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Uploaded byAlexander Osterwalder
Talk with Steve Blank at true ventures
This document discusses business model innovation using the Business Model Canvas as a tool. It provides an example of how Nespresso changed their business model to become successful. Their original model in 1987 almost failed, but by changing to a model where they control the pod production and recycling, they were able to grow significantly with annual growth over 30% and global sales of over $3.8 billion. The document advocates testing business model prototypes with customers to find the right model rather than relying only on the ideas of management.
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- 1. DESIGNING & TESTING BUSINESS MODELS AlexOsterwalder.com SteveBlank.com @business_design @sgblank
- 2. ? wheredo I come from, what do I do?
- 5.
- 8.
- 9. BusinessModelGeneration.com/toolbox iPad stencil, actual scale, template by hortis, le studio. Feb. 2010. http://hortis.lestudio.ch date: project: screen: author:
- 10. this workshop daycombines two global bestsellers + BusinessModelGeneration.com SteveBlank.com/books.html
- 11.
- 12.
- 13. [sources: Henry Chesbrough,photo: life.com]
- 14. revenue growth of41% compounded for the next 20 years [sources: Henry Chesbrough, photo: xerox.com]
- 15.
- 16.
- 17.
- 18. 1,000,000 new book titles were published in the U.S. in ʼ10
- 19. 11,000 new businessbooks appear every year
- 20. 12% decline ofsales in major bookstore chains (ʻ07-ʼ09)
- 22. ? so what did we do?
- 23. we changed theproduct...
- 30. ? would abig publishing house have taken us on with this book?
- 31.
- 32. we changed thebusiness model...
- 33. “ you canʼt write about business model innovation without an innovative business model ”
- 36.
- 37.
- 38.
- 39.
- 40.
- 41.
- 43. # in the top 10 of softcover business books in the US
- 44. # 170ʼ000+ English #bmgen copies in print (June 2011)
- 45. # 18 #bmgen translations upcoming in 2011
- 46.
- 49. business models enable (new)products and technologies and help solve (entirely new) customer problems
- 50. the 100 Million dollar question
- 51. how do yousearch for the right business model?
- 52. 1 understanding business models 2 prototyping alternatives of “what could be” 3 evaluating your business model design 4 testing business models with customer development
- 53. but hey, 1 what is a business model anyways?
- 55.
- 57. ? ?
- 60.
- 61. to describe, challenge, design,and invent business models more systematically
- 62. 9 building blocks
- 63. CUSTOMER SEGMENTS images by JAM
- 64. VALUE PROPOSITIONS images by JAM
- 65. CHANNELS images by JAM
- 66. CUSTOMER RELATIONSHIPS images by JAM
- 67. REVENUE STREAMS images by JAM
- 68. KEY RESOURCES images by JAM
- 69. KEY ACTIVITIES images by JAM
- 70. KEY PARTNERS images by JAM
- 71. COST STRUCTURE images by JAM
- 72. key value customer activities proposition relationships key customer partners segments cost revenue structure key streams resources channels images by JAM
- 73. The Business ModelCanvas key activities value proposition customer relationships KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS building building key block block customer partners segments building building building block building block block block KEY CHANNELS RESOURCES building block building block building block cost COST STRUCTURE REVENUE STREAMS revenue buildi structure building key ng building streams block resources block channelsck blo images by JAM
- 74.
- 75.
- 77. how much lessor more do the Swiss pay per gram of coffee consumed at home compared to a decade ago?
- 78.
- 80. Nespresso changed the business model for espresso
- 81.
- 82.
- 83. one of thefastest- growing businesses in the Nestlé group
- 84. average growth of 30%p.a. since 2000
- 85. global sales of 3.8+billion USD
- 86. Nespresso’s business Model KEY KEY Value CUSTOMER CUSTOMER PARTNERS ACTIVITIES Proposition RELATIONSHIPS SEGMENTS B2C marketing tion distribu Nespre sso households Club (espresso fans) *** Nespresso ine pod production coffee mach machines rs manufacture businesses KEY etail CHANNELS **** r RESOURCES Nespresso ts coffee outle mail pods growers distribu order tion e coffe channel s m Nespresso.co pod produ call ts paten ctio n center Nespresso facilities stores COST STRUCTURE REVENUE STREAMS B2C distrib sales of Nespress resso o production ution sales of Nesp marketing machines pods
- 87. but Nespresso almostfailed in 1987 due to a nonperforming business model
- 88. Nespresso’s 1987 Model KEY KEY Value CUSTOMER CUSTOMER PARTNERS ACTIVITIES Proposition RELATIONSHIPS SEGMENTS machine offices Nespresso manufacturer KEY system CHANNELS RESOURCES joint venture with machine manufacturer COST STRUCTURE REVENUE STREAMS
- 89. now Nestlé isbuilding a portfolio of business models in their coffee business
- 92.
- 96. prototype 2 alternatives and ask yourself what could be
- 97. ? letʼs takesome time to work on a really, really big issue in the world?
- 98.
- 99. 2.6 billion people lack access
- 100. 4 out of10 people in the world lack even the most simple latrine to perform their needs
- 103. * single-use toiletbag * self-sanitizing * biodegradable * turns into fertilizer * (mainly) targeted at poor people * low production cost * people already pay for sanitation
- 104. The Business ModelCanvas KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS KEY CHANNELS RESOURCES COST STRUCTURE REVENUE STREAMS
- 105.
- 106. come up withas many business model ideas as possible for the Peepoo bag (not full Canvases)
- 107. * single-use toiletbag * self-sanitizing * biodegradable * turns into fertilizer * (mainly) targeted at poor people * low production cost * people already pay for sanitation
- 108. make rough prototypes of the different alternatives to analyze, evaluate and compare them
- 109. F rank Ge hry [source: Sony Pictures]
- 112.
- 113.
- 114.
- 116. ? what does thathave to do with business models and my organization?
- 118. no architect would buildsomething that resembles his first sketch
- 119. ? what does that meanfor us?
- 120.
- 123. business model prototyping napkinsketch Canvas business case field test
- 124. “ prototyping is the conversation you have with your ideas ” Tom Wujec
- 125. evaluate 3 your business model design
- 126. building block building buildin block g blo ck building block building block build ing block building building block block build ing block building buil di block blo ng ck buildin g block
- 127. SWITCHING COSTS How easy or difficult is it for customers to switch to another company?
- 128. with this amazing device you can have thousand songs in a pocket
- 129. ...and you’r screwing us because it has just become more difficult to switch devices
- 130. RECURRING REVENUES Is every sales a new effort or will it result in follow-‐up revenues and purchases? How evenly distributed are your revenues through the year?
- 132. EARN BEFORE YOU PAY Are you earning money before you are spending it?
- 134. GAME CHANGING COST STRUCTURE Is your cost structure substanSally different and beTer than those of compeStors?
- 135. phone calls will be totally free in the future
- 136. GETTING OTHERS TO DO THE WORK How much does your business model get customers or third parSes to create value for you?
- 138. go ahead and share on your facebook page...
- 139. ...that will make my plaWorm more valuable...
- 140. ...and raise my plaWorm’s value(aSon)...
- 141. SCALABILITY How rapidly and how easily can you grow your business model without hi[ng roadblocks (e.g. infrastructure, customer support, etc.)?
- 143. VIRALITY/ NETWORK EFFECT How viral is your business model? How substanSal are the benefits to share with others?
- 145. PROTECTION FROM COMPETITION How much is your business model protecSng you from compeSSon?
- 146. a product/ technology focusis just not enough anymore
- 149.
- 150.
- 151. The Business ModelCanvas KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS KEY CHANNELS RESOURCES COST STRUCTURE REVENUE STREAMS
- 152. testing 4 business models with customer development
- 153. a business modelmight look great on paper... building block building buildin block g blo ck building block building block build ing block building building block block build block ing .. but after all it is only a... building buil di block blo ng ck buildin g block
- 154. ... a setof hypotheses guess guess guess guess guess guess guess guess guess guess g uess guess
- 155.
- 156. THANK YOU! BusinessModelGeneration.com AlexOsterwalder.com / @business_design BusinessModelAlchemist.com
- 157. BusinessModelGeneration.com/toolbox iPad stencil, actual scale, template by hortis, le studio. Feb. 2010. http://hortis.lestudio.ch date: project: screen: author: