Don't plan a business - develop a model! Value Proposition Canvas and Business Model Canvas explained via DollarShaveClub.com

1. Planning Your Venture
Dave Jarman. Head of Enterprise & Employability

2. In this session
• What is a business plan?
• Don’t write a plan, build a model.
• 3 Tools:
– The Value Proposition Canvas
– Porter’s 5 Forces
– The Business Model Canvas
• Test your assumptions

3. What is a business plan?
• A summation of how your business will work
• A set of assumptions about how the business
will work
• Something you hand to investors
• A snapshot in time
• Obsolete by the time its printed…
• A waste of your time?

4. 20 pages or 9 seconds to explain?

5. Do you get the business model?
• What is the product?
• Who is it for?
• What does it solve?
• Why is it better than the alternatives?

7. Creating Value
– the value proposition canvas

8. Creating Value
– the value proposition canvas
• Customers Jobs:
– Getting a task done
– Acquiring status
– Emotional sensation
• Pains:
– Avoiding undesirable situations
– Overcoming obstacles
– Mitigating risks
• Gains:
– Something that works
– Opportunities and bonuses
• Scale the importance, severity,
or relevance of the value for
the customer

9. Creating Value
– the value proposition canvas
• Products and Services:
– Physical or Intangible?
– How effective is it?
• Pain Relief:
– How quick is it?
– How effective is it?
• Gain Creators:
– How big and how quick a
gain is it?
– How relevant is the
gain?

10. Competitor Analysis
• Porter’s 5 Forces:
– Existing direct competitors
• Who already does what you
do?
– Emerging competitors
• Who could start doing what
you do?
– Substitutes and alternatives
• How else can customers solve
their problem?
– Power of suppliers
• Are you subject to the whims
of key suppliers?
– Power of buyers
• Are you vulnerable to
changing customer behaviour?

11. Do you get the business model?
• How do customers discover the product?
• What kind of ongoing relationship do they
have with their customers?
• How do they make money?
• What kinds of costs do they have?
– What kinds of assets/resources do they need?
– What kinds of activity do they need to fund?

13. “A business model describes the
rationale of how an organisation
creates, delivers and captures
value.”
Alex Osterwalder & Yves Pigneur
www.businessmodelgeneration.com

14. The Business Model Canvas

15. Customer segments
• For whom are we creating value?
• Each group of customers needs a distinct offer –
something that addresses their specific needs/desires.
• Who are our most important or valuable customers?
• What do we know about their buying behaviour and what
are they currently using as an alternative?

16. Value Proposition
• What value do we deliver to the customer?
• Which one of customer’s problems are we helping to solve?
• Which customer needs are we satisfying?
– Newness, Performance, Customisation, Effectiveness, Design, Brand,
Price, Cost Reduction, Risk Reduction, Accessibility,
Usability/Convenience
• What bundles of products and services are we offering to
which customer segments?

17. Channels
• Through which mechanisms do our customers want to
reach our products and services?
– Sales teams, Website, Shops, Partner stores or sites, Wholesale…
• How do our channels integrate?
• Which channels work best?
• How do our channels adjust to customer behaviour?

18. Customer Relationships
• What type of relationship does each Customer Segment
expect us to establish and maintain?
– Personal assistance, Dedicated personal assistance, Self-service,
Automated services, Communities, Co-creation
• How costly are they?
• How will they integrate with the rest of our business model?

19. Revenue Streams
• For what value are our customers really willing to pay?
• How do they want to pay for our products and services?
– Asset sale, Usage fee, Subscription fee, Lending/Renting/leasing, Licensing,
Brokerage fee, Advertising
• What do they already pay and how?
• How much is each revenue stream worth overall?
• What price should we charge?

20. Key Resources
• What Key Resources do our Value Propositions require?
– Physical assets – facilities, vehicles, machines, systems, distribution
networks
– Intellectual resources – brands, patents & copyrights, partnerships,
databases
– Humans – appropriately skilled and motivated people
– Financial – cash reserves, lines of credit, financial guarantees
• Do we need to own these ourselves? Or can we borrow/lease?

21. Key Activities
• What Key Activities do our Value Propositions require?
• What actions are required to deliver our Channels, Relationships, and
Revenue Streams?
– Designing, making, and delivering at an appropriate quality require a focus on the
production processes
– Problem solving for customers issues, consultancy services, anything service based
require a focus on knowledge management and staff training
– Building a business around the provision of a platform are dominated by managing,
promoting, and maintaining that platform and how it interfaces with customers

22. Key Partners
• Why Partner?
– Optimisation and economies of scale
– Reduction of risk and uncertainty
– Acquisition of particular resources and activities
• What Key Activities or Key Resources do our Partners supply to us and/or
acquire from us?
• Forms of Partnership: Alliances, Joint Ventures, Buyer-Supplier,
‘Coopitition’ (partnerships between competitors)

23. Cost Structure
• What are the most important costs inherent in your Business Model?
• What do our Key Activities and Key Resources cost us and how much can
be offset through Key Partnerships?
• Cost Structures:
– Cost-Driven: focus on minimising costs for the leanest possible operation
– Value-Driven: focus on value creation – often premium products and services
• Fixed Costs & Variable Costs (those that flex based on sales)
23

24. The Business Model Canvas

25. The Business Model Canvas

26. Key Tests
• Explain it in one sentence to a stranger
• Explain how it solves a real problem that real people
face that costs them real money
• Get positive feedback from a stranger without
explaining to them what it is and how it works

27. We can support you!
• www.bathspa.ac.uk/bathsparks
• Workshops (Wed 2pm-4pm,
Newton Park)
• 1-2-1 advice
• Resources (Pinterest)
• Events and activities
• Social Media:
– Facebook.com/bathsparks
– @BathSparks

28. Create it Challenge
• 60 second video + 600
characters
• Test your idea, get
feedback!
• £100 to be won by the
most popular and
creative ideas
• Deadline 16th
November
https://bathsparks.wazoku.com

29. Thank you!
• bathsparks@bathspa.ac.uk
• @bathsparks
• FB.com/bathsparks