Business Model Canvas Foundational TOOL · •Costs are very business model specific •All startups fail for the same reason –they ran out of money •So chose your business model

Page1

BusinessModelCanvasFoundationalTOOL

BMC

MVP

Biz Plan

Cate MeyerSAGE AdvisorCSU Adjunct Faculty

Lean

Chasm

Page2

Butfirst….Cate,

Iwouldlovetobeoneofthosestudentsthattookyoutocoffeeandtoldyouallabouteverything. Atthemoment,Ican'tdothatIamsureyouaretoobusytodothataswell. BUTWHATICANTELLYOUISTHATIGOTANAWESOMECONTRACTJOBBECAUSEOFMYABILITYTOUSETHEBUSINESSMODELCANVAS! :) Thoughtyouwouldappreciatethat!

-adw

DVMCandidate | Classof2019 | ColoradoStateUniversity

5June2017 +Key Differentiator in Student CIS Competitions

Page3

ContextandApplication• BusinessModelGenerationCanvasoverview

• TheCanvasasatooltounderstandstrategyanddecisions• FrameworkandVocabulary• Variationsonthetheme

• ExamplesontheCanvas• Apple/I-Tunes• VigilantCare (SAGEclient)• SAGE(GroupBuildActivity)

<Interactive Poll>

Page4

WhatisaBusinessModel?• Overallrationaleofyourbusiness

• Howyougetstuff,whatyoudowithit,howandwhoyousellittoandkeeptrackofthemoney

• Simplearticulationofyourbusiness• Thatclearlyseparatesthefewitemsthatmakeyoudifferentfromeverythingelseyoujusthavetodo

• Avocabularythatyouandyourteamshare• Soyoucanmakebetter andfaster decisions

• Doesnotstandalone• Yourbusinessmodelisrelative tocompetitorsandindustry

Snapshot of a Business Plan

Page5

Cate’sKeyQuestionsofSTRATEGY:• WhatCUSTOMERdoweSERVE?• WhatPROBLEMoftheirsdoweSOLVE?

• HOWdowesolvethatproblemBETTERTHANCOMPETITION?

• HowdoweMAKEMONEY?

Value Creation – WHOWHAT

Value Delivery - HOW

Value Capture - WHY

BMC + Financials = Effective mini-PITCH

Page6

BMC:NineKeyParts• CustomerSegments+• ValuePropositions+• Channels+

• CustomerRelationships=Revenue

• KeyResources+• KeyActivities+

• KeyPartnerships=Costs

• AndRevenue– Costs=Profits• whicharethegoal

Page7

BMG Canvas

Page8

Value DeliveryHOW

Value CreationWHO/WHAT

Value CaptureWHY

Page9

The Business Model Canvas

Page10

Page11

The Lean Canvas

Page12

Mission-based(Non-Profit)– StevenBlank

Page13

CustomerSegments:Whichcustomerdoweserve??

• Whoareourcustomers?• Forwhomareweaddingvalue?• Whoareourmostimportantcustomers?

• Segmentationisthetooltouse• Segmentsareoftenreferredtoas:

• Mass,Niche,Needs-based• Manymodelsexisttoservethem

Page14

ValuePropositions• Whatvaluetothecustomer?• Whatspecificproblemsorneedsdoweaddress?• Withwhatproductandserviceswillweservethesegments?

• Valuepropositionisboth• whatthetargetcustomerhearsandfeels• whatyourallyyourteamtodeliverØThegoalistobemoreappealingthanalternatives

Page15

Channels• Book’sfocushereanswers:

• Howdooursegmentswanttobereached?• Howdowereachthemtoday?• Whichworkbest?Aremostcostefficient?• Howwelldotheyservethecustomerstotalneed?

• Channelsareakeycustomertouchpoint• Deliveringmuchofyourvaluemessage– ornot• Allowingthecustomertobuyeasily– ornot

• Channeldecisionsarecomplex• Own,Partner;Direct,Indirect• awarenessè evaluationè purchaseè deliveryè support

Page16

CustomerRelationships• Book’sfocushereanswers:

• Whattypeofrelationshipdoesoursegmentwant?

• Whichonesexist,cost?• Doesthisreflecttherestofourbusinessmodel?

• Relationshipshavetoreflectthecustomer'sneed• Face-to-facevs.automated,orboth• Changesbyphaseoftherelationship

• Awarenessè Evaluationè Purchaseè Deliveryè PostSalesSupportèRetentionè Repeat

• Relationshipsarehuman• Manageyourfacetothecustomeraccordingly

Page17

RevenueStreams

• Book’sfocushereanswers:• Customerwillingnesstopay?• Whataretheypayingnowandhow?• Howbigiseachrevenuestream?

• Cashfromeachcustomersegment• Onetimetransactions• Recurring

• Myriadofwaystogeneratecash• Whichonesmakeyousuccessful?• Whichonealignwiththerestofyourbusinessmodel?

Page18

KeyActivities• Book’sfocushereanswers:

• Whatactivitiesdoesourvaluepropositionneed?• Ourchannels?Customers?Revenuestreams?Partners?

• Activities areaboutwhatyoudo,resources aboutwhatyouhave– theyworktogether

• Buildthings• Supplychainmanagement• Softwaredevelopment

• Activitiesmustbefocusedonuniquevaluecreation

• Orpaysomeoneelsetodothem

Page19

KeyResources

• Book’sfocushereanswers:• WhatdoIneedtodelivermyvalue

proposition?• Whatresourcesareneededtosupportmychannels?• Whatresourcesareneededtomanagemyrevenue?

• Resourcesarethethings• Physical,intellectualorhuman• Factories,ATM’s,Intellectualproperty,People,Trucks,Software,Systems• Inaresourcesense,peoplearealsothings

• Resourcesdrivecostsandmustbemanaged• Thefewyouneedtoownvs.whatyourent

Page20

KeyPartnerships

• Book’sfocushereanswers:• Whoareourpartnersversesoursuppliers?• Whatresourcesoractivitiesmustwegetfromthem?• Canwedelivervaluetooursegmentswithoutthem?

• Coopetition rulesheretoday• Manycompaniesaresuppliers,customersandcompetitorswitheachother

• Partnershipcomeinmanyforms• Strategicalliances• Jointventures• Buyer-Seller

Page21

CostStructure

• Book’sfocushereanswers:• Whatarethemostimportantcosts?• Whatcostscannotbemanaged?• Whatresourcesandactivitiescanwecostcontrol?

• Costsareverybusinessmodelspecific• Allstartupsfailforthesamereason– theyranoutofmoney• Sochoseyourbusinessmodeltomatchyourcash

• Knowthecostsofallthebusinessmodelchoices• Segments,Relationship,Channel,Activities,Resources,Partnerships,ValuePropositiondevelopment….andCostandRevenuemanagement

Page22

AppleiPod/iTunesCanvas

Business Model Generation, Osterwalder & Pigneur, Wiley, 2010. p.46.

Page23

VigilantCareCanvas– earlydraft

Key Partners Evergreen (grant funds) • software/hardware development • FDA approvals • Product distribution • Product support • ?Ecommerce

Autism researchers (Mizou) Child self-help groups Child with autism/parent advisory board Media Consultant - ??? target market expertise eg: family health concerns?

Key Activities (for business) • Grant writing and scientific study conduct o Ongoing research testing clinical

outcomes

• Ongoing product development o Embed self-management components

when possible o Develop a daytime system o Develop system for child <35# o Identify additional needs that

potentially have technologic solution

• Outbound marketing o Develop relationships with local autism

practitioners o Present at autism healthcare practitioner

conferences, ? trade booth o Web Presence Creation and marketing o Blogging o Press releases re: research results

Value Propositions Prevention of unsafe behaviors without ‘tagging’ children Greater independence

- Self-management of sleep problems

Improved academic performance Fewer autism symptoms Reduced chance of life-long sleep problems Product customization to needs of population of cwa and to each child/family unit

Data Needs: 1. Research results re: value claims 2. More details re: level of customization – is it at the user level?

Customer Relationships

• New Customer Acquisition o Direct to parent via web

portal

Customer Segments

• Child with autism – user? • Teachers - recommender? • Parents of CWA - payer? • State Agency - payer?

Data Needs: 1. incidence level/population of CWA - size – national/state - projected growth rates 2. Govt Support Programs for CWA - federal? - by state?

Key Resources • Scientific team • Child with autism/parent advisory board

Channels • Autism support groups - recommender • Special education teachers –

recommender

• Owned sales force – government agencies

Data Needs: 1. Key Support Groups? 2. Govt Support Programs for CWA - federal? - by state?

Cost Structure

• Grant funds 30/40% Operational expenses? • How does Evergreen get paid? Royalties?

Revenue Streams • Grant dollars – how distributed? All up front? • Payments from State/Federal programs? • Web Product Sales • Monthly service subscriptions?

Page24

Let’sDoanExample– 5minutesworkalone

• WhatistheValueProposition forSAGE?• Whoare“We?”• WhoistheCustomer?• WhatistheProduct/Service?• WhoistheNextBestCompetitor?• WhatisourDifferentiation?• WhatisthePrice?Cost?

24

Page25

BMG Canvas

Page26

SAGEBMC– Draft1

Page27

WebSiteandVideos

• FollowtheselinkstojointheBMGonlinecommunity• Textbookwebsite:http://www.businessmodelgeneration.com/• BMGInnovationhub:http://www.businessmodelhub.com/• Alex’swebsite:http://www.businessmodelalchemist.com/• Alex’stools:http://www.businessmodelalchemist.com/tools

• AlternativeModels:• LeanStartUpCanvashttp://ashmaurya.com• MissionbasedCanvashttps://steveblank.com/2016/02/23/the-mission-model-canvas-an-adapted-business-model-canvas-for-mission-driven-organizations/