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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
© Norm Tasevski & Karim Harji
© 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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© Norm Tasevski & Karim Harji
Last Week – What did we learn?
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Business Modelling for Social Enterprise…
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© Norm Tasevski & Karim Harji
A Caveat…
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“Business Model”
“Business Plan”
© Norm Tasevski & Karim Harji
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…
© Norm Tasevski & Karim Harji
A Third Caveat…
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We’ll be designing business models for…
…and…
© Norm Tasevski & Karim Harji
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…!
© Norm Tasevski & Karim Harji
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
© Norm Tasevski & Karim Harji
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© Norm Tasevski & Karim Harji
What you need to care about is… – Customer “Pain” – Customer Segmentation
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© Norm Tasevski & Karim Harji
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© Norm Tasevski & Karim Harji
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Who are Grameen Bank’s customers?
What does their Empathy map look like?
© Norm Tasevski & Karim Harji
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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
© Norm Tasevski & Karim Harji
Quick…
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What is the last thing you bought?
© Norm Tasevski & Karim Harji
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© Norm Tasevski & Karim Harji
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What is Grameen Bank’s value proposition?
© Norm Tasevski & Karim Harji
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What you need to care about is… – Customer “touch points”
© Norm Tasevski & Karim Harji
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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
© Norm Tasevski & Karim Harji
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What relationships has Grameen Bank made with its customers?
© Norm Tasevski & Karim Harji
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What you need to care about is… – Cash!!! (specifically, how cash flows into the enterprise) – Pricing models
© Norm Tasevski & Karim Harji
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How does Grameen Bank bring in cash?
© Norm Tasevski & Karim Harji
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What you need to care about is… – Assets… – …and how these assets create value
© Norm Tasevski & Karim Harji
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What are Grameen Bank’s key assets?
© Norm Tasevski & Karim Harji
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What you need to care about is… – Actions (specifically, the actions you plan to take to generate value)
© Norm Tasevski & Karim Harji
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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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© Norm Tasevski & Karim Harji
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Common Vision!
Discreet Missions!
Same Core Values!
A Commitment
to Invest in the
Partnership!
© Norm Tasevski & Karim Harji
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Who does Grameen Bank partner with?
© Norm Tasevski & Karim Harji
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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
© Norm Tasevski & Karim Harji
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What does Grameen Bank’s cost structure look like (in simple terms)?
© Norm Tasevski & Karim Harji
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So…how does your Business Model for Grameen Bank compare???
© Norm Tasevski & Karim Harji
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$$!Micro-loans!
Personal!
Poor !Entrepr-
!
eneurs!
Branches!
Interest!
Rates!
Lending &!
Collecting!
$$!
-Branches!
-Brand!-Capital!
Govern-!
ment!
-People!
-Capital costs!
© Norm Tasevski & Karim Harji
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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© Norm Tasevski & Karim Harji
Assaf Weisz…
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© Norm Tasevski & Karim Harji
What did we learn?
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© Norm Tasevski & Karim Harji
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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© Norm Tasevski & Karim Harji
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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