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Business Model Competition october 24 final

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Business Model Competition JBMC-Nigata

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Business Model Competition october 24 final

  1. 1. Business Model Competition JBMC-Nigata October 24,2015 Waseda University International University of Japan Dr. Takeru Ohe 2015/10/26 (C) Takeru Ohe 1
  2. 2. Dr. Takeru Ohe Chairman, JBMC Executive Committee  He sits on the boards of Cognex Japan K.K., a machine vision manufacturer, and My Vision, a nonprofit organization specializing in entrepreneurship education for youth.  He taught Entrepreneurship at Waseda University, Business School and served as managing director of the Waseda University Incubation Center. Currently he serves as an advisor to Research Promotion Division of Waseda University and visiting professor at the International University of Japan.  Ph.D. in Experimental Physics from the University of Maryland and an MBA from Columbia University Graduate School of Business.  Dr. Ohe has initiated various successful programs: “Born ASEAN” program, Consulting Based Learning for ASEAN SMEs program, Teaching Incubation Center program at Waseda University. Waseda Venture Kids program and etc. 2015/10/26 (C) Takeru Ohe 2
  3. 3. Table of Contents 1. Business Model Competition is not a Business Plan Contest 2. Uncertainty and Experiment 3. Judging criteria 4. Preparation for BMC 5. JBMC 2015/10/26 (C) Takeru Ohe 3
  4. 4. BUSINESS MODEL COMPETITION IS DIFFERENT FROM BUSINESS PLAN CONTEST 2015/10/26 (C) Takeru Ohe 4
  5. 5. The IBMC is not a business plan competition. • Over 85 percent of new businesses fail within a few years, often because they try to plan their way to success. • The International Business Model Competition represents a radical departure from the past and the crest of a new paradigm in entrepreneurship. • The IBMC is not a business plan competition. 2015/10/26 (C) Takeru Ohe 5
  6. 6. Business Model Competition evaluates the process of checking of assumptions Business Model Competition (BMC) • The objective is to help start the business • Most of time spent meeting potential customers or searching markets – Customer segmentation – Value propositions – The most important thing is revenues • The simple profit statement is good enough Business Plan Contest (BPC) • The objective is to write an elaborate and logical plan • Most of hours are spent in front of the PC to get secondary data • A lot of time is spent to prepare financial statements (C) Takeru Ohe 62015/10/26
  7. 7. The IBMC rewards students for: 1. Identifying and tracking key business model hypotheses (use the Business Model Canvas) 2. Testing and validating those hypotheses with customers (get outside the building) 3. Pivoting and iterating their business model based on customer interactions • Submissions for the competition focus on the process and learning a team goes through as they test their unexamined hypotheses in the field and develop validated business models. • The goal is validated learning about the business model assumptions and failing early is a success compared to failing late. 2015/10/26 (C) Takeru Ohe 7
  8. 8. UNCERTAINTY AND EXPERIMENT 2015/10/26 (C) Takeru Ohe 8
  9. 9. How to compete: the wave of transient advantage of uncertainty world R e t u r n 2015/10/26 (C) Takeru Ohe 9 Source: The End of Competitive Advantage (P13) Rita Gunther McGrath, HBRP 2012 Launch Ramp up Exploit Reconfigure Disengage
  10. 10. Uncertainty for startups • There is uncertainty for any business due to being in the uncertain world. • There is additional uncertainty for any new business since there are many unknown for startups. • To promote a new business, you must deal with uncertainty and take advantage of the uncertain environment. 2015/10/26 (C) Takeru Ohe 10
  11. 11. Experimental Methodology for Business Management • As experimental physics has led to the advancement of physics, "experimental management” can lead to the development of Business management. • "Experimental management" which was developed for new business must be applied at once to the main lines of the company due to uncertainty in the ultra-competitive world. 2015/10/26 (C) Takeru Ohe 11
  12. 12. Experimenting Five skills of disruptive innovators New ideas are often created during verifying ideas, business concepts and business models through experiments and prototypes. 2015/10/26 (C) Takeru Ohe 12
  13. 13. JUDGING CRITERIA OF BMC 2015/10/26 (C) Takeru Ohe 13
  14. 14. JUDGING CRITERIA 1. Did the team use the Business Model Canvas or similar tool to identify and track hypotheses? 2. Did the team clearly state their hypotheses (assumptions)? 3. Did the team identify the most crucial assumptions to test first (the ones that will kill their business)? 4. Did the team design, low cost, rapid, but reliable tests of these hypotheses? 5. Did the team conduct the tests in a reliable manner? a. Number of tests - # should be adjusted for industry, product type (web vs physical product), and business type (B2B vs B2C) b. Quality of tests - interviews are high quality, surveys & focus groups are much lower quality (you don’t know which questions to ask) unless interviews have been conducted first 2015/10/26 (C) Takeru Ohe 14
  15. 15. • 6. Did the team clearly state what they learned, how it validated an assumption or not, and if that informed any changes/pivots? • 7. If changes were made, was the pivot the team made to support by evidence or did they fail to pivot when the evidence clearly stated it? • 8. If appropriate, has the team developed a prototype or minimum viable product (MVP)? Does the team understand the assumptions they are tested with a prototype or MVP? Is the prototype or MVP appropriate to answer those assumptions? – We want to reward prototypes over full products unless the product is the result of many prototypes tested with customers—in other words, we want to reward testing assumptions before building and building from prototypes up to products. We do not want to reward just building products too early based on untested assumptions. • 9. Is the team solving a significant problem (defined in terms of money or impact)?* • 10. Does the team have significant evidence that the solution is validated (includes letters of intent, purchase contracts, sales, and partners)?* – * these two criteria serve as tiebreakers – NOTE: Because web-based businesses are easier to test, these companies can often pivot faster. We tend to treat physical products, services, and web/software as slightly different categories in the judging, then pick the best of these categories to compete. 2015/10/26 (C) Takeru Ohe 15
  16. 16. 16 Resource: Business Model Generation, Osterwalder, A. & Pigneur, Y. (2010) 4. Customer Relationshi ps 3. Channels 2. Value Proposition s 7. Key Activities 6. Key Resources (Intellectual property, Assets) 8. Key Partners 5. Revenue Stream 9. Cost structure Business Model Canvas 2015/10/26 (C) Dr. Takeru Ohe 1. Customer Segments
  17. 17. HOW TO PREPARE FOR THE COMPETITION 2013 BEST BUSINESS MODEL “OWLET” SOURCE: VALUE PROPOSITION DESIGN, OSTERWALDER, A. & ETC., WILEY (2014) The owlet is a wireless monitor measuring your baby's heart rate and oxygen. The data is sent to your smartphone and will alert you if there's an emergency. 2015/10/26 (C) Takeru Ohe 17
  18. 18. Owlet; constant progress with systematic design and testing • Wireless monitoring of babies' blood oxygen, heart rate and sleep data. • The owlet is a smartphone compatible baby monitor. But for added safety and security, Owlet is designed to function independently of your Apple device. The Smart Sock and the Base Station connects through low power Bluetooth. If your iOS device dies, or home internet goes out, your Base Station will still alert you if your baby stops breathing. For convenience, the Base Station will upload your infant’s heart rate and oxygen levels to the cloud. You, and anyone with permission, can view your baby’s levels from anywhere in your home, Grandma’s house, or even the office. 2015/10/26 (C) Takeru Ohe 18
  19. 19. 19 Source: Value Proposition Design, Osterwalder, A. & etc, Wiley (2014) 4. Customer Relationships 3. Channels 2. Value Propositions 7. Key Activities 6. Key Resources (Intellectual property, Assets) 8. Key Partners 5. Revenue Stream9. Cost structure Owlet Business Model: version 0 1. Initial Idea: an opportunity (Monitoring pulse oximetry could be easier without the cord between the device and the monitor display) 2015/10/26 (C) Takeru Ohe 1. Customer Segments Pulse oximetry monitor Nurses Hospitals Hospitals Salesmen
  20. 20. Test 1A Nurse Interviews Items 1 Hypothesis Wireless pulse oximetry is more convenient 2 Metric Percentage of positive feedback 3 Test Interview nurses 4 Data Of 58 interviews, 93 percent prefer the wireless monitoring 5 Validate results Validated 6 Period and cost 1 week, $0 2015/10/26 (C) Takeru Ohe 20 Source: Value Proposition Design, Osterwalder, A. & etc, Wiley (2014)
  21. 21. Test 1B Hospital Administrator Interviews Items 1 Hypothesis Wireless pulse oximetry is more convenient 2 Metric Percentage of positive feedback 3 Test Interview hospital feedback 4 Data 0 percent ready to pay more for wireless. Ease of use is not a pain, it not cost effective. 5 Validate results Un-validated 6 Period and cost 1 week, $0 2015/10/26 (C) Takeru Ohe 21 Source: Value Proposition Design, Osterwalder, A. & etc, Wiley (2014)
  22. 22. 22 Resource: Value Proposition Design, Osterwalder, A. & etc., Wiley (2014) 4. Customer Relationships 3. Channels 2. Value Propositions7. Key Activities 6. Key Resources (Intellectual property, Assets) 8. Key Partners 5. Revenue Stream9. Cost structure Owlet Business Model: version 2 Pivot: Change the customer segment from nurses and hospitals to worried parents 2015/10/26 (C) Takeru Ohe 1. Customer Segments 7. Key Activities 8. Key Partners Baby alarm Parents Baby store < $200 price
  23. 23. Test 2 Parent Interviews Items 1 Hypothesis Parents are ready to adopt and buy a wireless baby alarm 2 Metric Percentage of adopting parents 3 Test Interview months 4 Data Of 105 interviews, 96 percent adopt the wireless monitoring “Awesome. I want to buy now!” 5 Validate results Validated 6 Period and cost 2015/10/26 (C) Takeru Ohe 23 Source: Value Proposition Design, Osterwalder, A. & etc, Wiley (2014)
  24. 24. Test 3 MVP Landing page (minimum viable product) Items 1 Hypothesis A smart sock is convenient and easy to use for monitoring 2 Metric Number of positive comments 3 Test An MVP, with a video an a website 4 Data 17,000 views, 5500 shares of facebook, 500 positive comments by parents, distributors, and research organizations 5 Validate results Validated 6 Period and cost 2 week, $320 2015/10/26 (C) Takeru Ohe 24 Source: Value Proposition Design, Osterwalder, A. & etc, Wiley (2014)
  25. 25. Test 4 A/B Price test Items 1 Hypothesis Rental versus sale at $200+ sale price 2 Metric Percentage for a sale price 3 Test A/B testing, 3 rounds on the website 4 Data 1170 people tested, $299 the best price 5 Validate results Validated 6 Period and cost 8 weeks, $30 2015/10/26 (C) Takeru Ohe 25 Source: Value Proposition Design, Osterwalder, A. & etc, Wiley (2014)
  26. 26. 26 Source: Value Proposition Design, Osterwalder, A. & etc, Wiley (2014) 4. Customer Relationships 3. Channels 2. Value Propositions7. Key Activities 6. Key Resources (Intellectual property, Assets) 8. Key Partners 5. Revenue Stream9. Cost structure Owlet Business Model: version 3 With a more minimal, less risky product, and infant health tracker (heart rate, oxygen levels, and sleep patterns), but without alarm, for another customer segment; the less worried parents 2015/10/26 (C) Takeru Ohe 1. Customer Segments 7. Key Activities 8. Key Partners Baby alarm FDA clearance <$200 price Infant health tracker Baby stores Worried parents Less worried parents Baby stores
  27. 27. Test 5 Interview/Proposition: Owlet Challenge Items 1 Hypothesis Less worried parents are ready to adopt and buy a wireless baby health tracker, without alarm 2 Metric Percentage of parents adopting the no-alarm tracker 3 Test Interview at retail locations, having to choose between Owlet tracker and other similar systems (video, sound, and movement) 4 Data Of 81 people interviewed, 20%adopted the Owlet tracker 5 Validate results Validated 6 Period and cost 3 weeks, $0 2015/10/26 (C) Takeru Ohe 27 Source: Value Proposition Design, Osterwalder, A. & etc, Wiley (2014)
  28. 28. Testing step-by-Step • Your customers are the judge, jury, and executioner of your value proposition, so get outside of the building and test your ideas with the customer deployment and lean start- up process. Make sure you start with quick and cheap experiments to test the assumption underlying your ideas when uncertainty is at its maxim. 2015/10/26 (C) Takeru Ohe 28
  29. 29. JBMC NIGATA, JBMC AND IBMC 2015/10/26 (C) Takeru Ohe 29
  30. 30. IBMC Founders, Host Schools, Judges The IBMC is currently co-hosted by Brigham Young University, Harvard University, and Stanford University. 2013 Host - Harvard University 2014 Host - Brigham Young University 2015 Host - Brigham Young University 2016 Host – Stanford University (Plan) The Founders: Nathan Furr (Ph.D., Stanford; Entrepreneurship Professor, BYU) Steve Blank (Entrepreneurship Professor, UC Berkley; Lecturer, Stanford) John Richards (Entrepreneurship Professor, BYU) Scott Petersen (Director, Center for Entrepreneurship & Technology, BYU) The judges of the 2015 IBMC Prof. Steve Blank (Stanford University) Prof. Nathan Furr (Bringham & Young University) Dr. Alexander Osterwalder etc. 2015/10/26 (C) Takeru Ohe 30
  31. 31. The Japan Business Model Competition (JBMC) • JBMC was founded in 2013 by – Prof. Takeru Ohe (Waseda University adviser, IUJ ), – Dr. Makoto Sarata (ASTEM) – Mr. Satoshi Okuda (Primestyle) in 2013. • JBMC is one of feeder competitions for IBMC, and the winner of JBMC automatically will be sent to the IBMC. • The 3rd Japan Business Model Competition will be held on February 27 and 28. 2016 in Tokyo. 2015/10/26 (C) Takeru Ohe 31
  32. 32. 2nd JBMC Finalists (2015 March) 2015/10/26 (C) Takeru Ohe 32 Business Model University 3 "Dream Pharos" Cloud notebook between parents and nursery Japan Advanced Institute of Science and Technology "Next .I " Decoration kit for lunch Keio University Tailored health analysis system Tokyo University "Dream Come True" new SNS Keio University Japanese Language and culture lessons through Youtube Waseda University 1 Log System for low back pain Kyoto University Customer service system for beauty salons Tokyo University 2 Total hair care system based on gene analysis Tokyo University Assist device system with dispensable actuator Waseda University Social "fitting room" platform International University of Japan
  33. 33. Ministry of Economy, Trade and Industry "Innovator nurturing world-class? 20 people will be dispatched to Silicon Valley Dispatch • Toshiba – Service to create a nail that was decorated on the basis of the 3D scan of nails. • Nikon Corporation – Smartphone application to help select vegetables that seen when the vegetables of nutrients and freshness take pictures • FutureArchitect – Clothing rental services for visiting Japan, foreigners 2015/10/26 (C) Takeru Ohe 33
  34. 34. References 2015/10/26 (C) Takeru Ohe 34
  35. 35. Contacts 2015/10/26 (C) Takeru Ohe 35 Home Page:japan-bmc.com/ Facebook: https://www.facebook.com/japan.bmc Mail: admin@japan-bmc.com IBMC: http://www.businessmodelcompetition.com/

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