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MERLIN H2020 - Workshop #1 "Business Model Canvas"

Materials of the first MERLIN ( workshop, delivered in June'18. MERLIN will support market-oriented researchers, SMEs and startups across Europe, to consider the full potential of their research and to shape ideas and outputs into innovations to be ready for market validation and commercialisation, by using modern needs-first, market-led methodologies and offering free training workshops and meetup in 7 European countries.
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MERLIN H2020 - Workshop #1 "Business Model Canvas"

  1. 1. H2020 GA #780460 BUSINESS MODEL CANVAS LECTOR’S NAME CITY DATE Helping today’s researchers create tomorrow’s enterprises This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 780460
  2. 2. H2020 GA #780460 Rules for the workshop  No question is a silly question 2  What is said in the room stays in the room  Support and challenge each other
  3. 3. H2020 GA #780460 General information  Workshop length – 4 hours 3  Coffee break – 20 minutes  Slide availability
  4. 4. H2020 GA #780460 About MERLIN project MERLIN project aims to stimulate the interest in the creation of startups, spin-offs and licensing agreements among ICT researchers, providing them with the business skills that would help them to commercialize their research findings and successfully introduce them to the market, and introducing them to their local and European entrepreneurial ecosystems 4 Organization of more than 40 practical thematic workshops in several European cities, including Cambridge, Madrid, Poznan, Vilnius, Berlin, Warsaw, Bucharest, Tallinn Participation in 5 international conferences, organizing workshops and forums Organization of 8 meetups with potential customers, commercial partners, and investors Preparation of 4 webinars on SME growth and PPP business models
  5. 5. H2020 GA #780460 How similar are we? 5
  6. 6. H2020 GA #780460 Agenda Business model canvas - introduction Customer segments Value propositions Channels Customer relationships 6 Revenue streams Key resources Key activities Key partnerships Cost structure Revenue streams
  7. 7. H2020 GA #780460 What is Business Model Canvas? 7 A business model describes the rationale of how an organization creates, delivers and captures value A business model canvas is a tool to map existing business models, improve them and invent new ones
  8. 8. H2020 GA #780460 The purpose of Business Model Canvas 8 A BMC will lead to insights about the customers you serve, what value propositions are offered through what channels and how your company makes money Key benefits of BMC include: Targets needsFocused Scientific framework that works Reduce failure risk Clear and concise Front stage Back stage
  9. 9. H2020 GA #780460 Customer segments 9 Customer Segments Building Block defines the different groups of people an organization aims to reach and serve An organization must make a conscious decision about which segments to serve and which segments to ignore For whom are we creating value? Who are our most important customers?
  10. 10. H2020 GA #780460 Customer segments examples 10 • Internet users • Advertisers, marketers • Developers Facebook • Advertisers • Subscribers • Free listeners Spotify • Environmentalists • Above average income individuals Tesla
  11. 11. H2020 GA #780460 Value propositions 11 Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment Value proposition solves a customer problem or satisfies a need Value proposition is a bundle of benefits that a company offers customers What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? Which customer needs are we satisfying? What bundles of products and services are we offering to each customer segment?
  12. 12. H2020 GA #780460 What contributes to value creation? 12 Newness Performance Customization ”Getting the job done” Cost reduction Price Examples of elements that contribute to value creation: Design Risk reduction Convenience / Usability Brand / Status Accessibility
  13. 13. H2020 GA #780460 Customer relationships 13 The Customer Relationship Building Block describes the types of relationships a company establishes with specific Customer Segments 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?
  14. 14. H2020 GA #780460 How to be appealing to customers? 14 • Same-side network effects • Cross-side network effects Facebook • Healthy options • Nutritional information • Kids menu • Kids play room McDonald’s • Drivers, riders - safe, secure, fair • Public - communal/social footprint Uber
  15. 15. H2020 GA #780460 Channels 15 The Channels Building Block describes how company communicates with and reaches its Customer Segments to deliver a Value Proposition Through which Channels do our Customer Segments want to be reached? Which ones are most cost-efficient? How are we reaching them now?Which ones work best? How are we integrating them with customer routines? How are our Channels integrated?
  16. 16. H2020 GA #780460 Channel types and phases 16 Channel Phases 1. Awareness How do we raise awareness about our company’s products and services? 2. Evaluation How do we help customers evaluate our organization’s Value Proposition? 3. Purchase How do we allow customers to purchase specific products and services? 4. Delivery How do we deliver a Value Proposition to customers? 5. After sales How do we provide post- purchase customer support? School mailing lists, word- of-mouth No real competition at the beginning, ability to share photos easily Sign-up using personal details Web, mobile Support center
  17. 17. H2020 GA #780460 Exercise 17
  18. 18. H2020 GA #780460 Let’s have a coffee break (20 minutes) 18
  19. 19. H2020 GA #780460 Key resources 19 The Key Resources Building Block describes the most important assets required to make a business model work What Key Resources do our Value Propositions require? Distribution channels?Customer Relationships? Revenue Streams?
  20. 20. H2020 GA #780460 4 main types of resources 20 Physical Intellectual Human Financial
  21. 21. H2020 GA #780460 Key activities 21 The Key Activities Building Block describes the most important things a company must do to make its business model work What Key Activities do our Value Propositions require? Customer Relationships? Distribution Channels? Revenue Streams?
  22. 22. H2020 GA #780460 Categories of key activities 22 Production Designing, making and delivering a product in substantial quantities/superior quality. Dominates the business models of manufacturing. Problem solving Coming up with new solutions to individual customer problems. Consultancies, hospitals, service organizations. Knowledge management, continuous training. Platform/Network Networks, matchmaking platform, software, brands. Platform management, service provisioning, platform promotion.
  23. 23. H2020 GA #780460 Key partnerships 23 The Key Partnerships Building Block describes the network of suppliers and partners that make the business model work Who are our Key Partners? Which Key Resources are we acquiring from partners? Which Key Activities do partners perform? Who are our key suppliers?
  24. 24. H2020 GA #780460 Partnership types and reasoning behind 24 Strategic alliances between non- competitors Coopetition: strategic partnerships between competitors Joint ventures to develop new business Buyer-supplier relationships to assure reliable supplies Types of partnerships Why create partnerships? Optimization and economy of scale Reduction of risk and uncertainty Acquisition of particular resources and activities + ++
  25. 25. H2020 GA #780460 Exercise 25
  26. 26. H2020 GA #780460 Cost structure 26 The Cost Structure describes all costs incurred to operate a business model Which Key Resources are most expensive? Which Key Activities are most expensive? What are the most important costs inherent in our business model?
  27. 27. H2020 GA #780460 Cost structure characteristics 27 Cost-driven Minimizing costs, leanest possible Cost Structure, low price, maximum automation, extensive outsourcing Fixed costs Costs that remain the same despite the volume of goods or services produced. Salaries, rent, physical manufacturing facilities Variable costs Costs that vary proportionally with the volume of goods or services produced. Raw materials, commissions, logistics costs. Economies of scale Cost advantages that a business enjoys as its output expands. Larger companies benefit from lower bulk purchase prices Economies of scope Cost advantages that a business enjoys due to a larger scope of operations. The same marketing activities or distribution channels support multiple products Value-driven Premium Value Propositions, high degree of personalized service Cost Structures Characteristics of Cost Structures
  28. 28. H2020 GA #780460 Revenue streams 28 The Revenue Streams Building Block represents the cash a company generates from each Customer Segment (costs must be subtracted from revenues to create earnings) For what do they currently pay? For what value are our customers really willing to pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?
  29. 29. H2020 GA #780460 How to generate Revenue Streams 29 Ways to generate Revenue Streams Asset sale Usage fee Subscription fees Licensing Lending/Renting/Leasing Brokerage fees Advertising
  30. 30. H2020 GA #780460 Exercise 30
  31. 31. H2020 GA #780460 Main tips for building a BMC 31 Consider the document a living organism Take time to fill each building block out Make sure everything you write down is based on data Be as specific as possible
  32. 32. H2020 GA #780460 Conclusions 32 The Business Model Canvas gives you the structure of a business plan without the overhead and the improvisation of a ‘back of the napkin’ sketch without the fuzziness (and coffee rings).
  33. 33. H2020 GA #780460 Homework for everyone • Video: Visualize your business model. Link Internet resources • Business Model Canvas Try with your own idea 33 • Business Model Generation by A. Osterwalder & Y. Pigneur Books
  34. 34. H2020 GA #780460 Reflection  Today I learned…  I was suprised by...  I will use... Go to XXX #YY 34
  35. 35. H2020 GA #780460 Info about next workshops in Vilnius 2018 April Lean startup 2018 June Using Business model canvas to assess and focus business development 2018 September How Customer Discovery guides business models 2018 October Client match- making meetup 2019 February ’I Bring the Idea’ matchmaking session 2019 May How to design a product using User Experience 2019 June How to conduct interviews and receive customer inputs 2019 July Spinout vs Startup – differences, how to operate and succeed 35
  36. 36. H2020 GA #780460 BUILD YOUR BUSINESS MODEL ON ONE PAGE 36 @Merlin_ICT

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Materials of the first MERLIN ( workshop, delivered in June'18. MERLIN will support market-oriented researchers, SMEs and startups across Europe, to consider the full potential of their research and to shape ideas and outputs into innovations to be ready for market validation and commercialisation, by using modern needs-first, market-led methodologies and offering free training workshops and meetup in 7 European countries. More information in video


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