Business model canvas explaination

Business Model Canvas Explaination

Center for Entrepreneurial DevelopmentIBA – Karachi

What’s A Company?

What’s A Company?

A business organization which sells a product or service in exchange for revenue and profit

How Are Companies Organized?

How Are Companies Organized?

Companies are organized around Business Models

What’s a Business Model?

What’s a Business Model?

A business model describes all the parts of the company necessary to make money

What About My Technology?

What About My Technology?

Your technology is one of the many critical pieces necessary to build a company.

It is part of the “Value Proposition”

What About My Technology?

Customers don’t care about your technologyThey are trying to solve a problem

What’s A Startup?

What’s A Startup?

A startup is a temporary organization designed to search for a repeatable and scalable business model

How to Build A Startup

IdeaBusiness ModelSize Opportunity

Customer Development

How to Build A Startup

Idea Business Model(s)

Size of the Opportunity

Customer Discovery

Customer Validation

How to Build A Startup

Idea Size of the Opportunity

Business Model(s)

Customer Discovery

Customer Validation

Theory Practice

Business Model(s)

Size of the Opportunity

How to Build A Startup

Idea Size of the Opportunity

Business Model(s)

Customer Discovery

Customer Validation

• Web startups get the product in front of customers earlier

Business Model(s)

Size of the Opportunity

?what is the most powerful about using a shared language, such as the Business Model Canvas?

?What will happen if you don’t have Business Model and you want to discuss you business with your team?

?A business model describes all the parts of the company necessary to make money

?what are those parts? what parts is a business model composed of?

Business Model Canvas

to describe, challenge, design, and invent business models more systematically

building blocks 9

CUSTOMER SEGMENTS

images by JAM

The Customer Segments Building Block defines the different groups of people or organizations an enterprise aims to reach and serve

Customer groups represent separate segments if:• Their needs require and justify a distinct offer• They are reached through different Distribution Channels• They require different types of relationships• They have substantially different profitabilities• They are willing to pay for different aspects of the offer

For whom are we creating value?

Who are our most important customers?

Different types of Customer Segments

Types of Customer Segments

Mass Market Niche Market Segmented DiversifiedMulti-sided platforms

(or multi-sided market)

VALUE PROPOSITIONS

images by JAM

“The Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment.”

• Some Value Propositions may be innovative and represent a new or disruptive offer.

• Others may be similar to existing market offers, but with added features and attributes.

What value do we deliver to the customer?

Which one of our customer’s problems are we helpingto solve?

Which customer needs are we satisfying?

What bundles of products and services are we offeringto each Customer Segment?

VALUE PROPOSITIONS

images by JAM

Customer Value Creation List• Newness• Performance• Customization• Getting the job done• Design• Brand/status• Price• Cost reduction• Risk Reduction• Accessibility• Convenience/usability

Values• Quantitative • Qualitative

CHANNELS

images by JAM

“The Channels Building Block describes how a company communicates with and reaches its Customer Segments to deliver a Value Proposition.”

Channels serve several functions, including:• Raising awareness among customers about a company’sproducts and services• Helping customers evaluate a company’s Value Proposition• Allowing customers to purchase specific products and services• Delivering a Value Proposition to customers• Providing post-purchase customer support

Through which Channels do our Customer Segments want to be reached?

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?

Channel Types & Phases

CUSTOMER RELATIONSHIPS

images by JAM

“The Customer Relationships Building Block describes the types of relationships a company establishes with specific Customer Segments.”

Customer relationships may bedriven by the following motivations:• Customer acquisition• Customer retention• Boosting sales (upselling)

What type of relationship does each of our CustomerSegments expect us to establish and maintain with them?

Which ones have we established?

How costly are they?How are they integrated with the rest of our business model?

CUSTOMER RELATIONSHIPS

images by JAM

Categories of Customer Segments1. Personal Assistance2. Dedicated Personal Assistance3. Self Service4. Automated Service5. Communities6. Co-creation

REVENUE STREAMS

images by JAM

“The Revenue Streams Building Block represents the cash a company generates from each Customer Segment (costs must be subtracted from revenues to create earnings)”

A business model can involve two different types of Revenue Streams:1. Transaction revenues 2. Recurring revenues

For what value are our customers really willing to pay?

For what do they currently pay?

How are they currently paying?

How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?

REVENUE STREAMS

images by JAM

Ways to generate Revenue Stream1. Asset Sale2. Usage fee3. Subscription fees4. Lending/Renting/Leasing5. Licensing6. Brokerage fees7. Advertisemement

Pricing Mechanism

KEY RESOURCES

images by JAM

“The Key Resources Building Block describes the most important assets required to make a business model work.”

These resources allow an enterprise to:• Create • Offer a Value Proposition• Reach markets• Maintain relationships with Customer Segments• Earn revenues.

What Key Resources do our Value Propositions require?

Our Distribution Channels?

Customer Relationships?

Revenue Streams?

KEY RESOURCES

images by JAM

Key Resources are Categorised into:1. Physical2. Intellectual3. Human4. Financial

KEY ACTIVITIES

images by JAM

“The Key Activities Building Block describes the most important things a company must do to make its business model work “

These resources allow an enterprise to:• Create • Offer a Value Proposition• Reach markets• Maintain relationships with Customer Segments• Earn revenues.

What Key Activities do our Value Propositions require?

Our Distribution Channels?

Customer Relationships?

Revenue streams?

KEY ACTIVITIES

images by JAM

Key Activities are Categorised into:1. Production2. Problem Solving3. Platform/network

KEY PARTNERS

images by JAM

“The Key Partnerships Building Block describes the network of suppliers and partners that make the business model work.”

Four different types of partnerships:1. Strategic alliances between non-competitors2. Coopetition: strategic partnerships between competitors3. Joint ventures to develop new businesses4. Buyer-supplier relationships to assure reliable supplies

Who are our Key Partners?

Who are our key suppliers?

Which Key Resources are we acquiring from partners?

Which Key Activities do partners perform?

KEY PARTNERS

images by JAM

Three motivation for creating Partnership1. Optimization and economy of scale2. Reduction of risk and uncertainty3. Acquisition of particular resources and activities

COST STRUCTURE

images by JAM

“The Cost Structure describes all costs incurred to operate a business model.”

What are the most important costs inherent in our

business model?

Which Key Resources are most expensive?

Which Key Activities are most expensive?

COST STRUCTURE

images by JAM

Cost Structures can have the following characteristics: Fixed Cost | Variable Cost | Economies of Scales |Economies of Scope

Business model Cost Structures:1. Cost-driven 2. Value-driven

images by JAM

customer segments

key partners

cost structure

revenue streams

channels

customer relationships

key activities

key resources

value proposition

images by JAM

customer segments

key partners

cost structure

revenue streams

channels

customer relationships

key activities

key resources

value proposition

images by JAM

But,Realize They’re Hypotheses

9 Guesses

Guess Guess

GuessGuess

GuessGuess

Guess

GuessGuess

CANVAS OVERLAY

images by JAM

OFFER

CHANNELS

CUSTOMER RELATIONSHIPS

CUSTOMERSEGMENTS

REVENUE STREAMSCOST STRUCTURE

KEYACTIVITIES

KEYPARTNERS

KEYRESOURCES

images by JAM

CANVAS OVERLAYOFFER

CHANNELS

CUSTOMER RELATIONSHIPS

CUSTOMERSEGMENTS

REVENUE STREAMSCOST STRUCTURE

KEYACTIVITIES

KEYPARTNERS

KEYRESOURCES

Idea: A renren app that facilities event meeting in China collegesUser size: 20 million college students in China

Serviceable Addressable Market: US$ 100 millionCustomer Interviewed: 154

Online Surveyed: 48

ZiiLion

Sources• Stanford Technology Venture Program• Steve Blank’s Lectures• Chuck Eesley’s Lectures

EXAMPLES

Diabetics

Sweet Sensors Yi Lu, Tian LanNeil KaneChris Sorensen

Business Model Canvas

Clinicians (in rural area)Triage nurses

Pre-diabetics

Product supports

Patient network/community

Retailers (Walgreen)

Online vendors (Amazon)

Direct sales

Disposable test kit (used repeatedly on a regular basis)

At home

Convenient

Less exposure to infectious diseases in the hospitalCheaper

More frequent

Better indicator of health (diabetic management)

Conferences

Product R&DQC

Marketing

IP

Personnel

Glucose monitor manufacturers

Kit manufacturers

Reagent suppliers

Reagents

ManufactureLicensing

FDA certification?

Diabetics

Sweet Sensors Yi Lu, Tian LanNeil KaneChris Sorensen

Action Plan

Clinicians (in rural area)Triage nurses

Pre-diabetics

Product supports

Patient network/community

Retailers (Walgreen)

Online vendors (Amazon)

Direct sales

Disposable test kit (used repeatedly on a regular basis)

At home

Convenient

Less exposure to infectious diseases in the hospitalCheaper

More frequent

Better indicator of health (diabetic management)

Conferences

Product R&DQC

Marketing

IP

Personnel

Glucose monitor manufacturers

Kit manufacturers

Reagent suppliers

Reagents

ManufactureLicensing

FDA certification?

General methodology for adding fluorine to

lead compounds of interest

The Business Model Canvas

Accessibility (RCY)PuritySpeedPET/SPECTMultiplatformSensitivity (nca)Specific compounds

IPPoP dataRegulatory planUnderstanding of the regulatory process

Contract cGMP precursor manufactureSalary, RentsClinical trials

SOPs for precursors and drugsRecruit clinical sitesIn vivo animal studiesDevelop regulatory plan for pre IND meetingID cGMP CROFund-raising

cGMP manufacturerRadiopharmaciesNuclear Medicine and Radiology departments

Technical Assistance (Image Atlas)FDA regulatory support

Radiopharmacies

Equipment producers

Prescribing physicians

Radiologist who perform studies

Sales of intermediates

Technology license

Product license (royalty)

Direct sales of precursor

R&D and clinical studies presented in journals and meetings

Drug developers

Pharmaceutical development companies

IPPoP data

Radiologists

Technical assistance

General methodology for adding fluorine to

lead compounds of interest

The Business Model Canvas

Accessibility (RCY)PuritySpeedPET/SPECTMultiplatformSensitivity (nca)Specific compounds

IPPoP dataRegulatory planUnderstanding of the regulatory process

Contract cGMP precursor manufactureSalary, RentsClinical trials

SOPs for precursors and drugsRecruit clinical sitesIn vivo animal studiesDevelop regulatory plan for pre IND meetingID cGMP CROFund-raising

cGMP manufacturerRadiopharmaciesNuclear Medicine and Radiology departments

Technical Assistance (Image Atlas)FDA regulatory support

Radiopharmacies

Equipment producers

Prescribing physicians

Radiologist who perform studies

Sales of intermediates

Technology license

Product license (royalty)

Drug developers

Pharmaceutical development companies

IPPoP data

Radiologists

Technical assistance

Direct sales of precursor

R&D and clinical studies presented in journals and meetings

Sales of precursor through global finished pharmaceutical distributor