The document introduces the concept of a business model and distinguishes it from a business plan. It defines a business model as describing how an organization creates, delivers, and captures value using nine building blocks: customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure. These building blocks cover four main areas of a business: customers, offer, infrastructure, and financial viability. The document then provides a deeper dive into each of the nine business model building blocks and shows an example of how they apply to Skype's "freemium" business model.

1. Brief Introduction: Business Model Generation Shenzhen Startup Meetup August 23, 2011 1

2. Sourced fromwww.businessmodelgeneration.comWritten by: Alexander Osterwalderand Yves Pigneur 2 Note: original work has been adapted under the license:http://creativecommons.org/licenses/by-sa/3.0/

3. Before we start, a Business Model is not a Business Plan.What is a Business Plan? A 30 page doc investors make you write, which they will not read. You (founder) should write one at the appropriate time. Typical format Executive Summary Company Overview Business Environment Detailed Company Description Company Strategy Financial Review Income Statement Balance Sheet Cash-flow Statement Action Plan 3

4. What is a Business Model? A business model describes the rationale of how an organization creates, delivers, and captures value. It can be described using nine basic building blocks that show the logic of how a company intends to make money. The nine blocks cover the four main areas of a business: Customers Offer Infrastructure Financial viability The business model is a blueprint for a strategy to be implemented through organizational structures, processes, and systems. 4

5. 9 Business Model Building Blocks Customer Segments An organization serves one or several Customer Segments. Value Propositions The way to it solves customer problems and satisfies customer needs. Channels VPs are delivered to customers through communication, distribution, and sales channels. Customer Relationships Customer relationships are established and maintained with each Customer Segment. Revenue Streams Revenue streams result from value propositions successfully offered to customers. Key Resources Key resources are the assets required to offer and deliver the previously described elements… Key Activities …by performing a number of Key Activities. Key Partnerships Some activities are outsourced and some resources are acquired outside the enterprise. Cost Structure The business model elements result in the cost structure. 5

6. Deeper Dive into the 9 Building Blocks 6 <slides omitted>

7. 7 The Business Model Canvas

8. 8 Example: Skype (Uses a “freemium” model) Let’s look at this closer. It’s a voice calling services company with the operating economics of a s/w company. No telco infrastructure.

9. We’ve just scratched the surface Patterns of Business Models Unbundling Business Models The Long Tail Multi-sided Platforms Freemium models Open Business Models Design Techniques Customer Insights Ideation Visual Thinking Prototyping Storytelling Scenarios Strategy Business Model Environment Evaluating Business Models Blue Ocean Strategy Managing Multiple Business Models Process Business Models Design Process 9 Other Topics Beyond Business Models Writing Your Business Plan Sources of Funding How to Pitch to Investors What Investors are looking for Lean Development Corporate Identity The Customer Development Process (S Blank’s The 4 Steps) Customer Discovery Customer Validation Customer Creation Company Building Exits (Exit fast and exit often!) Much more!!

10. No more slides, let’s start using the tool! 10