he BMC provides a holistic view of your business model, fostering strategic clarity and alignment.. It is key driver of the business. It is how you create and deliver value to your customers, make money, and operate it sustainably.
It has 9 key pointers to work on and could also be considered as a starting point of a venture
Designing a Business Model - Business Model Canvas Class 5 2024
1. Entrepreneurship and New Venture
Dr. Alok Nikhil Jha
www.linkedin.com/en/alokni
khil
Alok.nikhil@gmail.com
1
CLASS # 05
2nd Mar 2024
2. Team Up
Present your Ideas Why the idea is relevant What kind of team you
would require/have
What resources you have
in the team, identify the
roles
3. What has been covered
Being an
Entrepreneur
Why startup
fails
Starting a
Venture
Ideation and
Idea validation
Value
Proposition
Business
Model TBD
5. Value Prop Statement
• For (target customer segments)
• With BLAC problem or need
• That is 4U
• Dissatisfied with (Unworkable or Underserved
alternative)
• Our product is a (3D new product MVP)
• That provides (compelling problem-solving
capability – Gain)
• That overcomes (switching costs Gain/Pain
ratio >10x)
• Unlike (the Unworkable product alternative that
Underserves the need or opportunity)
6. Why is a business model
important for you as a
founder?
8. Business model • noun
• a description of how your
company creates, delivers and
captures its value
• It is a strategic management
template for developing new or
documenting existing business models.
It is a visual chart with elements
describing a firm's or product's value
proposition, infrastructure, customers,
and finances.
or
• Your internal business planning
guide
9. Why Startup Fail
Lack Significant
problem or
meaningful
opportunity
Unable to create
value for a startup
10. Questions
How many of you think that technology
or service is a breakthrough?
We will take business model is break
through?
11. What is your Core Value
Capabilities
Of
Really
Exceptional
Value
CORE
Value
Focus on your Core Value
12. Cut to Core
TEST WITH
CUSTOMER
WHAT IS THE
CORE OF IMT
WHAT IS CORE OF
SPOTIFY
DISRUPTIVE IN
MONETISATION
13. Questions
What do you have at your CORE?
• Process or product?
• Software or services?
• Content or data?
How could you realize this?
• Open or proprietary?
• Freemium or Premium?
• Subscription or License?
20. Customer segment
• Who are the people who will benefit from my value proposition?
• Who are our most important customers?
• Whose problem we are solving? For whom we are creating value ?
• Who are the people who will value my value proposition?
• Are they another business or people? E.g. B2G or specific people
• What are the characteristics of the people who are looking for my value proposition?
• For example, gender, age group etc. What are their spending habits?
• It is recommended to know your market size and thus a better understanding of customers
People and companies you are trying to sell
21. What value do we deliver to the customer?
Which one of our customer’s problems we are
trying to solve?
Why will customer buy?
22. Value Prop Statement
• For (target customer segments)
• Dissatisfied with (existing solution)
• Due to (key unmet needs)
• (your venture name) offers a (product
category)
• That provides (key benefits of your solution)
23. Value proposition
• Products and/or services that create value for a specific customer segment
• Which problem are we solving ?
• Which customer needs we are fulfilling? What are our products?
• Why would someone want to have this problem solved?
• What is the underlying motivator for this problem?
Key Points: Newness, Performance, Customization, Ease, Price, Design, Cost reduction, Risk
reduction, Accessibility, Core Value
the value proposition answers one important question, “what compels customers to buy
from you?”.
24.
25. Channels
• Through what channel the Customer Segments want to be reached?
• How are we reaching them now?
• How are we going to tell our customer segment about our value proposition?
• Where are our customers? Social media, public transport, schools etc.
• Are they driving their car and listening to the radio? Are they at an event or conference?
Do they watch TV at 7pm on a Friday night?
• How receptive are they to advertisements?
• What are our channels? Which one works best and cost-efficient?
Example, social media, public speaking, sponsorships, radio, represent company in
conferences etc.
Touch points with customers
how customers first come into contact with your product, and how your product ends up with
the customer.
26. Customer relationships
• Relationship between company and specific customer segment.
• What type of relationship does each of out customer segments expect us to establish?
• How a business interacts with its customers?
• Meet customers them in person? Or over the phone? Or the business is predominantly
run online so the relationship will be online too?
• Categories: Personal assistance, self service, communities, co-creation (reviews)
How you acquire, retain and upsell customers
Getting customers: How does your company incentivise customers to make their first
purchase?
Keeping customers: How does your company keep your customers coming back?
Growing customers: How do you get your customers to spend more?
27. Revenue Streams
• Conversion of Value Proposition or solution to the customer’s problem into financial gain.
• How do you gain revenue? How you make money?
• Pay per product (pay per view)
• Fee for service
• Subscription
• Dividends
• Referral feeds
• Freemium
• Equity gain
28. Key Partners
• Key Partners are a list of other external companies/suppliers/parties that we may need to achieve your key
activities and deliver value to the customer.
• Who are our key partners?
• If the business cannot achieve the value proposition alone, where to rely?
• An example of this is ‘if I sell groceries to customers, I may need a local baker to supply fresh bread to my
store’.
29. Key Activities
• The actions and activities to be done to make business model work.
• What activities does the business undertake in achieving the value proposition for the customer?
• Time? Expertise?
• Distribution of product? Technical development?
• Strategy?
• Offer resources (human/physical)?
• Ex. Key activity for Dell requires supply chain management and for BCG it involves problem
solving
• Consulting, Designing, Web development, Baking, Driving, marketing, supply chain
30. Key resources
• practical resources are needed to achieve the key activities (actions) of the business?
• Physical – office space, assets
• Human – manpower, experts
• Intellectual – patents IPR development, upholding
• Financial – Loans, funding etc
Example Factory, Employee
People and companies you are trying to sell
31. Cost structure
• Cost of operating the business.
• How much does it cost to achieve businesses key activities?
• What are the cost of key resources and key partnerships?
• How much does it cost to achieve the value proposition for customers/users?
• Are there additional costs to running a business?
• Legal? Compliance cost? Infrastructure?
• Time investment is a cost
• Founder’s Salary is a cost
• Recurring and non recurring cost, variable costs,
32. How to use BMC
The BMC is the cornerstone of your internal business
plan
The BMC need to be as specific as possible
The more quantification, the better
(Initially) focus on customer segments and value
proposition
Develop it in the order that I presented it
Prioritize risk or unknowns
The BMC is an evolving tool, not a one time task
The BMC should be visible to the entire team