WelcomeAn Introduction to

Business Model Canvas

Catherine DugganWednesday 29 October 2014

About Me

Background: StartUp Sector

2013

•200 High Potential StartUps

•350 Entrepreneurs developed their Business Plans

2014

•Government is focusing on creating more jobs through entrepreneurship and start-ups

Aim

Aim:

•To introduce the Business Model Canvas Tool

Objectives:

1.Define a Business Model

2.Explore the 9 Building Blocks of the Business Model Canvas

Business Model Definition

A business model describes the rationale of how an organisation creates, delivers, and captures value

Traditional Business Plan

A tool for:

•Describing

•Analyzing

•Designing

Business Model

Source: Business Model Generation created by Alexander Osterwalderhttp://www.businessmodelgeneration.com/downloads/businessmodelgeneration_preview.pdf

Business Model Canvas

Business Model Canvas

Strategic business planning tool with 9 Building Blocks1. Customer Segments

2. Value Proposition

3. Channels

4. Customer Relationships

5. Revenue Streams

6. Key Resources

7. Key Activities

8. Key Partnerships

9. Cost Structure

1. Customer Segments

For whom are we creating value?

Who are our most important customers?

•Mass Market

•Niche Market

•Segmented

1. Customer Segments

Reader

Advertiser

2. Value Proposition

Tries to solve customer problem & satisfy their needs with value propositions.

•What value do we deliver to the customer?

•Which one of our customer’s problems are we helping to solve?

•What bundles of products & services are we offering to each Customer Segment?

•Which customer needs are we satisfying?

2. Value Proposition

vv

vv

3. Channels

Value propositions are delivered to customers through communication, distribution, and sales channels.

•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?

3. Channels Phases

Channel Phases1. Awareness: How to raise awareness about

our company’s products & services?

2. Evaluations: How to help customers evaluate our organisation's Value Proposition?

3. Purchase: How to allow customers to purchase specific products and services?

4. Delivery: How to deliver a Value Proposition to customers?

5. After sales: How to provide post-purchase customer support?

Branding

Branding

Branding

Some more examples

4. Customer Relationships

Customer relationships are established & maintained with each Customer Segment.

•What type of relationship does each of our Customer Segments expect us to establish & maintain with them?

•Which ones have we established?

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

•How costly are they?

Customer Relationships

vv

vv

5. Revenue Streams

A result from value propositions successfully offered to customers.•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?

5. Revenue Streams

Types

•Subscription Fees

•Lending/Renting/Leasing

•Licensing

•Brokerage fees

•Advertising

5. Revenue Streams

6. Key Resources

These are the assets required to provide •Distribution Channels

•Customer Relationships

TypesPhysical

Intellectual (brand patents, copyrights, data)

Human

Financial

6. Key Resources

7. Key Activities

What Key Activities do our Value Propositions require?•Our Distribution Channels?

•Customer Relationships?

•Revenue Streams?

Categories•Production

•Problem Solving

•Platform/Network

Some activities are outsourced & some resources are acquired outside.

•Who are our Key Partners?

•Who are our Key Suppliers?

•Which Key Resources are we acquiring from partners?

•Which Key Activities do partners perform?

MotivationOptimisation & economy

Reduction of risk & uncertainty

Acquisition of particular resources & activities

8. Key Partnerships

Customer Relationships

vv

vv

9. Cost Structure

The business model elements result in the cost structure•What are the most important costs?

•Which Key Resources are most expensive?

•Which Key Activities are most expensive?

Is your business more?Cost Driven (leanest cost structure)Value Driven (focused on value creation)

Sample characteristicsFixed Costs (salaries, rents, utilities)Variable costs

Business Model Canvas

What next?

• Test the guesses in the Building Model Canvas

• Get out of the building and talk to customers *

• Only when potential customers validate the idea, then build the product or service

• Saves time & money

• Or Pivot

*Source: The Four Steps of the Epiphany by Steve Blank http://web.stanford.edu/group/e145/cgi-bin/winter/drupal/upload/handouts/Four_Steps.pdf

Summary

Aim:

• To introduce the Business Model Canvas Tool

Objectives:

1. Define a Business Model

2. Explore the 9 Building Blocks of the Business Model Canvas

Additional Information

YouTubeBusiness Model Canvas Explainedhttps://www.youtube.com/watch?v=QoAOzMTLP5s

Business Model Canvas Tutorial Episodes 1 - 6https://www.youtube.com/watch?v=wwShFsSFb-Yhttps://www.youtube.com/watch?v=wlKP-BaC0jAhttps://www.youtube.com/watch?v=iA5MVUNkSkMhttps://www.youtube.com/watch?v=7O36YBn9x_4https://www.youtube.com/watch?v=-2gd_vhNYT4https://www.youtube.com/watch?v=SshglHDKQCc

Catherine Duggan: gmail: duggancatherine56@gmail.com

Linkedin: ie.linkedin.com/pub/catherine-kearns/40/b4a/126/

Conclusion

Thank you for your attention

Questions & Answers