Business Model 101

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Presented by Heojong Nam
MinSeung Ko
Steven Jong Yeon Lee
Youssef Mrad

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Outline 1. Business Model Canvas
2. Data Collection & Analysis
3. Problem Articulation
Theme Selection & Key Variables
Time Horizon
Dynamic Problem Definition
4. Formulation of Dynamic Hypothesis
Hypothesis Generation
Factors – Endogeneous & Exogeneous
Mapping – Boundary diagram, Subsystem, Causal Diagram
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Business
Model
Canvas

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Data
Collection
&
Analysis
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3 Big picture of Data analysis
2. Data analysis
3. Interview with Expert in
the field
Demographics & Psycho state Analysis
1. Questionnaire
Interview with professionals to draw abstract
model for the business model.

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Problem
Articulation
Theme Selection
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Checking the viability of the proposed business.
<External situation of energy market >
a. Government subsidy & Regulation b. Technological development: Efficiency increased
The market Analysis:
The innovative & ecofriendly industry with rising demand

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Problem
Articulation
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Based on external factors, research about internal factors are conducted through individual
questionnaire.
Initial hypothesis of main variables:
1. Participants have large consumption of electricity
2. High income group
3. Large consumption on electricity correlate with attitude
towards expensive
4. Main consumers are those who use large so desire to save
electricity bill.
However, the result
Income*Participation = Irrelevant
Consumption of Electricity*Participation = Irrelevant
Consumption of Electricity*Attitude = Irrelevant
c.f) Respondents with small electricity usage still feel their
electricity bill is expensive
Theme Selection

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Problem
Articulation
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- Newly defined key variables for consumer
Driven by profi
Demographics
• Middle-Old aged • Male • Lower-
Middle class income
Awareness
• Background knowledge of solar
energy
Driven by profit
• Interested in making profits rather
than saving electricity bill.
Profit is deemed as main dependent variable
Attitude towards electricity bill*Compensation = Respondents with small
electricity bill still want to join the business as long as there is profit for them.
Theme Selection

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Problem
Articulation
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- Variables to consider
1) External variables
2) Internal variables
Universal: Global economy, Technological change, Geographical
Limit, Environmental agreement
Government – subsidiary, tax rate
KEPCO – Electricity price, Battery price, REC Market value
Production
Complexity of contracts w/ individuals
Customer pool: Demographics, Awareness, Profits
Theme Selection

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Problem
Articulation
Key Variables
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 Number of users
• The number of people who are using our services and installing the solar
panels in their homes.
 Solar panel price
• The price at which solar panels are acquired by our company, either from
the manufacturer or a secondary vendor.
 REC weight
• The rate of the Renewable Energy Certificate (REC) that favors energy
produced in environmentally-friendly ways over traditionally produced
energy
 Electricity produced
• Amount of electricity generated as a whole by solar panels
 SMP Price
• Fixed rate at which electricity is charged by central power company
Key variables

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Problem
Articulation
Time Horizon
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 Past:
There is no need to go back because
the goal of the model is to show
viability of future business.
 Future:
The model will look at two cycles of
lease-repayment of solar panels to
customers.
Perception of Problem
 Rough Calculation:
 Estimated revenue (per customer):
REC sales + Reduction of electric bill (SMP)
3000/month+1800/month
 Estimated cost (per customer):
Price of REC + Installation fee + Maintenance
100,000+20,000+2000/month
 Estimated period of return: About 4 years
Lease Cycle
Reference Modes
Time (months) 48 months
Number of
users,
Electricity
produced
Time (months) 48 months
SMP price,
REC weight

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Problem
Articulation
Dynamic Problem Definition
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How is the profit viability of our proposed new business, Green
Sunlight, affected by various factors in terms of revenue and costs?

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Formulation
Of
Dynamic
Hypothesis
Hypothesis Generation
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Formulation of Hypothesis on ‘Number of Customers’
1. There is no existing pattern between income level and participation.
2. Those who have prior interest in solar energy (e.g. with knowledge in Tokyo Protocol and solar cells) have
a larger tendency to participate in our Green Energy Grid Project.
3. Those who live in less urbanized areas are more likely to show interest.
4. Those who have vacant space will use more electricity.
5. Those who feel the electricity bill is expensive may have higher electricity usage.
Local Hypothesis
1. There is a positive relationship between number of customers and revenue from REC sales.
2. As the revenue shared to customers goes up, the overall number of customer also goes up.
3. The overall cost of solar panels increase as the number of customers go up, but at a much
slower rate due to economics of scale.
4. As an end goal, the increase in our profit and increase in number of customers will lead to
increased value creation for society, and in addition will lead to positive feedback from
society in general to our business.
5. As total electricity produced by our customers increases, the REC weight will go through a
period of decline and then a period of stabilization.
General Hypothesis

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Factors – Endogenous, Exogenous
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Formulation
Of
Dynamic
Hypothesis

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Mapping – Model Boundary Diagrams
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Presented by Prezi
Formulation
Of
Dynamic
Hypothesis

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Mapping – Model Boundary Diagrams
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Presented by Prezi
Formulation
Of
Dynamic
Hypothesis

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Subsystem & Causal Diagrams
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Presented by Prezi
Formulation
Of
Dynamic
Hypothesis

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Appendix
A
Survey Procedures & Results
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Appendix
B
Future Survey Questionnaire
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More detail research plan to prove the validity of our hypothesis
(Questionnaire New version)