From a workshop on The Business Model Canvas and Social Impact I delivered at The Hub LA.

1. Paul Orlando
@porlando
paul@StartupsUnplugged.com
The Business Model Canvas
(And Social Impact)
At The Hub LA

2. 3-month accelerator for
Mobile Startups
Lean Startup Advisory
StartupsUnplugged.com/advisory AcceleratorHK.com
Other projects:
Startup Sacrilege for the Underdog Entrepreneur
WeAreHKtech list
MVP Cards
Startup Hug
Persuade the parents project
early success
success
so-so
fail

3. What causes the most difficulty
for early-stage businesses?
…How can we solve this?

4. A way forward.
The MVP. Business Model Canvas. Case Studies.
A way backward.
Reading tech news.
Loving your ideas.
Being a know-it-all.

5. Concept/
Business Plan
Product
Development
Alpha/Beta
Test
Launch/1st
Ship
Product Introduction Model
Customer Development Model
Company
Building
Customer
Discovery
Customer
Validation
Customer
Creation
Pivot

6. Concept/
Business Plan
Product
Development
Alpha/Beta
Test
Launch/1st
Ship
Product Introduction Model
Customer Development Model
Company
Building
Customer
Discovery
Customer
Validation
Customer
Creation
Pivot

7. Stop selling, start listening
Test your hypotheses
Continuous discovery
Done by founders
Customer Development Model
Customer
Discovery
Customer
Validation
Company
Building
Customer
Creation
Pivot

8. Solve
Problems
Satisfy
Needs
Fuel
Addictions

9. Ideal Customers
1. They have a problem
2. Are aware of having a problem
3. Have been actively searching for a solution
4. Have hacked together a solution
5. Have or can acquire a budget

10. ...describes how an organization creates,
delivers, and captures value...
...describes how your company makes money...
...describes how you have impact...
(Use the Minimum Viable Product to test your
business model assumptions.)
The Business Model...

11. customer
segments
key partners
cost structure revenue
streams
channels
customer
relationships
key activities
key
resources
value proposition

12. Reintroducing The MVP
"The minimum viable product is that
version of a new product which allows a
team to collect the maximum amount of
validated learning about customers with
the least effort.“ -- Eric Ries
What They Say…

13. Reintroducing The MVP
“Our MVP is the crappy version of what
we’re going to build later.“
-- most startups talking about MVPs
What We Hear…

14. Reintroducing The MVP
“blah blah blah get validated learning
blah blah blah use least effort and test
your hypotheses.” -- me
New Translation…

15. MVP technique What it is
In-person
Interviews
Talk to people to learn about them
and their problems
Landing Page /
Adwords
Use a description to test actions from
lots of people
Mockup /
Wireframe
Paper or digital non-functioning
iterations to test reactions
“Parasite” Ride on top of an existing network to
speed up data collection
Concierge People do work of not yet built
system
Video Show what it’s like to use it
Prototype Actually build a basic version

16. customer
segments
key partners
cost structure revenue
streams
channels
customer
relationships
key activities
key
resources
value proposition

17. CUSTOMER SEGMENTS
For whom do we create value?
Who are our most important customers?
Which jobs do they really want to get done?
(Do we like this customer segment?)

18. VALUE PROPOSITIONS
What value do we deliver to the customer?
Which one of our customer’s problems do we help solve?
What bundles of products and services do we offer to
each Customer Segment?
Which customer needs do we satisfy?
Do they care?
(Prepare to be surprised by what you learn.)

19. CHANNELS
Through which Channels do our Customer Segments
want to be reached?
How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?
(This is often a problem section.)

20. CUSTOMER RELATIONSHIPS
What type of relationship does each of our Customer
Segments expect us to establish and maintain with
them? Personal? Automated? Acquisitive? Retentive?
Which ones have we established?
How are they integrated with the rest of our business
model?
How costly are they?

21. REVENUE STREAMS
For what value are our customers really willing to pay?
For what do they currently pay?
How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to
overall revenues?
Are you generating transactional or recurring revenues?

22. KEY RESOURCES
What Key Resources do our Value Propositions require?
Our Distribution Channels?
Customer Relationships?
Revenue Streams?

23. KEY ACTIVITIES
What Key Activities do our Value Propositions require?
Our Distribution Channels?
Customer Relationships?
Revenue streams?

24. KEY PARTNERS
Who are our Key Partners?
Who are our Key suppliers?
Which Key Resources are we acquiring from partners?
Which Key Activities do partners perform?
Who do you need to rely on?

25. COST STRUCTURE
What is the resulting cost structure?
Which key elements drive your costs?
What are the most important costs inherent in our
business model?
Which Key Resources are most expensive?
Which Key Activities are most expensive?

26. Channels
Customer
Relationships
Key
Resources
Key
Activities
RevenueCosts
Customer
Segments
Key
Partners
Value
Proposition
Business Model Canvas
Test:
• Problem
• Customer
• User
• Payer
Test:
• Demand
Creation
Test:
• Channel
Test:
• Product
• Market Type
• Competition
Test:
• Pricing Model / Pricing

27. Business Model
Canvas (BMC) section
What goes wrong
Customer Segments Sticking with the same segment,
unwillingness to test with the segment,
not liking the segment,
Value Proposition People don’t care about what you’re
doing, not understanding what people
value,
Channels Underestimate how difficult it is to reach
people, or the costs,
Customer
Relationships
Inability to serve these relationships,
Revenue Inability to make enough to be self-
sustaining,
Overall Unwillingness to test hypotheses, not
returning to the BMC at least weekly,

28. Describe business models for...
E-commerce service, Freemium service, Media site,
User Generated Content, Two-sided market, SaaS /
PaaS
Barbershop, restaurant, co-work space, art gallery,
tourist service, tutoring,
[fair trade coffee, Tom’s Shoes]

29. A way forward.
Track assumptions, test and use the BMC regularly.
Use the BMC to help you innovate.
Learn from others (case studies).
Figure out which metrics matter for you.
Start with Customer Segment, Value Proposition
sections.
The inability to reach your customer (Channels) is a
hidden problem for many.
Be willing to kill your ideas.
You know nothing. 

30. Next Steps for You
Write out your business model on the BMC
Form hypotheses for each part of your business model
- What is the test for whether your business is worth pursuing?
- What are the tests for each of your hypotheses?
- What is your pass/fail for the test?
Go out and test, change assumptions and repeat!

31. Paul Orlando
@porlando
paul.orlando@gmail.com