Lecture on Business Model Generation @ Zeppelin University

Lecture on E-Business Models @
Zeppelin University, 09.28.2012
1

01 What is a b_model?
02 Building blocks of a b_model
03 Create a b_model
04 Example b_models

Q&A Q&A

Q&A Q&A

Q&A Q&A

Q&A

What is a
Business Model?

Business Model Lecture | © 2012 relevantive AG

Group work!
What is a
business model?
Business Model LectureImage curtsey: http://1.bp.blogspot.com/-ZVgDabCg3z0/UDKCBR_JJlI/AAAAAAAAAvI/7cnvydrHZKA/s1600/IMG_1183.JPG
| © 2012 relevantive AG

Bla

Bla

Bla Bla Bla

Image curtsey: http://1.bp.blogspot.com/-Z1uan5VaCzA/Ty9mLiltA3I/AAAAAAAAFXU/7WD9NGjYp3k/s1600/business-meeting.jpg

Day Month Year

No.

Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value?
Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers?
Which Key Resources are we acquiring from partners? Customer Relationships? What bundles of products and services are we offering to each Customer Segment? Which ones have we established?
Which Key Activities do partners perform? Revenue streams? Which customer needs are we satisfying? How are they integrated with the rest of our business model?
How costly are they?

What Key Resources do our Value Propositions require? Through which Channels do our Customer Segments
Our Distribution Channels? Customer Relationships? want to be reached?
Revenue Streams? How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?

What are the most important costs inherent in our business model? For what value are our customers really willing to pay?
Which Key Resources are most expensive? For what do they currently pay?
Which Key Activities are most expensive? How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?

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Day Month Year

No.

Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value?
Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers?
Which Key Resources are we acquiring from partners? Customer Relationships? What bundles of products and services are we offering to each Customer Segment? Which ones have we established?
Which Key Activities do partners perform? Revenue streams? Which customer needs are we satisfying? How are they integrated with the rest of our business model?
How costly are they?

What Key Resources do our Value Propositions require? Through which Channels do our Customer Segments
Our Distribution Channels? Customer Relationships? want to be reached?
Revenue Streams? How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?

What are the most important costs inherent in our business model? For what value are our customers really willing to pay?
Which Key Resources are most expensive? For what do they currently pay?
Which Key Activities are most expensive? How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?

This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

Business BIG thanks to Alex Osterwalder! You can download the here: http://www.businessmodelgeneration.com/downloads/business_model_canvas_poster.pdf
Model Lecture | © 2012 relevantive AG

Key Partner Key Activities Value Channels Customer
Proposition Segment

Key Customer
Resources Relationship

Cost Structure Revenue Streams


Value Proposition

Newness

Business Model Lecture | © 2012 relevantive AG http://www.ﬂickr.com/photos/72439897@N02/6623264623/sizes/l/in/photostream/
Image curtsey:

Value Proposition

Performance

Image curtsey: http://www.babez.de/wp-content/myfotos/bf-performance-gt660/bf-performance-gt-660-02.jpg

Value Proposition

Customization

http://weirdnews.about.com/od/weirdphotos/ig/Geoff-Ostling-Tattoos/Armpit.htm

Value Proposition

Getting things done

http://capmembers.com/media/cms/working_together_in_space_hires_E77D1F50E1332.jpg

Value Proposition

Design, UX, CX

http://3.bp.blogspot.com/_wuUoxyO0BNI/TCsb1xIOeuI/AAAAAAAAIWw/k9ph1nqXj2w/s1600/P1040804.JPG

Value Proposition

Price

Business Model Lecture | © 2012 relevantive AG http://www.gemeinde-asbach.de/img/ALDI.JPG

Value Proposition

Cost reduction

Business Model Lecture | © 2012 relevantive AGhttp://cdn.physorg.com/newman/gfx/news/hires/2012/1-containershi.jpg

Value Proposition

Risk reduction

Business Model Lecture | http://ﬁles.mercedes-fans.de/images/2010/09/mercedes-benz-hightech-airbag-gurtstraffer-w126-innovationtf012.jpg
© 2012 relevantive AG

Value Proposition

Accessibility

http://www.airlinereporter.com/wp-content/uploads/2010/10/airlines1.jpg

Customer Segment

Mass market

Business Model Lecture |http://1.bp.blogspot.com/-wYRDKwwuvZk/Tq6Esx2CoAI/AAAAAAAABkg/d7jEc7vPzT0/s1600/Crowd_Obama_Inauguration_Day_Big.jpg
Image curtsey: © 2012 relevantive AG

Customer Segment

Niche Market

Image curtsey: http://www.trashness.com/wp-content/uploads/2012/06/preppy-hipster.jpg

Customer Segment

Segmented

Business Model Lecture | © 2012 relevantivehttp://www.kotorikits.com/ekmps/shops/mummymadeit/resources/Design/father-and-son.jpg
Image curtsey: AG

Customer Segment

Diversiﬁziert

Business Model Lecture curtsey:http://4.bp.blogspot.com/-ECdDDi3kO50/TaHu-p5cQcI/AAAAAAAAAAM/np6_jKgDQ0U/s1600/Farmers-Market-foods.jpg
Image | © 2012 relevantive AG

Customer Segment

Multi Sided

Business Model Lecture | © 2012 relevantive AG Image curtsey: http://landarzt.ﬁles.wordpress.com/2008/10/pillen.jpg

Key Activities Customer
Segment

Key
Ressources

Channels

Serving the
customer

Key Activities Customer
Channel Types Channel Phases Segment

01 02 03 04 05
Awareness Evaluation Purchase Delivery After sales
Sales force

Own Web SalesKey
Ressources

Own Store

Partner
Store
Partner
Wholesaler

Customer relationships

Personal
assistance

http://www.entrepreneur-resources.net/wp-content/uploads/2011/10/remote-call-center-agent.jpg


Dedicated
Personal
assistance
http://www.bruchsal.org/sites/default/ﬁles/1_40_Jahre_Dinner_for_one.jpg


Self-service

Business Model Lecture | © 2012 relevantive AG http://erickadukes.com/site/wp-content/uploads/2011/02/IMG_3889.jpg


Automated
service



Communities



Co-creation
(directly)



Co-creation
(indirectly)


Revenue Streams

Service Sales


Revenue Streams

Subscription


Revenue Streams

Retail


Revenue Streams

Commision


Revenue Streams

Licensing


Revenue Streams

Advertising


Revenue Streams

Renting


KP KA VP C CS

KR CR

CS RS


BM


7 B_Models


B_model: Service sales

Skype


Subscription: Skype
Proposition Segment

Free calls
(almost), chat Mass market
and video.
Key Easy to use. Customer

Cost like an internet Prepaid. Fee for
company ﬁxed line calls

Subscription: Skype
Anybody with
internet.
Proposition Segment

Disruptive value Free calls
proposition. (almost), chat Mass market
and video.
Key Easy to use. Customer
Small percentage of paying
„Same“ product than telco costumers, but large
but different cost structure. customer base

Subscription: Skype
Anybody with
internet.
Proposition Segment

Disruptive value Free calls
proposition. (almost), chat Mass market
and video.
Not beeing able to
Key Customer
Easy to use. scale or monetize.
Small percentage of paying
„Same“ product than telco costumers, but large
but different cost structure. customer base

B_model: subscription

XING


Subscription: XING
Proposition Segment

Network for
Professionals
professionals

Key Access to Customer
Resources Headhunter
professionals Relationship

Yearly subscription fee
Usage fee

Subscription: XING
Proposition Segment
Lock in and network effects
Network for
Professionals
professionals

Key Access to Customer

Most people forget, that
they are subscriber.
Usage fee

Subscription: XING
Proposition Segment
Lock in and network effects
Network for
Professionals
professionals
RISK: Beliefe that people like
to be held captive. Value for
the customer ➔ Usage!Key Access to Customer

Most people forget, that
they are subscriber.
Usage fee

Retail: Amazon
Proposition Segment
Best prices,
recommonda
tion, trust Mass market
and zero
Key shipping Customer
Resources costs and Relationship
retour.

Selling
Online and ofﬂine (logistics).
ownership.

Retail: Amazon
Proposition Segment
Best prices,
recommonda
tion, trust Mass market
and zero
retour.
Logistic cost are critical to
be proﬁtable.
Selling
ownership.

Retail: Amazon
Proposition Segment
Risk: Treating Best prices,
online like ofﬂine. recommonda
Hight return costs. tion, trust Mass market
Low margin: 0-3%.
and zero
retour.
Logistic cost are critical to
be proﬁtable.
Selling
ownership.

Commision: ebay
Proposition Segment

Buying
Buyer
Products

Key Selling Customer
Resources Relationship Seller
products

Post auction fee
Pre auction fee

Commision: ebay
Proposition Segment

Buying
Buyer
Products
Create
diverse and
Trustworthy Key Selling Customer
great no. of
transactions Resources
for private Relationship Seller
and professional sellers products offers

Post auction fee
Pre auction fee

Commision: ebay
Proposition Segment

Attractive products Buying
and prices Buyer
Products
Create
diverse and
Trustworthy Key Selling Customer
great no. of
transactions Resources
for private Relationship Seller
and professional sellers products offers

Thinking your clients won’t
deal behind your back
Post auction fee
Pre auction fee

Licensing: apps
Proposition Segment

Product
Buyer
solving a pain
and creating
Key a gain Customer


License fee


Licensing: apps
Proposition Segment
Matching hypothesis/ Product Deep
assumption and with real domain Buyer
solving a pain
market demand. knowledge
and creating
Key a gain Customer


License fee


Licensing: apps
Proposition Segment
Matching hypothesis/ Product Deep
assumption and with real domain Buyer
solving a pain
market demand. limited knowledge
Risk: Value for a and creating
Key
amount of customers.
a gain Customer
Beeing an agency.

Risk: One product
and one customer.

Transaction Fee


Advertising: Google
Valuable
Proposition Segment
service and
information
User
for free.

Key Customer
Resources Targeted ads. Relationship Advertiser

Free product.
Performace fee.

Advertising: Google
Key Partner Key Activities
Building trust and
Value Channels Customer
Valuable
highly involved users Proposition Segment
service and
information
User
for free.

Key Customer
Resources Targeted ads. Relationship Advertiser

People pay with
their usage.

Free product.
Performace fee.

Advertising: Google
Key Partner Key Activities
Building trust and
Value Channels Customer
Valuable
highly involved users Proposition Segment
service and
information
User
for free.

Key
Invading people’s
Customer
Resources
space or privacy. Targeted ads. Relationship Advertiser

People pay with
their usage.

Free product.
Performace fee.

Renting: Dirve now
Proposition Segment

Individual
Commuter
mobility.

Key Customer


Renting/usage fee


Renting: Dirve now
Proposition Segment
Granting someone Individual
the exclusive right to Commuter
mobility.
use a particular
asset for a ﬁxed
period of time
Key Customer


Renting/usage fee


Renting: Dirve now
Proposition Segment
Granting someone Individual
the exclusive right to Commuter
mobility.
use a particular
asset for a ﬁxed
period of time
Key Customer
Underestimate
fraud


Renting/usage fee


Failed B_Models:
Netﬂix, HiGear.com,
giga.de

Launching new product
by merging 2 existing.

Loosing 1.000.000
customers due to bad
pricing strategy.


Netﬂix
Stock price Netﬂix: Jan 2010 - Jun 2011: +386%

What could possibly go wrong?


Merging 2 b_models:
Netﬂix + Qwikster


Product Netﬂix
Proposition Segment
Movie
Customer
streaming
(Massmarket)
service
Key Customer


$7,99/month

Product Qwikster
Proposition Segment

Customer
DVD by mail
(Massmarket)
Key Customer


$7,99/month

Qwikster Almost 1.000.000
clients left
Proposition Segment
Netﬂix tried to split branding
but had to cancel the operation Combi DVD
Customer
by mail +
(Massmarket)
Brand name “-ster” referred to streaming
other failed internet brands.
Key Customer

Price raise of +60% for
bundle to competition
$15,98/
month

Netﬂix no. of
subscribers
Really bad!


Netﬂix stock
price -200%


Members can rent out
luxury cars to each
other.

Many refer to Higear
as the AirBnB* of cars.

Airbnb.com
Proposition 2011, Some travelersSegment
In June trashed and
vandalized 2 apartments of AirBnB

Matchmaking Renter
Key
After a huge PR crisis, service: Customer
Resources
AirBnb introduced a $50K Relationship Visitor
Room for
insurance policy.
money

6%-12%
commission

HiGear.com
Proposition Segment
Criminal ring stole 4
vehicles worth $400.000

Matchmaking
Renter
service:
After a PR nightmare Key Customer
Luxury car Visitor
Resources
Higear had to close down at Relationship
the start of 2012.
for rent for
1/2 price of
regulat rent.

30%
commission

sebastian.ﬁttko@relevantive.de
twitter @forstartups

Lecture on Business Model Generation @ Zeppelin University

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