirable, surprise
benefits?
¤ Jobs
¤ Functional jobs (tasks)
¤ Social jobs (status / peer
recognition)
¤ Emotional jobs (feel good)
¤ Basic needs (communications)
¤ Pains
¤ Negative emotions (frustrations)
¤ Costs and situations (time, money,
mistakes, performance)
¤ Risks (Technical, Social, Financial)
¤ Gains
¤ Expected, desired and surprise
benefits
¤ Functional, Social, Emotion, Cost

45. Pivoting
Remember to compare value propositions by using the same variables
e.g. price, risk, quality

46. Pivoting; comparing value
propositions
Observe, Ask, ValidateDesign, Compare,
Iterate

47. Conclusion

48. Closing remarks
¤ Monetization strategy needs a continuous out-of-the-box
view of your stakeholders and value exchanges.
¤ The one with biggest pain and pocket is usually your
primary customer.
¤ Monetization strategy involves:
¤ Identify and quantify the value exchange between all
stakeholders
¤ Identify a sustainability/growth strategy that will ensure your
income exceeds your burn rate (at a minimum…)

49. Important topics not covered
¤ Pricing (see Further Reading) … but start high!
¤ Metrics and Analytics (see Further Reading); Vanity Metrics;
Growth Strategies & Hacking;
¤ Value Proposition design can provide valuable input to your
marketing strategy (subject of other talk)
¤ Get familiar with decision making & brainstorming
techniques and tools. It will pay off.
Fall in love with post-it notes vs notepads when constructing
any form of canvas ;)

50. Further reading
(disclaimer: I am not affiliated with nor endorse any of the following paid books or products, except
VisionMobile’s Developer Economics)
¤ http://Developerconomics.com
¤ Guide to growth hacking
http://www.quicksprout.com/the-definitive-guide-to-growth-hacking/
¤ Great article series on pricing an app:
http://www.developereconomics.com/how-to-price-your-app-by-michael-jurewitz/
¤ List of several revenue models, good for inspiration:
https://hackpad.com/Web-and-Mobile-Revenue-Models-Ch2paBpUyIU
¤ Dave McClure’s Pirate Metrics:
http://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version
http://vimeo.com/26277733
¤ On MVPs: Noah Kagan’s How to Create a Million-Dollar Business This Weekend:
http://www.fourhourworkweek.com/blog/2011/09/24/how-to-create-a-million-dollar-business-this-
weekend-examples-appsumo-mint-chihuahuas/
¤ “Lean Analytics”, Alistair Croll, Benjamin Yoskovitz (2013) O’Reilly
¤ “Four steps to Epiphany: 2nd edition” Steve Blank (2013) K&S Ranch
¤ “Gamestorming: A Playbook for Innovators, Rulebreakers, and Changemakers”, Dave Gray, Sunni Brown,
James Macanufo (2010) O’Reilly
¤ “The Decision Book: Fifty Models for Strategic Thinking” Roman Tschäppeler, Mikael Krogerus, Jenny
Piening (2011) Profile Books
¤ https://www.udemy.com/startup-how-to-7-steps-to-creating-a-successful-product/?
couponCode=LEANFTW
¤ http://Custdev.com

51. Thanks! Keep in touch
George Voulgaris, Ph.D.
george@visionmobile.com
Business Partner, VisionMobile
george@fallingelephant.com
Director, Falling Elephant
@gevou
linkedin.com/in/voulgaris