cradle2013 businessmodelcanvas
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design and business model innovation
Cradle
November 2012
business modelinnovation & design
?How does one come up with successful business models?
Jeff Bezos
2012
Larry Page & Sergey Brin Lei Jun (雷�)
Xiaomi (小米科技)
?what do these examples have in common?
they focused on product innovation alone
they empower the product through the
business model1 they simply copied from competitors
they invented a new business model2
they could prove in advance that the
model would workthey had to take some
risk and experiment3going beyond
product innovation
1going beyond
copyingcompetitors
2going beyond
waitingfor proof
3business
modeltestingmodels
design thinking
business model
1 ?discuss with your seat neighbor what is the business model of
Nespresso
?discuss with your seat neighbor what a business model is
common language simple
holistic visual
Business Model Canvas
customer segment
defines the different groups of people or organizations the company aims to help with getting a job done
images by JAM
value proposition
images by JAM
describes the bundle of products and services that create value for a specific customer segments
distribution channel
images by JAM
outlines the customer touch points through which the company reach the customer segments to communicate and deliver a value proposition
customer relationship
images by JAM
describes how an organization gets, keeps, and grows each customer segment and what type of relationships it entertains with each of them
revenue stream
images by JAM
represents the type of revenues an organization generates from each customer segment for a specific value proposition
key resources
images by JAM
describes the most important assets, capabilities and know-how required to make a business model work
key activities
images by JAM
present the most important tasks and processes a company must perform to make its business model work
key partners
images by JAM
outlines the network of suppliers and partners that leverage the business model
cost structure
images by JAM
describes all costs incurred to operate a business model
customer segments
key partners
cost structure
revenue streamsdistribution
channels
customer relationshipskey activities
keyresources
value proposition
images by JAM32
VALUEPROPOSITION
CUSTOMERRELATIONSHIP
CUSTOMERSEGMENT
DISTRIBUTIONCHANNEL
KEYACTIVITIES
KEYRESOURCES
KEYPARTNERS
COST REVENUES
The Business Model Canvas
http://www.businessmodelgeneration.com
DIGITALPLATFORM
DIGITALLIFESTYLE
DIGITALHUB
HARDWARE MANUFACTURER
1998 2001 2007 2010
?What was apple’s business model for the iPod?
buzz group1http://www.flickr.com/photos/joeshlabotnik/2294656527/
?describe the Nespresso’s business model using the canvas
RESULTS average growth of 30% p.a. since 2000
in 2011, 3 billion CHF annual revenue with 1 product line
but Nespresso almost failed in 1987
differentiate
1
VALUEPROPOSITION
CUSTOMERRELATIONSHIP
CUSTOMERSEGMENT
DISTRIBUTIONCHANNEL
KEYACTIVITIES
KEYRESOURCES
KEYPARTNERS
COST REVENUES
business model
ENGINEERING
CONSOLE SUBSIDIES
IBM
R&D
DEVELOPMENTHIGH-
PERFORMANCE CONSOLE
HARDCORE GAMERS
HARDWARE
SALES AT LOSS
ROYALTIES
CONSOLE AUDIENCE
GAME DEVELOPERS
[source: art by Nintendo]
2006VALUE
PROPOSITIONCUSTOMER
RELATIONSHIPCUSTOMERSEGMENT
DISTRIBUTIONCHANNEL
KEYACTIVITIES
KEYRESOURCES
KEYPARTNERS
COST REVENUES
business model
VALUEPROPOSITION
CUSTOMERRELATIONSHIP
CUSTOMERSEGMENT
DISTRIBUTIONCHANNEL
KEYACTIVITIES
KEYRESOURCES
KEYPARTNERS
COST REVENUES
business model
ENGINEERING
CONSOLE SUBSIDIES
IBM
R&D
DEVELOPMENTFAMILY CONSOLE
CASUAL GAMERS
PROFITABLE
HARDWARE
SALES
ROYALTIES
CONSOLE AUDIENCEGAME
DEVELOPERS
CHEAP GAME DEVELOPMENT
COST
new untapped market
revenues from both sides
low cost differentiation
easier operations 1
take-away
focusing on product innovation is not enough, it is better to empower
it through a business model
2design thinking
analytical thinking
intuitive thinking
designthinking
DEEP DIVE1
CUSTOMERINSIGHTS
2
?what does it means for business models?
VALUEPROPOSITION
CUSTOMERRELATIONSHIP
CUSTOMERSEGMENT
DISTRIBUTIONCHANNEL
KEYACTIVITIES
KEYRESOURCES
KEYPARTNERS
COST REVENUES
analyze from the customer perspective ...
A VALUE PROPOSITION
A CHANNEL
A CUSTOMER TARGET
A REVENUE STREAM
RELATIONSHIP
A RESOURCE
COST
A PARTNER
AN ACTIVITY
ANOTHER ACTIVITY
ANOTHER VALUE PROPOSITION
Describe how your products and services create customer gains. How do they create benefits your customer expects, desires or would be surprised by, including functional utility, social gains, positive emotions, and cost savings?
Rank each gain your products and services create according to its relevance to your customer. Is it substantial or insignificant? For each gain indicate how often it occurs.
Describe how your products and services alleviate customer pains. How do they eliminate or reduce negative emotions, undesired costs and situations, and risks your customer experiences or could experience before, during, and after getting the job done?
Rank each pain your products and services kill according to their intensity for your customer. Is it very intense or very light?
For each pain indicate how often it occurs. Risks your customer experiences or could experience before, during, and after getting the job done?
List all the products and services your value proposition is built around.
Which products and services do you offer that help your customer get either a functional, social, or emotional job done, or help him/her satisfy basic needs?
Which ancillary products and services help your customer perform the roles of:
Products and services may either by tangible (e.g. manufactured goods, face-to-face customer service), digital/virtual (e.g. downloads, online recommendations), intangible (e.g. copyrights, quality assurance), or financial (e.g. investment funds, financing services).
Rank all products and services according to their importance to your customer. Are they crucial or trivial to your customer?
Describe the benefits your customer expects, desires or would be surprised by. This includes functional utility, social gains, positive emotions, and cost savings.
Describe negative emotions, undesired costs and situations, and risks that your customer experiences or could experience before, during, and after getting the job done.
Describe what a specific customer segment is trying to get done. It could be the tasks they are trying to perform and complete, the problems they are trying to solve, or the needs they are trying to satisfy.
Besides trying to get a core job done, your customer performs ancillary jobs in differ-ent roles. Describe the jobs your customer is trying to get done as:
Rank each job according to its significance to your customer. Is it crucial or is it trivial? For each job indicate how often it occurs.
Rank each gain according to its relevance to your customer. Is it substantial or is it insignificant? For each gain indicate how often it occurs.
Rank each pain according to the intensity it represents for your customer.Is it very intense or is it very light.? For each pain indicate how often it occurs.
Produced by:Stattys GmbH
Weissbadstrasse 14 9050 Appenzell
www.stattys.com
Designed by:Business Model Foundry GmbH
Kalkbreitestrasse 71, 8003 Zürich
www.businessmodelgeneration.com
Day Month Year
No.
Copyright of Business Model Foundry GmbH
Create one for each Customer Segment in your Business Model
value proposition canvas
[source: Sony Pictures]
MULTIPLE MODELS
3
[source: Sony Pictures]
[source: Sony Pictures]
[source: flickr]architecture
Jim Glymph,Gehry Partner
if you freeze to an idea too quickly, you fall in love with it ...“ ” ?what does it means for
business models?
prototyping72
74
2take-away
don’t fall in love with your first idea, because it will become difficult to continue exploring
buzz group2you get ...
+
design a business model using those two resources
business modelVALUE
PROPOSITIONCUSTOMER
RELATIONSHIPCUSTOMERSEGMENT
DISTRIBUTIONCHANNEL
KEYACTIVITIES
KEYRESOURCES
KEYPARTNERS
COST REVENUES
3testing models
strength weakness
flickr 2363952016_97f10be59f_o.jpg
3 ENVIRONMENT SCANNING
2
MARKET FORCES
- market analysis -
INDUSTRY FORCES
- competitive analysis -
MACRO ECONOMIC
FORCES
- macroeconomics -
KEY TRENDS
- foresight -
2 BM ECONOMICS
2
estimation92
edition
1 CUSTOMER DEVELOPMENT
3
a business model might look great on paper...
.. but after all it is only a...
VALUEPROPOSITION
CUSTOMERRELATIONSHIP
CUSTOMERSEGMENT
DISTRIBUTIONCHANNEL
KEYACTIVITIES
KEYRESOURCES
KEYPARTNERS
COST REVENUES
... set of hypotheses
GUESS
GUESS
GUESS
GUESS
GUESS
GUESS
GUESS
GUESS
GUESS
GUESS
GUESS GUESS
GUESS
Steve Blankentrepreneur & author
there are no facts in the building... so get the hell out and talk to customers“”
test each hypothesis
... adapt the business modeluntil you can prove it works
customer discovery
customer validation
customer creation
company building
pivot
only then should you build your company or launch the project, else you’ll risk...
burning your cash while searching for a business model
3take-away
until it’s in the market there is no proof that even the best business
model on paper will work
?where is solar energy particularly useful?
Jigar Shah106
in the context of shopping centers
?What could be a scalable business model for SunEdison ?
1SOLAR PANEL INSTALLATION
SALES FORCE
MID- TO LARGE ORGANIZATIONS
PURCHASING FEE
LONG TERMRELATIONSCUSTOMER
ACQUISITION
PANEL MANUFACTURERS
INSTALL PANELS
VALUEPROPOSITION
CUSTOMERRELATIONSHIP
CUSTOMERSEGMENT
DISTRIBUTIONCHANNEL
KEYACTIVITIES
KEYRESOURCES
KEYPARTNERS
COST REVENUES
SOLAR EXPERTS
PATENTS
?why don’t the retail stores and shopping centers
switch to solar energy?
111
why don’t the re
tail stores
and
shopping c
enters switch t
o
solar ener
gy? ?what if we gave the panels away for free to eliminate the hurdle of upfront investment
VALUEPROPOSITION
CUSTOMERRELATIONSHIP
CUSTOMERSEGMENT
DISTRIBUTIONCHANNEL
KEYACTIVITIES
KEYRESOURCES
KEYPARTNERS
COST REVENUES
2
SOLAR EXPERTS SALES FORCE
MID- TO LARGE ORGANIZATIONS
INSTALLING & MANAGING
INSTALLATIONS
INSTALL & MANAGE
INSTALLATIONS
PANEL MANUFACTURERS
SOLAR PANEL INSTALLATION
POWER PURCHASING AGREEMENTS
REGULAR PPA PAYMENTS
ACQUIRING PPAS
SOLAR ENERGY INSTALLATIONS
ACQUIRE PPAS ?but how to finance the
upfront investment
115
but how to fi
nance the
upfront in
vestment
VALUEPROPOSITION
CUSTOMERRELATIONSHIP
CUSTOMERSEGMENT
DISTRIBUTIONCHANNEL
KEYACTIVITIES
KEYRESOURCES
KEYPARTNERS
COST REVENUES
3
LOW-RISK INVESTMENT
RETURN FINANCIAL INSTITUTIONS
INSTITUTIONAL
& PRIVATE INVESTORS
INVESTMENT FEE
ACQUIRING INVESTORS
SOLAR EXPERTS
SALES FORCE
MID- TO LARGE ORGANIZATIONS
INSTALLING & MANAGING
INSTALLATIONS ACQUIRING PPAS
ACQUIRE PPAS
INSTALL & MANAGE
INSTALLATIONS
REGULAR PPA PAYMENTS
SOLAR ENERGY INSTALLATIONS
POWER PURCHASING AGREEMENTS
DEVELOPMENT & MONITORING FEE
PACKAGE & SELL PPAS
POOL OF PPAS
SunEdison is now the largest provider of solar
power in the US
SunEdison bought in ’09 by MEMC Electronic Materials
for USD 200 million
design thinking
business model
testingmodels
thank you ...
BusinessModelGeneration.com [email protected]