ENTR4800 Class 3: Business Modelling for Social Enterprise

ENTR 4800: Social Entrepreneurship

Class 3: Business Modelling for Social Enterprise

Monday, September 27, 2010

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Instructors: Norm Tasevski ([email protected])

Karim Harji ([email protected])

© Norm Tasevski & Karim Harji



Agenda

•  Centre for Social Innovation •  What did we learn – Last Week? •  What are the components of a business model for

social enterprise? •  Talk – Assaf Weisz (ED, Young Social Entrepreneurs of

Canada) •  What did we learn – Today? •  Next week

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Last Week – What did we learn?

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Business Modelling for Social Enterprise…

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A Caveat…

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“Business Model”

“Business Plan”


A Second Caveat…

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When we business model for social enterprise, we focus on the “business”, not the “social”…

But don’t worry, we will come back to the “social” later…


A Third Caveat…

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We’ll be designing business models for…

…and…


freemium!

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user networks!franchising!

web ads!

licensing!micro-finance!retail!

subscription!

nonprofit (donation)!

open-source!loyalty!

solution shops!

etc…etc…etc…!


Some Definitions

•  “A business model describes the rationale of how an organization creates, delivers and captures value – economic, social, or other forms of value”

Wikipedia

•  “A description of the means and methods a firm employs to earn the revenue projected in its plans. It views the business as a system and answers the question, “How are we going to make money to survive and grow?”

BusinessDictionary.com

•  “A business model describes the specific way the business expects to make money. While a business plan is on paper (lots of paper!) a business model should be small enough to stay in the heads of the owner and staff. If a business model is on paper, it should be one page, and it would be more clearly shown as a diagram than as words.”

AudienceDialogue.net 11


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What you need to care about is… –  Customer “Pain” –  Customer Segmentation

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Who are Grameen Bank’s customers?

What does their Empathy map look like?


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What you need to care about is… –  The “value” you are creating for customers (in terms of products/services), and

the “pain” you are alleviating –  Customer Utility


Quick…

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What is the last thing you bought?


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What is Grameen Bank’s value proposition?


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What you need to care about is… –  Customer “touch points”


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How does Grameen Bank “touch” its customers?


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What you need to care about is… –  Customer acquisition and retention


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What relationships has Grameen Bank made with its customers?


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What you need to care about is… –  Cash!!! (specifically, how cash flows into the enterprise) –  Pricing models


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How does Grameen Bank bring in cash?


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What you need to care about is… –  Assets… –  …and how these assets create value


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What are Grameen Bank’s key assets?


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What you need to care about is… –  Actions (specifically, the actions you plan to take to generate value)


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What are Grameen Bank’s key activities?


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What you need to care about is… –  How you partner –  What you partner on

What makes a good partnership?

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Common Vision!

Discreet Missions!

Same Core Values!

A Commitment

to Invest in the

Partnership!


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Who does Grameen Bank partner with?


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What you need to care about is… –  Fixed costs, variable costs, economies of scale… –  …basically, all the stuff you learned in Finance class


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What does Grameen Bank’s cost structure look like (in simple terms)?


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So…how does your Business Model for Grameen Bank compare???


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$$!Micro-loans!

Personal!

Poor !Entrepr-

!

eneurs!

Branches!

Interest!

Rates!

Lending &!

Collecting!

$$!

-Branches!

-Brand!-Capital!

Govern-!

ment!

-People!

-Capital costs!


Tip…

•  Be a Business Model “Alchemist” – You need to go through the business model process many times in order to figure out which model best fits

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Break

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Assaf Weisz…

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What did we learn?

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Next Week

•  Hedvig Alexander – Have Questions Ready!!

•  Deliverable: The “revenue” side of your business model (and your motivations, mission, vision and values)

•  Readings

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Notes

–  The business model template and process presented herein is based in on Alexander Osterwalder’s Business Model Canvas (www.businessmodelgeneration.com)

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