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Business Model Canvas (workshop at IIM Ahmedabad)

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Business Model Canvas (workshop at IIM Ahmedabad)

  1. 1. Business Model Canvas- A one sheet summary of your venture -Krishnan + Nag, IIMA CIIE, Sep „12
  2. 2. Story of the $5billion start-up
  3. 3. Cautionary tale
  4. 4. 1987 1990 1997 1998 $5.2b investmentIridium Spun out Launch Bankrupt 15 rocketsfounded of 72 satellites Motorola
  5. 5. Target price: $7/min Viable price: $0.5/minTarget users: 42million Actual users: 30,000 1987 1990 1997 1998 $5.2b investmentIridium Spun out Launch Bankrupt 15 rocketsfounded of 72 satellites Motorola
  6. 6. Traditional start-up model Build product Big-BangDevelop concept Build product Alpha /test Alpha beta Customer test Launch after Shipment Get funding and offering Market test 3 yearsWrite business plan Build the product Test / fix Ship / fix Planning / collateral PR / plan launch Launch / Demand gen. Initial sales rep Build sales team / selling
  7. 7. “Big Up Front Design”Develop concept Build product Build product Alpha /test Alpha beta Customer Big-Bang Get funding and offering test Market test Shipment LaunchUnbridled False sense of Rude Resetting Predictableenthusiasm security awakening expectations disaster
  8. 8. The traditional methods of start-ups aren‟t working 90-95% of new ventures fail to meet projections (assumptions up front, market contact at the end)
  9. 9. Story of the Rs. 500 start-up
  10. 10. Who is this legendary entrepreneur? Karsanbhai Patel Nirma
  11. 11. How do you compete with a Rs. 200cr brand? Answer: Start on a bicycle!
  12. 12. Lessons from Karsanbhai and Nirma Start with a strong vision, but start small Clear value-prop for untapped segment Constantly validate all assumptions in the market Iterate and learn
  13. 13. 2 stages of start-ups Search ScaleFocus on Focus onExperimentation ExecutionSource: Steve Blank
  14. 14. Finding your business modelLimited planning, more experimentation and exploration
  15. 15. Search Principle # 1: Business Model Canv KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS PROPOSITION KEY RESOURCES CHANNELS COST STRUCTURE REVENUE STREAMSSource: “Business Model Generation”, Osterwalder & Pigneur
  16. 16. Search Principle #2: Minimum Viable Product Minimum + Viable Fertile area for new products Minimum ViableToo-basic products Incumbentno one wants products
  17. 17. Excel competitor: Minimum Viable ?
  18. 18. Minimum Viable ?
  19. 19. Minimum Viable Product for Google Docs Value prop
  20. 20. Search Principle #3: Focus on exploration Ideas (BMC) Learn Build Minimise the total time through the loop Data Offering Measure
  21. 21. How it all fits togetherAgile software development
  22. 22. BMC examples…
  23. 23. What are the children carrying? Godrej ChotuKool
  24. 24. Vision: “Refrigeration for rural India” KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES PROPOSITION RELATIONSHIPS SEGMENTS R&D ThroughMicrofinance PR retailers Indianinstitutions Advertising Economical, households effective, with incomeSarpanchs portable KEY of RESOURCES cooling CHANNELS Rs.10,000/m solution o whom Frugal Rural retailers Village traditional engineering (constraints of electricity, ambassadors refrigerators experts space, cost don‟t serve solved) COST STRUCTURE REVENUE STREAMS Factory, raw material, SG&A Unit sales
  25. 25. Competitive BMCs vs.
  26. 26. FlipkartKEY KEY VALUE CUSTOMER CUSTOMERPARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS PROPOSITION KEY RESOURCES CHANNELSCOST STRUCTURE REVENUE STREAMS
  27. 27. Flipkart: “Online shopping for all Indians” KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS • Supply chain optimisation PROPOSITION Through email, onlinePublishers • Delivery optimisation chat and database • Urban Indian • SEO marketing • Convenience book lovers • Auto recommendations • Wide selection • Cheaper • Internet- • Trust (CoD) connected KEY people with no RESOURCES CHANNELS credit cards • Delivery staff Web • Technology • First-time capability online shoppers COST STRUCTURE REVENUE STREAMS Book sales Technology, warehouses, deep discounts
  28. 28. CrosswordKEY KEY VALUE CUSTOMER CUSTOMERPARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS PROPOSITION KEY RESOURCES CHANNELSCOST STRUCTURE REVENUE STREAMS
  29. 29. Crossword: “The best browsing experience” KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS • Sourcing PROPOSITION In store, Crossword• Publishers • Visual merchandising club• Franchisees • Urban Indian • Book reading sessions• Shopper‟s Stop • Browsing book lovers • Crossword Literary (parent co) Award experience • Instant gratification • Companies KEY • Stationery RESOURCES CHANNELS buyers • Real estate • Store • Phone • Casual mall • Web visitors • Institutional COST STRUCTURE REVENUE STREAMS • Book • Coffee Real estate, cost of inventory sales • Trinkets • Advertisin g
  30. 30. Amul: “High-quality butter when you desire it” KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS • Brand building PROPOSITION • Transactional• Anand milk • R&D into preservation • Through mass union • Mass market media (customer:• Gujarat milk • Guarantee of high federation quality (brand) housewife) • Access and availability • Restaurants KEY and institutions • Convenience CHANNELS RESOURCES • Emotional value • Anand milk union • Retail trade • Direct (for institutional sales) COST STRUCTURE REVENUE STREAMS • Product sales Factory, equipment, inventory
  31. 31. Mid Day: “Evening gossip companion” KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS • Brand building PROPOSITION • Distribution • Transactional • Mumbai• PTI, AP etc. • Deep multi-year • Newsgathering English- high-touch • Light speaking mass • Improving ABC numbers relationships market entertainment in key demographics after/during a busy • Office-goers day • Commuters KEY • “2nd newspaper” CHANNELS RESOURCES Advertisers + • Journalists • Mumbai-wide • Railway platforms Agencies: reach of readers in • Kirana shops • Mass market • Salespeople with a relaxed context • Mumbai media-planning in a unique time • Direct • Classified knowhow window • Discount COST STRUCTURE REVENUE STREAMS • Retail offtake (5%) Newsroom, newsprint • Advertising (95%)
  32. 32. Khan Academy: “Education for everyone” KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS • Pedagogy research PROPOSITION Deep personalisation• Gates • Content creation (automated) • School/college Foundation • Content delivery• Hardware • Comprehensive age students • Business model makers? world-class with discovery• Governments? lessons for free inadequate• Volunteer access to KEY school/college translators • Personalised, self- CHANNELS RESOURCES directed learning • Content creators • PC/tablet • Working • Recommendation • Smartphone people with engines etc. • Featurephone specialised • Salman Khan – learning needs personal brand • School/college students COST STRUCTURE REVENUE STREAMS* seeking • Certifications? • Placements? reinforcement Hardware, bandwidth, content creation • Advertising *this could be a multi-sided market: students, advertisers, recruiters
  33. 33. Pivot / Course correction
  34. 34. Acknowledgementswww.businessmodelgeneration.com www.steveblank.com
  35. 35. Summary: why BMCs are important Elevator pitch Maximise time from mentors Make minimum viable offering, learn, pivot, iterate The foundation for your business plans
  36. 36. Continue the conversation…knataraj@thoughtworks.com, nag@thoughtworks.com LinkedIn: krishnan-natarajan, knagarjun

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