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Building Breakthrough Business Models with Real Data
- 1. Building Breakthrough Business Models John Mullins London Business School © John Mullins 2010
- 2. Let’s Face an Uncomfortable Fact: Most New Ventures Fail © John Mullins 2010
- 3. Let’s Face an Uncomfortable Fact: Most New Ventures Fail • Why… © John Mullins 2010
- 4. Let’s Face an Uncomfortable Fact: Most New Ventures Fail • Why… • Most new businesses fail because the business model doesn’t work! © John Mullins 2010
- 5. Let’s Face an Uncomfortable Fact: Most New Ventures Fail • Why… • Most new businesses fail because the business model doesn’t work! – Too little cash coming in… © John Mullins 2010
- 6. Let’s Face an Uncomfortable Fact: Most New Ventures Fail • Why… • Most new businesses fail because the business model doesn’t work! – Too little cash coming in… – Too much cash going out. © John Mullins 2010
- 7. Let’s Take a Look at How Today’s Start-up Process Works © John Mullins 2010
- 8. © John Mullins 2010
- 9. © John Mullins 2010
- 10. My Assertion: Today’s Start-up Process, Like Ali G’s Pitch, Is Seriously Flawed © John Mullins 2010
- 11. My Assertion: Today’s Start-up Process, Like Ali G’s Pitch, Is Seriously Flawed • Driven by business plans based on naïve and unfounded assumptions © John Mullins 2010
- 12. My Assertion: Today’s Start-up Process, Like Ali G’s Pitch, Is Seriously Flawed • Driven by business plans based on naïve and unfounded assumptions • All in support of a “Plan A” that rarely works © John Mullins 2010
- 13. My Assertion: Today’s Start-up Process, Like Ali G’s Pitch, Is Seriously Flawed • Driven by business plans based on naïve and unfounded assumptions • All in support of a “Plan A” that rarely works • And it’s not the entrepreneur’s fault… © John Mullins 2010
- 14. Plan A or Plan B? © John Mullins 2010
- 15. Plan A or Plan B? “I’ve made more money on Plan B than I ever made by sticking to Plan A!” © John Mullins 2010
- 16. Why, Then, All the Blood, Sweat and Tears? © John Mullins 2010
- 17. Why, Then, All the Blood, Sweat and Tears? • Pages of prose © John Mullins 2010
- 18. Why, Then, All the Blood, Sweat and Tears? • Pages of prose • Reams of spreadsheet data © John Mullins 2010
- 19. Why, Then, All the Blood, Sweat and Tears? • Pages of prose • Reams of spreadsheet data • And the hockey-stick projections © John Mullins 2010
- 20. Why, Then, All the Blood, Sweat and Tears? • Pages of prose • Reams of spreadsheet data • And the hockey-stick projections • All in support of the perfect Plan A (that probably won’t work!) © John Mullins 2010
- 21. A Question for You… © John Mullins 2010
- 22. A Question for You… “Why will or won’t Ali G’s plan for an ice cream glove work?” © John Mullins 2010
- 23. So, is there a solution to the flawed start-up process? © John Mullins 2010
- 24. So, is there a solution to the flawed start-up process? • A rigorous solution, perhaps, for getting from your Plan A that probably won’t work © John Mullins 2010
- 25. So, is there a solution to the flawed start-up process? • A rigorous solution, perhaps, for getting from your Plan A that probably won’t work • To a better Plan B, a better business model, based on © John Mullins 2010
- 26. So, is there a solution to the flawed start-up process? • A rigorous solution, perhaps, for getting from your Plan A that probably won’t work • To a better Plan B, a better business model, based on – Real data © John Mullins 2010
- 27. So, is there a solution to the flawed start-up process? • A rigorous solution, perhaps, for getting from your Plan A that probably won’t work • To a better Plan B, a better business model, based on – Real data – For a real product or service © John Mullins 2010
- 28. So, is there a solution to the flawed start-up process? • A rigorous solution, perhaps, for getting from your Plan A that probably won’t work • To a better Plan B, a better business model, based on – Real data – For a real product or service – From real customers © John Mullins 2010
- 29. The Conventional Business Modeling Approach © John Mullins 2010
- 30. The Conventional Business Modeling Approach • Turn on Excel © John Mullins 2010
- 31. The Conventional Business Modeling Approach • Turn on Excel • Make silly “assumptions” (SWAGs) lacking in real evidence © John Mullins 2010
- 32. The Conventional Business Modeling Approach • Turn on Excel • Make silly “assumptions” (SWAGs) lacking in real evidence • Tweak the cells to create a “hockey stick” pro forma © John Mullins 2010
- 33. The Conventional Business Modeling Approach • Turn on Excel • Make silly “assumptions” (SWAGs) lacking in real evidence • Tweak the cells to create a “hockey stick” pro forma • Voila, you’ll soon be rich! © John Mullins 2010
- 34. So, how can you develop a business model that really stacks up? © John Mullins 2010
- 35. So, how can you develop a business model that really stacks up? • Turn off Excel and consider the five building blocks of every business model © John Mullins 2010
- 36. So, how can you develop a business model that really stacks up? • Turn off Excel and consider the five building blocks of every business model – What’s your revenue model? © John Mullins 2010
- 37. So, how can you develop a business model that really stacks up? • Turn off Excel and consider the five building blocks of every business model – What’s your revenue model? – Your gross margin model? © John Mullins 2010
- 38. So, how can you develop a business model that really stacks up? • Turn off Excel and consider the five building blocks of every business model – What’s your revenue model? – Your gross margin model? – Your operating model? © John Mullins 2010
- 39. So, how can you develop a business model that really stacks up? • Turn off Excel and consider the five building blocks of every business model – What’s your revenue model? – Your gross margin model? – Your operating model? – Your working capital model? © John Mullins 2010
- 40. So, how can you develop a business model that really stacks up? • Turn off Excel and consider the five building blocks of every business model – What’s your revenue model? – Your gross margin model? – Your operating model? – Your working capital model? – And your investment model. © John Mullins 2010
- 41. A Process to Get You There © John Mullins 2010
- 42. A Process to Get You There © John Mullins 2010
- 43. The Key Steps in Apple’s Journey © John Mullins 2010
- 44. The Key Steps in Apple’s Journey • Analogs © John Mullins 2010
- 45. The Key Steps in Apple’s Journey • Analogs • Antilogs © John Mullins 2010
- 46. The Key Steps in Apple’s Journey • Analogs • Antilogs • Leaps of faith © John Mullins 2010
- 47. The Key Steps in Apple’s Journey • Analogs • Antilogs • Leaps of faith • Hypotheses to rigorously test the most crucial leaps of faith © John Mullins 2010
- 48. Steve Jobs on Analogs and Antilogs © John Mullins 2010
- 49. Steve Jobs on Analogs and Antilogs “Picasso had a saying: he said good artists copy, great artists steal… © John Mullins 2010
- 50. Steve Jobs on Analogs and Antilogs “Picasso had a saying: he said good artists copy, great artists steal… and we have always been shameless about stealing great ideas.” © John Mullins 2010
- 51. The First Building Block: Your Revenue Model © John Mullins 2010
- 52. The First Building Block: Your Revenue Model • Plan A Plan B for two guys who wanted to enter the fishing industry… © John Mullins 2010
- 53. Another Building Block: Your Gross Margin Model © John Mullins 2010
- 54. Another Building Block: Your Gross Margin Model • A Plan A that is working so far © John Mullins 2010
- 55. Another Building Block: Your Gross Margin Model • A Plan A that is working so far © John Mullins 2010
- 56. The Third Building Block: Your Operating Model © John Mullins 2011 17
- 57. An Overlooked Building Block: Your Working Capital Model © John Mullins 2010
- 58. An Overlooked Building Block: Your Working Capital Model © John Mullins 2010
- 59. Lest We Forget: Your Investment Model © John Mullins 2010
- 60. Lest We Forget: Your Investment Model • Two vastly different business models for VoIP telecom technology © John Mullins 2010
- 61. Lest We Forget: Your Investment Model • Two vastly different business models for VoIP telecom technology © John Mullins 2010
- 62. Lest We Forget: Your Investment Model • Two vastly different business models for VoIP telecom technology © John Mullins 2010
- 63. What Do Most of these Examples Have in Common? © John Mullins 2010
- 64. What Do Most of these Examples Have in Common? • All (except Zynga and Costco) built their eventual success not on Plan A, but on Plan B © John Mullins 2010
- 65. What Do Most of these Examples Have in Common? • All (except Zynga and Costco) built their eventual success not on Plan A, but on Plan B • For each of them, their breakthrough was a business model whose strength was anchored in just one of the five business model elements © John Mullins 2010
- 66. On Which Elements Did Each Break Through? © John Mullins 2010
- 67. On Which Elements Did Each Break Through? • Apple’s and Princess’ revenue models © John Mullins 2010
- 68. On Which Elements Did Each Break Through? • Apple’s and Princess’ revenue models • Zynga’s gross margin model © John Mullins 2010
- 69. On Which Elements Did Each Break Through? • Apple’s and Princess’ revenue models • Zynga’s gross margin model • Ryanair’s operating model © John Mullins 2010
- 70. On Which Elements Did Each Break Through? • Apple’s and Princess’ revenue models • Zynga’s gross margin model • Ryanair’s operating model • Costco’s working capital model © John Mullins 2010
- 71. On Which Elements Did Each Break Through? • Apple’s and Princess’ revenue models • Zynga’s gross margin model • Ryanair’s operating model • Costco’s working capital model • Skype’s investment model © John Mullins 2010
- 72. On Which Elements Did Each Break Through? • Apple’s and Princess’ revenue models • Zynga’s gross margin model • Ryanair’s operating model • Costco’s working capital model • Skype’s investment model • On which element can you break through to a better business model?2010 © John Mullins
- 73. Putting Process and Framework Together: The Business Model Grid © John Mullins 2010
- 74. Putting Process and Framework Together: The Business Model Grid Business Model Element © John Mullins 2010
- 75. Putting Process and Framework Together: The Business Model Grid Business Model Element Revenue Model © John Mullins 2010
- 76. Putting Process and Framework Together: The Business Model Grid Business Model Element Revenue Model Gross Margin Model © John Mullins 2010
- 77. Putting Process and Framework Together: The Business Model Grid Business Model Element Revenue Model Gross Margin Model Operating Model © John Mullins 2010
- 78. Putting Process and Framework Together: The Business Model Grid Business Model Element Revenue Model Gross Margin Model Operating Model Working Capital Model © John Mullins 2010
- 79. Putting Process and Framework Together: The Business Model Grid Business Model Element Revenue Model Gross Margin Model Operating Model Working Capital Model Investment Model © John Mullins 2010
- 80. Putting Process and Framework Together: The Business Model Grid Business Model Analogs Element Revenue Model Gross Margin Model Operating Model Working Capital Model Investment Model © John Mullins 2010
- 81. Putting Process and Framework Together: The Business Model Grid Business Model Analogs Antilogs Element Revenue Model Gross Margin Model Operating Model Working Capital Model Investment Model © John Mullins 2010
- 82. Putting Process and Framework Together: The Business Model Grid Business Model Analogs Antilogs Leaps of Element Faith Revenue Model Gross Margin Model Operating Model Working Capital Model Investment Model © John Mullins 2010
- 83. Putting Process and Framework Together: The Business Model Grid Business Model Analogs Antilogs Leaps of Hypotheses Element Faith Revenue Model Gross Margin Model Operating Model Working Capital Model Investment Model © John Mullins 2010
- 84. Putting Process and Framework Together: The Business Model Grid Business Model Analogs Antilogs Leaps of Hypotheses Element Faith Revenue Model Gross Margin Model Operating Model Working Capital Model Investment Model © John Mullins 2010
- 85. Putting Process and Framework Together: The Business Model Grid Business Model Analogs Antilogs Leaps of Hypotheses Element Faith Revenue Model Gross Margin Model Operating Model Working Capital Model Investment Model © John Mullins 2010
- 86. Putting Process and Framework Together: The Business Model Grid Business Model Analogs Antilogs Leaps of Hypotheses Element Faith Revenue Model Gross Margin Model Operating Model Working Capital Model Investment Model © John Mullins 2010
- 87. Putting Process and Framework Together: The Business Model Grid Business Model Analogs Antilogs Leaps of Hypotheses Element Faith Revenue Model Gross Margin Model Operating Model Working Capital Model Investment Model © John Mullins 2010
- 88. Putting Process and Framework Together: The Business Model Grid Business Model Analogs Antilogs Leaps of Hypotheses Element Faith Revenue Model Gross Margin Model Operating Model Working Capital Model Investment Model © John Mullins 2010
- 89. Putting Process and Framework Together: The Business Model Grid Business Model Analogs Antilogs Leaps of Hypotheses Element Faith Revenue Model Gross Margin Model Operating Model Working Capital Model Investment Model © John Mullins 2010
- 90. Putting Process and Framework Together: The Business Model Grid Business Model Analogs Antilogs Leaps of Hypotheses Element Faith Revenue Model Gross Margin Model Operating Model Working Capital Model Investment Model © John Mullins 2010
- 91. Putting Process and Framework Together: The Business Model Grid Business Model Analogs Antilogs Leaps of Hypotheses Element Faith Revenue Model Gross Margin Model Operating Model Working Capital Model Investment Model © John Mullins 2010
- 92. Putting Process and Framework Together: The Business Model Grid Business Model Analogs Antilogs Leaps of Hypotheses Element Faith Revenue Model Gross Margin Model Operating Model Working Capital Model Investment Model © John Mullins 2010
- 93. Putting Process and Framework Together: The Business Model Grid Business Model Analogs Antilogs Leaps of Hypotheses Element Faith Revenue Model Gross Margin Model Operating Model Working Capital Model Investment Model © John Mullins 2010
- 94. Can this Work for You? The Proof of the Pudding © John Mullins 2010
- 95. Can this Work for You? The Proof of the Pudding © John Mullins 2010
- 96. Can this Work for You? The Proof of the Pudding © John Mullins 2010
- 97. Can this Work for You? The Proof of the Pudding © John Mullins 2010
- 98. What Do They Have in Common? © John Mullins 2010
- 99. What Do They Have in Common? • None stuck to their original business model © John Mullins 2010
- 100. What Do They Have in Common? • None stuck to their original business model • All became household names by abandoning Plan A and getting to Plan B © John Mullins 2010
- 101. Lots More Examples, in Start-ups and More © John Mullins 2010
- 102. Lots More Examples, in Start-ups and More • China’s Shanda: Revenue model © John Mullins 2010
- 103. Lots More Examples, in Start-ups and More • China’s Shanda: Revenue model • Japan’s Toyota: Gross margin model © John Mullins 2010
- 104. Lots More Examples, in Start-ups and More • China’s Shanda: Revenue model • Japan’s Toyota: Gross margin model • India’s Oberoi Hotels: Operating model © John Mullins 2010
- 105. Lots More Examples, in Start-ups and More • China’s Shanda: Revenue model • Japan’s Toyota: Gross margin model • India’s Oberoi Hotels: Operating model • USA’s Dow Jones: Working capital model © John Mullins 2010
- 106. Lots More Examples, in Start-ups and More • China’s Shanda: Revenue model • Japan’s Toyota: Gross margin model • India’s Oberoi Hotels: Operating model • USA’s Dow Jones: Working capital model • Spain’s Zara: Multi-dimensional model © John Mullins 2010
- 107. Lots More Examples, in Start-ups and More • China’s Shanda: Revenue model • Japan’s Toyota: Gross margin model • India’s Oberoi Hotels: Operating model • USA’s Dow Jones: Working capital model • Spain’s Zara: Multi-dimensional model © John Mullins 2010 • And many more, in visionary
- 108. A Closing Thought on Why Business Plans Don’t Deliver © John Mullins 2010
- 109. A Closing Thought on Why Business Plans Don’t Deliver • Most of the time, Plan A doesn’t work. Why? © John Mullins 2010
- 110. A Closing Thought on Why Business Plans Don’t Deliver • Most of the time, Plan A doesn’t work. Why? • There’s simply too much that you simply don’t know © John Mullins 2010
- 111. A Closing Thought on Why Business Plans Don’t Deliver • Most of the time, Plan A doesn’t work. Why? • There’s simply too much that you simply don’t know – Some things you know you don’t know © John Mullins 2010
- 112. A Closing Thought on Why Business Plans Don’t Deliver • Most of the time, Plan A doesn’t work. Why? • There’s simply too much that you simply don’t know – Some things you know you don’t know – Others you don’t know you don’t know © John Mullins 2010
- 113. A Tell-Tale Phrase in Too Many Business Plans © John Mullins 2010
- 114. A Tell-Tale Phrase in Too Many Business Plans “We believe that…” © John Mullins 2010
- 115. There Is a Solution… © John Mullins 2010
- 116. There Is a Solution… • Stop working on your business plan for Plan A © John Mullins 2010
- 117. There Is a Solution… • Stop working on your business plan for Plan A • And get on with your business, your journey to a more vibrant Plan B © John Mullins 2010
- 118. There Is a Solution… • Stop working on your business plan for Plan A • And get on with your business, your journey to a more vibrant Plan B – Find some analogs and antilogs © John Mullins 2010
- 119. There Is a Solution… • Stop working on your business plan for Plan A • And get on with your business, your journey to a more vibrant Plan B – Find some analogs and antilogs – Identify your most crucial leaps of faith and some hypotheses to examine them © John Mullins 2010
- 120. There Is a Solution… • Stop working on your business plan for Plan A • And get on with your business, your journey to a more vibrant Plan B – Find some analogs and antilogs – Identify your most crucial leaps of faith and some hypotheses to examine them – Build a dashboard to guide your journey © John Mullins 2010
- 121. There Is a Solution… • Stop working on your business plan for Plan A • And get on with your business, your journey to a more vibrant Plan B – Find some analogs and antilogs – Identify your most crucial leaps of faith and some hypotheses to examine them – Build a dashboard to guide your journey – Get out there and learn © John Mullins 2010
- 122. But Don’t Just Take it from Randy and Me © John Mullins 2010
- 123. But Don’t Just Take it from Randy and Me “What matters most is not the quality of the initial business plan, but instead the ability of the team to iterate successive business plans as a means to finding what works. So the trick is to experiment quickly but intelligently, and with discipline. This book provides an exceptionally helpful framework for how to do this.” Dennis Whittle, CEO GlobalGiving.com © John Mullins 2010
- 124. For the Rest of the Story, in Bookstores Now… Number 1 Best-seller: “Best Books for Business Owners”, 2009 Inc. Magazine © John Mullins 2010
- 125. To Assess Your Opportunity: The New Business Road Test © John Mullins 2010 31
- 126. Questions? jmullins@london.edu www.getting-to-plan-b.com © John Mullins 2010
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