e-entrepreneurship - 2.slide

eEntrepreneurship

TH Köln - Master Programme / WebScience

Online session 121.04.2016

Sum up: course structure

❖ We will learn and apply the basics of e-entrepreneurship

❖ Students will form project groups that represent an enterprise (startup) that should run a

business in the information economy

❖ Starting point of project work is coming up with a business idea that should be analyzed and

developed by means of web possibilities

❖ Project groups will prepare a roadmap to outline which steps they need to validate business

idea/model

➢ Roadmap is a document that comprises your idea, assumed business model, planned

activities to validate your assumptions of business model

➢ Group activities for validating a business model are e.g. applying web mining, competitive

analysis, marketing strategy

❖ Groups will work on activities planned in the roadmap. The outcomes should be documented in a

project documentation. 2

Sum up: course structure

❖ Once business model validated, groups can go on developing an MVP.

❖ MVP “Minimum viable product”: The minimum thing you need to get feedback from customers

and investors. MVP can be everything to test your idea. E.g. a printable flyer, a functional

landingpage or prototype of a landingpage, a facebook page with some product visuals etc.

❖ On-site meeting: Groups will present their projects results.

❖ After on-site meeting: Groups will send their presentation slides and project documentation to

the lecturer. Each group will get a grade based on their presentation (20%) and project

documentation (80%). All members of a project group get the same grade assigned to that group

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Schedule

❖ 21.04.2016 - 1st online meeting

❖ 08.05.2016 - Submission of assignment "Roadmap"

➢ Project groups will create a roadmap containing the steps to validate your business idea. This document will be a part of final

project documentation. Roadmap will be sent to lecturer via email. Each group will get a written feedback via email.

❖ 23-27.05.2016 - Extra online meeting

❖ 12.06.2016 - Submission of assignment "Project Documentation Version 1"

➢ Project groups will send a draft project documentation to the lecturer via email. This draft should contain performed activities

and results which was planned by the group before in the Roadmap. Project groups will get a personal feedback during 2nd

online session.

❖ 14.06.2016 - 2nd online meeting

➢ Feedback slots: Several feedback time slots will be offered on the WIKI. Each group will book a time slot to get a personal

feedback to the delivered draft project documentation. Groups will present their project status and get feedback.

❖ 23.06.2016 - 3rd online meeting (optional)

➢ Feedback slots: Several feedback time slots will be offered on the WIKI. Each group can book a time slot to get a personal

feedback. Groups will present their project status and get feedback.

❖ 08.07.2016 - On-site meeting

➢ Group presentations containing business idea, business model, results of the project incl. MVP, and learnings. Furthermore final

project documentation and presentation slides will be sent to the lecturer via email. See the deadline below.

❖ 15.07.2016 - Submission of "Presentation Slides" and "Final Project Documentation"4

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Agenda

❖ Organizational matters

❖ Web 2.0, eBusiness

❖ Students present their business ideas

❖ Business Model

❖ Validating Business Model

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Organizational matters

❖ Everyone signed up for the course?➢ https://webscience.th-koeln.de/smwiki/index.php?title=EEntrepreneurship:Summer2016

❖ Project groups➢ Has everyone joined a group?

❖ Extra online meeting➢ Doodle for a possible date http://doodle.com/poll/va2pit8nnkb6szzd

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Web 2.0

❖ A blurred defined high-level term that describes web as an interactive platform. WEB 2.0 can be defined contentually and technically

➢ Contentual: Large part of content is created by users. Users have an additional role as

content creator. Information diffusion is becoming more decentral over blogs, social media

etc. Mixed concepts “Mashups” arise from available content and services

➢ Technical: Open web standards and API technologies such as RSS, Web Services. Interactive

technologies such as AJAX, dynamic web pages. Currently more developed versions are web

and mobile apps, wearable technologies.

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Web 2.0 from the Business perspective

❖ Active participation of user in form of ➢ Comments ➢ Rankings ➢ Product recommendations

lead to changing of business strategy, product features and product portfolio

❖ Crowd funding where users affect business and product design

❖ Interaction tech. like Ajax and design disciplines “Usability” and “UX” are crafting emotional involvement of users. By this way, available services and products are offered in a better and usable form or as new mashups

❖ Web as a new platform for marketing, advertising, business models, commerce area.

❖ New challenges to reach potential customers: Social Media image, SEO, Partners (Affiliates, Ad providers, comparison sites (product and price), payment solutions, shipping)

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Web 2.0 from the Business perspective

❖ For internal purposes

➢ Increased speed of access to knowledge

➢ Decreased communication and travel costs

➢ Increased possibility to track KPIs

❖ Customer-related purposes

➢ Increased satisfaction

➢ Decreased time to market, support time, shipping

❖ A mix of technologies used by eBusiness

➢ Video sharing

➢ Blogs, RSS

➢ Social networking, Wikis

➢ Rating, Tagging10

eBusiness

❖ Business

Creating organization that creates values

❖ eBusiness

Running a business over electronic systems (online)

❖ eCommerce

Subset of eBusiness that covers all online commerce activities

Consumer-to-Consumere.g. online flea market

Consumer-to-Businesse.g. job portals

Business-to-Consumere.g. online shop

Business-to-Businesse.g. Intel website

Consumer

Business

Consumer Business

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eBusiness

❖ The differences between the (real) traditional Business and (digital) eBusiness:

➢ Target Groups

➢ Advertisement

➢ Communication Controlling

➢ Marketing Channels

➢ Human Resources

➢ Information Services

➢ ...

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Students’ business ideas

❖ Discussion

Have you considered following criteria?

1. Acquisition

2. Activation

3. Retention

4. Referral

5. Revenue

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You are about to start a business

You have a business idea

You think (assume),

you can offer an innovative product

there is a market opportunity but maybe possible risks too

You want to go for your business and take the first steps to found your enterprise

What would you need/do first?

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Company name

LogoWebsite

Slogan

Office

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You are about to start a business

You have more important questions to answer first:

What would you need to know whether it is a valuable idea?

What would you do to know whether it is a profitable business?

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Problem

Solution

Channels

Metrics

Costs

Revenues

Resources

Competitors

Price

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You need a Business Model

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Business Model ≠ Business Plan

❖ Business Model

A single diagram that describes your business. - Steve Blank

The model includes the components and functions of the business. It is simple, intuitively understandable and suitable for iterative development.

❖ Business Plan

A document investors make you write that they don’t read. - Steve Blank

The plan describes in detail how a new business is going to achieve its goals. It will lay out a written plan from amarketing, financial and operational viewpoint.

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Business model

❖ Frameworks

Business model canvas by Alex Osterwalder

Tool:

https://canvanizer.com/choose/business-model-canvases

Lean Canvas by Ash Maurya

Tool:

https://leanstack.com

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Business model

❖ Comparison

Element Business Model Canvas Lean Canvas

Target New and existing businesses Startup businesses purely

Focus Customers, Investors, Entrepreneurs, Consultants, Advisors

Entrepreneurs purely

Customers Lays emphasis on customer segments, channels and customer relationships for all businesses

Does not lay much emphasis on customer segments because startups have no known or tested products to sell

Approach It lays down the infrastructure, lists the nature and sources of financing and the anticipated revenue streams of the business

It begins with the problem, a proposed solution, the channels to achieving the solution, costs involved and the anticipated revenue streams

Competition It focuses on value proposition in quantitative and qualitative terms as way to stay smart in the market

It assesses whether the business has an unfair advantage over the rest and how to capitalize on it for better grounding

Application It fosters candid understanding, creativity, discussion and constructive analysis

It is a simple problem-solution oriented approach which enables the entrepreneur to develop step-by-step

Reference: https://canvanizer.com/how-to-use/business-model-canvas-vs-lean-canvas

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Business Model Canvas

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Business Model Canvas

“The business model canvas — as opposed to the traditional, intricate business plan — helps

organizations conduct structured, tangible, and strategic conversations around new businesses

or existing ones.

Leading global companies like GE, P&G, and Nestlé use the canvas to manage strategy or create new

growth engines, while start-ups use it in their search for the right business model. The canvas’s main

objective is to help companies move beyond product-centric thinking and towards business model

thinking.”

Harvard Business Review:

https://hbr.org/2013/05/a-better-way-to-think-about-yo

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Lean Canvas

“Lean Canvas is designed for entrepreneurs, not consultants, customers, advisors, or investors. That

said, the entrepreneur can greatly benefit by engaging all of those people while validating their

canvas.”

Ash Maurya’s blog article: Why Lean Canvas vs Business Model Canvas?

https://leanstack.com/why-lean-canvas/

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Lean Canvas

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Lean Canvas

I prefer Lean Canvas for capturing Business Model of a new small

enterprise.

It is ok if you can not fill all blocks at the beginning. You should fill at

least the blocks 1 to 5.

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Lean Canvas: Problem & Customer segments

❖ Problems

➢ Customer’s 2-3 top problems based on your

customer segment

➢ User problem should be indirectly considered

➢ Existing alternatives how your customers address

these problems today

❖ Customer segments

➢ Your target audience: customers and users

➢ Better: Create a Lean Canvas for each customer

segment

➢ Early adopters: Split broad customer segments into

smaller ones. Early Adopter is a customer that you

will initially target27

Lean Canvas: Unique Value Proposition

❖ UVP

Clear message that states your offer and why you are

different. Selling with a single statement is too hard. More

important is getting prospect’s attention.

➢ Derive slogans from the problem section

➢ Communicate the benefit of the product instead

of the features.

➢ Research the landing pages of other brands

➢ High-level concept should summarize your UVPs

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Lean Canvas: Solution

❖ Solutions

➢ Define a possible solution for your each problem

➢ Avoid to fully defining a solution in detail.

➢ Don’t spend too much time for writing features

➢ In case you will get a negative feedback, you need new solutions

➢ Solutions defined here will be included in your MVP

MVP: A Minimum Viable Product is the smallest feature set that lets you start learning about

customers.

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Lean Canvas: Channels

❖ Channels

➢ Needed channels to reach early adopters in early

phase

➢ Focus on cheap and channels that don’t require very

specific qualifications

➢ Initial goal in the early phase is learning, getting

feedback. Not to scale.

➢ Group your channels in two categories; marketing

and sale

➢ Try to focus on inbound channels, not outbound

(except interviews)

■ Inbound: Blog, SEO, White paper

■ Outbound: SEM, Print Ads30

Lean Canvas: Revenue streams

❖ Revenue model

➢ Brainstorm different revenue models.

➢ Examine the pricing of existing alternatives.

➢ Pick a starting price to test.

➢ Focus on early adopters

Your starting price will help you indirectly to analyze your target

group, market size, and whether your solution is worth to pay.

Getting paid will be the first type of validation.

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Lean Canvas: Cost structure

❖ Costs

➢ List your operational costs while taking your product

to market

➢ Of course, you can not assume your all costs in detail

➢ Focus on your MVP, you need to build for getting

feedback

➢ Starting points could be

■ Costs to build surveys/making interviews

■ Domain/Hosting costs

■ Programming a landingpage

■ Advertising costs

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Lean Canvas: Key metrics

❖ Metrics

➢ Numbers you need to measure your performance

➢ Identify your top 3-5 key metrics based on the stage

of your product

➢ Map specific user actions you will use to track these

metrics

➢ Use that model, if it fits to your MVP:

■ Acquisition: How do users find you

■ Activation: Do users have a great first

experience?

■ Retention: Do users come back?

■ Referral: How do you make money? Event;

measures that get you paid

■ Revenue: Do users tell others? 33

Lean Canvas: Unfair advantage

❖ Unfair advantage

➢ Identify your barrier to entry against competition

➢ Do you have any existing advantages?

➢ What are some advantages you could develop over

time?

➢ Examples:

■ SEO ranking

■ Large network

■ Insider information

■ Existing customers

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Assignment: Roadmap

❖ Your roadmap should contain following:

➢ Description of your business idea

➢ Business model (Lean Canvas or Business Model Canvas)

➢ Argument for blank sections: In case you have any blank parts on your model, explain

why

➢ List of activities you need to validate your business model

■ Research work

■ Types of analysis

■ Strategies to develop

➢ Explain why you think, you need such activities. And for which sections of canvas are

they needed

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Roadmap comprises following blocks

Business (Product) idea (Assumed) Business model Plan of activities to validate Business Model

Which following or other activities are

you planning to validate your business

model? Which one is to validate what?

❖ Market and target group

analysis

❖ Competitive analysis

❖ Communication and Marketing

strategy

❖ Distribution strategy for sales

❖ Cost and revenue analysis

❖ Strategy to measure your

performance (Key metrics)

❖ Employment strategy

❖ Patent research

❖ ...

How does your assumed business model

look like? Sketch your one-page business

model by following or similar tools

❖ Lean Canvas

❖ Business Model Canvas

Fill the blocks of your business model with

bullet points. The search-based research

has to be performed on the web, using all

available (free) resources.

What is your business idea?

Why is it an innovative idea?

How have you come up with that idea?

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The main source you need to learn

more about Lean Canvas.

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Activities to validate Business ModelOverview of some analysis/strategy types

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❖ Competitive analysis

The purpose of the competitor analysis is to know your competitive landscape, that you understand who your

competitors are, the market size, and where you fit in. The analysis will not only give you a broad picture of the

market that you are playing in, but it will also drive you to modify your concept to better meet customer needs in

the face of competitive pressure.

Your competition provides value to customers, so how should you behave differently? Why should they pick you?

Are you cheaper or do you have a better product?

Analyse your competitors to understand how they operate. Some key questions:

❖ Who is their target segment or demographic ❖ How do they brand and market themselves? ❖ How much revenue have they made (difficult to establish but very useful, look for things like number of

paying customers and average cost they pay)? ❖ When did they begin? What products or services do they offer? (How are your products or services different

from theirs?) ❖ Names of the founders (who are they?)

Activities to validate Business ModelSome analysis/strategy types

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❖ Distribution strategy for sales

Distribution is based on a distribution strategy. Building distribution channels are therefore based on that strategy.

Small business may have a smaller distribution strategy. It can be based on a research / web research. The research

should provide knowledge about the market demand/requirements and branch habits/known and practiced

distribution tactics and techniques. Based on these results, a small distribution strategy can be created.

❖ Point of Sales (PoS): What are the most likely distribution channel of your product? ❖ PoS Research: What are the distribution channels of your challenging product/competitor? ❖ What place? (online shop, phone sales ebay …?) ❖ Payment (credit card, direct money transfer, paypal …)

Activities to validate Business ModelSome analysis/strategy types

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❖ Communication and Marketing strategy

Marketing is based on a strategy. Strategy has many multidimensional objectives. One of them is communication

strategy. In order to create marketing channels, you have to know what your strategy is. However, for a small

business enterprise, a communication strategy is often sufficient in order to create marketing channels. Any

marketing channel must be in compliance with your communication strategy. Be aware: Your communication

strategy must facilitate a 'sale'. Anything based on a faulty communication strategy is determined to failure.

Reputation / Image: How is your product/company must be perceived by my target group?

Product value: What values do you stand for?

Message What is/are the main message(s) of the product?

The goal of communication strategy should be to provide a strong assistance for your sale. Based on that

communication strategy, find and create marketing channels. Try also innovative ways of marketing channels

Activities to validate Business ModelSome analysis/strategy types

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❖ Market and Target Group analysis

By analyzing your audience, you identify the most important characteristics about them and use those to

promote your product or service directly to them. This will not only help you connect with the individuals who are

most likely to use your product or services, but also increase your sales.

Listing and segmenting potential customers are the first step which should be followed by demographic research.

Demographic characteristics include age, gender, marital status, family size, income, education level, occupation,

race, and religion.

For businesses, demographic information includes where the business is located, how many branches they have,

their annual revenue, number of employees, industry, and how long the business has been running.

Conducting market analysis for innovative technologies has its challenges. High-tech environments are

defined by constant change and uncertainty. And you cannot always ask your target customers what they want,

as they cannot imagine what they are missing. If you need plan to provide an information product with innovative

technology, your MVP should help to gather feedback.

Activities to validate Business ModelSome analysis/strategy types

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Information retrieval from WEBWe’ll learn in the next meeting “Techniques and Tools” for

conducting introduced analysis types

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