Business model generationFacilitation Guide

Ver 1.0

www.softhouse.se

I-DO-A-R-R-TIntention: Use the business model generation techniques in order to be able to validate business viability.

Desired Outcome: A business model canvas visualized with post-its on a flip chart and a validation test.

Agenda: Session I: Populating the canvas Session 2: Assessing your business modelSession 3: Creating a validation test

Roles: Facilitator/sensei, decision maker, doers, opiniated people

Rules: No laptops, no phones, parking lot area for questions of topic, respect the timebox

Time: 4 hrs, 09.00-13.00 <datemonthyear, location>

Business model canvas….… is a one-pager for business model generation and validation. A business model describes the basics of how to create and deliver value at a profit.

http://www.youtube.com/watch?v=QoAOzMTLP5sBusiness model generation tutorial:

Pre-conditionIn order to have a productive session; start with an elevator pitch (or similar).Pinpointing value proposition for a customer segment.

http://torgronsund.com/2011/11/29/7-proven-templates-for-creating-value-propositions-that-work

Additionalvalue proposition formats:

Session 1: Populating the canvas

• Customer segments• Value proposition• Channels• Customer relationships• Revenue streams

• Key activities• Key resources• Key partners• Cost structures

Session 1 is about populating the canvas based upon already produced value proposition and customer segment. During this first session it is common to have to adjust both initial value proposition and customer segment due to the learnings that arise when additional information is visualized. Feel free to add multiple customer segments and value proposition if needed, separated with different colored post-its.

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FOR busy city-

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FOR busy city-

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FOR busy city-dwellers, WHO HAS a need for a beautiful home. Echo Flower IS A flower decoration service, THAT continually deliver fresh flowers. UNLIKE traditional flower suppliers, Echo flower uses only ecological grown flowers.

need for a beautiful home.

Flower deco-ration

service

Continu-ally

delivering echo

flowers

FOR busy city-

dwellers

need for a beautiful home.

Flower deco-ration

service

Continu-ally

delivering echo

flowers

Web site

Home delivery service

FOR busy city-

dwellers

need for a beautiful home.

Flower deco-ration

service

Continu-ally

delivering echo

flowers

Web site

Home delivery service

Web siteSocial media

News-letter

FOR busy city-

dwellers

need for a beautiful home.

Flower deco-ration

service

Continu-ally

delivering echo

flowers

Web site

Home delivery service

Web site

Social media

News-letter

Sub-scription

Fee

20$ /month

Paypal100

customer

100 * 20 = 2000$ / month

FOR busy city-

dwellers

need for a beautiful home.

Flower deco-ration

service

Continu-ally

delivering echo

flowers

Web site

Home delivery service

Web site

Social media

News-letter

Sub-scription

Fee

Paypal100

customer

100 * 20 = 2000$ / month

20$ /month

Make flower

bouquets

Manage website & social media

Manage paypal

account

Deliver flower

bouquets

Manage sub-

scribers

Call new sub-

scribers

FOR busy city-

dwellers

need for a beautiful home.

Flower deco-ration

service

Continu-ally

delivering echo

flowers

Web site

Home delivery service

Web site

Social media

News-letter

Sub-scription

Fee

Paypal100

customer

100 * 20 = 2000$ / month

20$ /month

Make flower

bouquets

Manage paypal account

Manage sub-

scribers

Call new sub-

scribers

Deliver flower

bouquetsManage website & social media

FloristWeb

editorSeller

Carrier

FOR busy city-

dwellers

need for a beautiful home.

Flower deco-ration

service

Continu-ally

delivering echo

flowers

Web site

Home delivery service

Web site

Social media

News-letter

Sub-scription

Fee

Paypal100

customer

100 * 20 = 2000$ / month

20$ /month

Make flower

bouquets

Manage paypal account

Manage sub-

scribers

Call new sub-

scribers

Deliver flower

bouquetsManage website & social media

Florist

Web editor

Seller

Carrier

Echo flower

supplier

Courier

Paypal

FOR busy city-

dwellers

need for a beautiful home.

Flower deco-ration

service

Continu-ally

delivering echo

flowers

Web site

Home delivery service

Web site

Social media

News-letter

Sub-scription

Fee

Paypal100

customer

100 * 20 = 2000$ / month

20$ /month

Make flower

bouquets

Manage paypal account

Manage sub-

scribers

Call new sub-

scribers

Deliver flower

bouquetsManage website & social media

Florist

Web editor

Seller

Carrier

Echo flower

supplier

Courier

Paypal

Flowers

Flower binding / packag-

ing

Paypal service

fee

Carrier fee

Salary:Florist

Web editor Seller

(1 individual)

Website fee

FOR busy city-

dwellers

need for a beautiful home.

Flower deco-ration

service

Continu-ally

delivering echo

flowers

Web site

Home delivery service

Web site

Social media

News-letter

Sub-scription

Fee

Paypal100

customer

100 * 20 = 2000$ / month

20$ /month

Make flower

bouquets

Manage paypal account

Manage sub-

scribers

Call new sub-

scribers

Deliver flower

bouquetsManage website & social media

Florist

Web editor

Seller

Carrier

Echo flower

supplier

Courier

Paypal

Flowers

Flower binding

/packag-ing

Paypal service

fee

Carrier fee

Salary:Florist

Web editor Seller

(1 individual)

Website fee

Session 2: Assessing your business model

• Once the canvas is populated and hence already adjusted many times already.

• It is time to look at your business model from yet another angle, to assess the viability.

• Walk through the assessment

• You will probably have to adapt your model or else realize that this idea will never fly

Session 2: Assessing your business model

1. Is it difficult for customers to switch to a competitor?2. Do you have recurring revenue?3. Do you have income before you have expenditures?4. Is your cost side a game-changer?5. Do you have others working for you for free?6. How scalable is your business model?7. Does your business model protect you from

competitors?How easy is it for someone to copy and catch up?

• Assess your business model against the questions below. • Learn and adapt

FOR busy city-

dwellers

need for a beautiful home.

Flower deco-ration

service

Continu-ally

delivering echo

flowers

Web site

Home delivery service

Web site

Social media

News-letter

Sub-scription

Fee

Paypal100

customer

100 * 20 = 2000$ / month

20$ /month

Make flower

bouquets

Manage paypal account

Manage sub-

scribers

Call new sub-

scribers

Deliver flower

bouquetsManage website & social media

Florist

Web editor

Seller

Carrier

Echo flower

supplier

Courier

Paypal

Flowers

Flower binding

/packag-ing

Paypal service

fee

Carrier fee

Salary:Florist

Web editor Seller

(1 individual)

Website fee

This is nothing but guesses !!!

Session 3: Creating a validation test

• When your business model have passed the assessment, then it is time for validation.

• Create a validation test and start asking for customer feedback

• The validation testing will normally require several test cycles with new learnings and business model adaptation in between. This takes place after the workshop.

Session 3: Creating a validation test

Test name:

1. Hypothesis:

2. Test:

3. Metric:

4. Criteria:

Subscription is king

We believe that we will earn 0.1 million $ a year

To verify that, we will sell subscriptions for 3 months

And measure how many subscriptions we sold

We were right if we sold more than 100 subscriptions

Validation test cycle

Customer Feedback

Business Model

Validation Test

• Run the validation test in accordance with your test hypothesis• Learn and adjust your business model.• It is perfectly normal to fail - keep going until business viability

is proven and your business model is validated

FOR busy city-

dwellers

need for a beautiful home.

Flower deco-ration

service

Continu-ally

delivering echo

flowers

Web site

Home delivery service

Web site

Social media

News-letter

Sub-scription

Fee

Paypal100

customer

100 * 20 = 2000$ / month

20$ /month

Make flower

bouquets

Manage paypal account

Manage sub-

scribers

Call new sub-

scribers

Deliver flower

bouquetsManage website & social media

Florist

Web editor

Seller

Carrier

Echo flower

supplier

Courier

Paypal

Flowers

Flower binding

/packag-ing

Paypal service

fee

Carrier fee

Salary:Florist

Web editor Seller

(1 individual)

Website fee

Validated business model

How to plan and executeMake sure there is an elevator pitch (or similar) available as input.For complex products/services, think about having user personas and/or a customer life cycle/journey made beforehand for additional input. If you are a large group (more than 7) – go for a multi team approach and create multiple business model which are merged in two steps; after completing the revenue stream and after completing the cost structure. Sometimes your business model will include multiple customer segments, each with their own value proposition and channels. Keep them apart by using different colored post-its.Validation means that your business model have been proven to work in accordance with your validation test – it is of great importance to create a relevant validation test.Remember! A workshop is a workout:"You've got big dreams? You want fame? Well, fame costs. And right here is where you start paying ... in sweat.“ (Lydia Grant, Fame)