Elif Yılmaz Phone: +90 212 328 1939 Email: e.yilmaz@bicangels.com BIC Angels is an angel investment network based in Istanbul, Turkey. It was founded in 2010 by the Bogazici University Entrepreneurship Center (BUEC) and the Istanbul Chamber of Commerce (ITO). BIC Angels aims to support early stage, high growth potential startups in Turkey by providing them with seed and early stage funding as well as mentoring support. The network currently has over 50 business angel investors from various industries and backgrounds. The investment focus is on technology and technology enabled startups in sectors like software, mobile, internet, hardware, cleantech

1. PLANNING, DEVELOPING AND TESTING A BUSINESS MODEL
Dr. Joachim Behrendt

2. INTRODUCTION
StartNowHow
• Open seminar series for active and prospective entrepreneurs
• 10 sessions on monthly basis until summer 2017
• Covers relevant theoretical and practical aspects of entrepreneurship
• Based on lecture „entrepreneurship“ @Bogazici University
• Based on experiences of entrepreneurs, investors, mentors and consultants
• Each session with guest speaker (entrepreneurs, investors, mentors, etc.)
• Certificate provided for participants (from BIC Angels / Bogazici University
Entrepreneurship Center) joining at least 70% of the sessions
• Language: English / Turkish
• Thursdays 17.15h – 19.30h
• Next session: Thu 12. January 2017
• Topic: Opportunity Recognition and Evaluation
• Early registration for each session required (eventbrite), limited capacity!
• Priority for regular participants
Startnowhow – Seminar 215.12.2016 2

3. INTRODUCTION
StartNowHow - Literature
• Bowers, Brent, 8 Patterns of Highly Effective Entrepreneurs, Doubleday, New York, NY 2008
• Bygrave, William D. / Zacharaiks, Andrew, The Portable MBA in Entrepreneurship, 4th ed., Wiley,
Hoboken, NJ 2010
• Drucker, Peter F., Innovation and Entrepreneurship, 1st ed. 1985, reprinted 2010, Elsevier, Kiddlington,
2010
• Harper, Stephen C., Extraordinary Entrepreneurship: The Professional’s Guide to Starting an Exceptional
Enterprise, Wiley, Hoboken, NJ 2005
• Hirshberg, Meg Cadoux, For Better or for Work, All Inc., New York, NY 2012
• Hisrich, Robert D. / Peters, Michael P. / Shepherd, Dean A., Entrepreneurship, 9th ed., McGraw-Hill, New
York, NY 2012
• Kuratko, Donald F., Entrepreneurship: Theory, Process, Practice, 8th ed., South-Western, Mason, OH 2009
• Leach, J. Chris / Melicher, Ronald W., Entrepreneurial Finance, International Edition, 4th ed., South-
Western, Hampshire 2012
• Osterwalder, Alexander / Pigneur, Yves, Business Model Generation, Wiley, Hoboken, NJ 2010
• Ries, Eric, The Lean Startup, Crown Business, New York, NY 2011
• Smith, Janet Kiholm / Smith, Richard L. / Bliss, Richard T.,Entrepreneurial Finance – Strategy, Valuation,
and Deal Structure, Standford University Press, Stanford, CA 2011
• Stokes, David / Wilson, Nick, Small Business Management and Entrepreneurship, 6th ed., South-Western,
Hampshire 2010
• Taleb, Nassim Nicholas, The Black Swan – The Impact of the Highly Improbable, revised ed., Penguin,
London 2010
• Timmons, Jeffry A. / Spinelli, Stephen, New Venture Creation – Entrepreneurship for the 21st Century, 9th
ed., McGraw-Hill, New York, NY 2011
Startnowhow – Seminar 115.12.2016 3

4. INTRODUCTION
StartNowHow - Seminar Topics (preliminary)
1. Thu 22.09.16: The entrepreneurial ecosystem in Turkey
2. Thu 20.10.16: Entrepreneurship as a profession
3. Thu 17.11.16: Financial planning for startups
4. Thu 15.12.16: Planning, developing and testing a business model
5. Thu 12.01.17: Opportunity recognition and evaluation
6. Thu 09.02.17: Market and competitor research
7. Thu 09.03.17: Funding the startup – stage financing for ventures
8. Thu 06.04.17: Startup valuation
9. Thu 04.05.17: The investment process – pitching, negotiations and termsheet
10. Thu 01.06.17: Success and failure as an entrepreneur
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5. BUSINESSMODEL
What Is a Business Model?
• Core of the business plan, key element of the business plan - how will the venture create
money?
• Definitions:
• „A business model explains how a venture is expected to create a profit“ (Fiet, J.O. /
Patel, P.C., Forgiving Business Models for New Ventures, in: Management Science 48 (1),
2008, pp.105-121)
• „A business model describes the rationale of how an organization creates, delivers, and
captures value.“ (Osterwalder, A. / Pigneur, Y., Business Model Generation, 2009, p.14)
• „A business model is a concise representation of how an interrelated set of decision
variables in the areas of venture strategy, architecture, and economics are addressed
to create sustainable competitive advantage in defined markets.“(Morris, M.H. et. al.,
The Entrepreneur‘s Business Model: Towards Conceptualization, in: International Journal
of Business Research 58 (6), 2005, pp. 726-735)
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6. BUSINESSMODEL
Types of Business Models
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(adopted from Amit, R, / Zott, C., Value Creation in E-Business, in: Strategic Management Journal 22 (6/7),
2001, pp. 493-520)
Value
Creation
Efficiency
Complementarity
Innovation Lock-In
• Innovation-centered business models: Create new possibilities for transactions among
economic subjects – Example: Location-based mobile commerce
• Efficiency-centered business models: Increase efficiency for already existing transactions
among economic subjects – Example: Use of internet in touristic industry, Amazon
• Lock-in-centered business models: Increase volume of existing transactions between
existing economic subjects by binding them closer together – Example: 2-year-contracts for
mobile phone usage and value-added services, Google search engine, Loyaltycard programs
• Complementarity-centered business models: Combining own services with
complementary services for increasing attractiveness of transactions among economic
subjects – Example: App stores, Computer + operating system bundle

7. BUSINESSMODEL
Characteristics of Superior Business Opportunities
• Added value
• Venture creates or adds significant value to a customer or end user
• Venture solves a significant problem
• Venture adds value by solving a significant problem, removing a serious pain, or meeting
a significant want or need
• Someone is willing to pay a premium for solving this problem
• Venture has robust market, margin, and money-making characteristics
• Large enough market (min. 50 Mio $)
• High growth expectation (min. 20% p.a.)
• High gross margins (min. 40%)
• Strong and early cash flow (recurring revenue, low assets, low working capital)
• High profit potential (min. 10% - 15% after tax income)
• Attractive, realizable return for investors (Internal Rate of Return IRR min. 25%- 30%)
• Venture fits to skillset
• Good fit with founder(s) and managment team skills for that time and marketplace
• Attractive risk-reward balance
• Source: Timmons / Spinelli, New Venture Creation, p.150
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8. BUSINESSMODEL
Design of Business Models
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9. BUSINESSMODEL
Design of Business Models
• Cost Structure C$ - Resulting from cost contribution for building blocks of the business
model:
• Key partners KP: Resources necessary for producing and offering the products / services,
and to be purchased from outside
• Key resources KR: Necessary key assets for producing and offering products / services
• Key activities KA: Key activities to be performed for producing and offering the products
/ services
• Revenue Streams R$ - Resulting from successful offer of VP to the customer:
• Customer segments CS: Relevant customer segments to be served
• Customer relationships CR: Development and maintenance of relationships for each
relevant CS
• Channels CH: Channels through which products / services will be offered to customers
• Value Proposition VP – Way in which organization will solve customer problems and fulfill
customer needs by providing value-adding products / services
• (from: Osterwalder, A, Pigneur, Y., Business Model Generation, 2009)
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10. BUSINESSMODEL
Revenues
15.12.2016 10Entrepreneurship
Source: Bygrave, W.D. / Zacharakis, A., The Portable MBA in Entrepreneurship, p.143

11. BUSINESSPLAN
What Is a Business Plan?
• Definition: The business plan is a written document prepared by the entrepreneur that
describes all the relevant external and internal elements involved in starting a new
venture.
(Hisrich / Peters / Shepherd, Entrepreneurship, p.189)
• Integration of functional plans (e.g. Marketing, finance, manufacturing, HR)
• Planning horizon: 3-5 years
• „Like a road map“ when travelling from A to B on different possible routes
• Types of Business Plans
• „Business plans, like entrepreneurs, come in all shapes and sizes“ (Harper, Extraordinary
Entrepreneurship, p.182)
• Summarized business plan: around 15 pages, contains only key information, not for
external communication / communication to potential / new business partners
• Complete business plan: Most frequent form, 30-50 pages + 10-30 pages attachments,
especially needed for obtaining external funding
• Operational business plan: More than 100 pages, mainly for already existing companies
(example: sale of business), extensive quantitative part, used for internal planning
process
• (Translated from Fischl / Wagner, Der perfekte Businessplan, pp. 17-20)
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12. BUSINESSPLAN
Structure of a Business Plan – Example, page 1
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Source: Hisrich / Peters / Shepherd, Entrepreneurship, p.201

13. BUSINESSPLAN
Structure of a Business Plan – Example, page 2
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Source: Hisrich / Peters / Shepherd, Entrepreneurship, p.201

14. BUSINESSPLAN
Why Preparing a Business Plan?
• Even without the need for an external investor, entrepreneurs should force themselves
to carefully prepare a business plan
• „In preparing for battle I have always found that plans are useless, but planning is
indispensable.“ (Dwight D. Eisenhower)
• Helps you learning about details of your business, your market and your operations
• Supports gaining critical insights into your intended partner‘s styles, strenghts,
weaknesses, and ways of cooperation
• Gives you intimate knowledge of the opportunity, buyer and user, market and
competition, and financial characteristics
• Serves as tool for communication to outside parties interested in the venture, and as a
medium for discussion with them, revealing their knowledge, creativity, and suit for their
intended roles
• Prevents you from jumping ahead prematurely, limits sloppiness with regard to necessary
research, creative problems solving, and „hard thinking“
• Tests your commitment and prevent your heart from getting too far ahead of your head
• Saves time during operations, helps avoiding common mistakes, helps creating order for
a, in general, chaotic and unpredictable event
• Helps you creating the best possible roadmap from where you are, to where you want to
be
• (Adopted from Timmons / Spinelli, New Venture Creation, pp. 270-271)
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15. BIC ANGEL INVESTMENTS
Dr. Joachim Behrendt
Phone: +90 212 328 1939
Fax: +90 212 328 1933
www.bicangels.com
http:/twitter.com/joachimbehrendt
http://tr.linkedin.com/pub/joachim-behrendt/18/706/a7a
Email: j.behrendt@bicangels.com