business models, technology roadmaps & exit strategies

Business Models, Go To Market Strategies & Exit Strategies

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Business Models

aplanforthesuccessfuloperationofabusiness,identifyingsourcesofrevenue,theintendedcustomerbase,products

4Basic Types of Business Models

MANUFACTURER

Distributor

Retailer

Franchise

But, you need a bit more granularity than that…

The LICENSING MODELSignoverrightstocommercialisation toanotherparty

The Add-On ModelCompetitivelypricedcoreoffering

Numerousextrasthatdriveupthefinalprice

The Advertising ModelOfferadvertisersaccesstohighlytargetedconsumerniches(oftenintheabsenceofsellingtheirgoodsorservices)

The AFFILIATE MODELSomeonewhohelpssellaproductinreturnforcommission,eveniftheyneveractuallytakeownership(orevenhandle)theproduct

The BAIT AND HOOK MODELDisproportionateamountsofthevaluearecapturedoncomponents,refills,etc.

Switchingcostsresultsinmonopolisticpricing

The FREEMIUM MODELGiveawaysomethingforfreeinreturnforyourpersonaldetailssotheycanthenmarkettoyousoyouwillbuyfromtheminthefuture

The LOW COST MODELDrivesignificantvolumesofcustomersbychargingaverylowprice

The LOSS LEADER MODELYoulosemoneysellingatthatprice,butitenablesadifferentlucrativeopportunity

The PREMIUM MODELYouchargesomuchforit(eithervanityornecessitydrivers)thatyourprofitmarginsareastronomicalandcoverthefactthatyourcustomerbaseisquitelimited

The PAY AS YOU GO MODELActualusageismeteredandyoupayonthebasisofwhatyouconsume

The RECURRING REVENUE MODELSecurethecustomeronalongtermcontractsothattheyareconsumingyourproductorservicewellintothefuture

The DEMAND AGGREGATION MODELAssembleallthesellersandbuyersforsomestuffinthesamevirtuallocation

The PERSON-TO-person exchangesConnectonepersonthathassomethingsomeoneelsewantswiththepersonwhowantsit

The ONE-OFF EXPERIENCE MODELNowism offeringuniqueexperiencestocustomersatagivenplaceduringaspecificevent

Socialmedia+offlineeventorganisers,pop-upstores,onlineretailers

DisruptionItishappeningeverywhere• Education► TEDEd• Finance► Bitcoin,ApplePay• Technology ► Nest•Media► Spotify,Netflix• Telco►WhatsApp•Medical► Automata• Travel► Airbnb

So… what’s your business model?

GO TO MARKET STRATEGIES

AND TECHNOLOGY ROADMAPS TOO

A go-to-marketstrategy (GTM strategy)isanactionplanthatspecifieshowacompanywillreachcustomersandachievecompetitiveadvantage.ThepurposeofaGTM strategy istoprovideablueprintfordeliveringaproductorservicetotheendcustomer,takingintoaccountsuchfactorsaspricinganddistribution.

WHAT…Who…How…Where…

…tosell

Go-To-Market Strategy1. Definemarketvalueproposition2. Identifyprimarytargetmarket3. Reviewexistingmarketchannels4. Createdetailedchannelapproach

8Basic building blocks

Business Summary

Product Strategy

Channel Strategy

Marketing Strategy

Customer experience

Technical requirements

Evaluation

Timeline & Execution

Readyfireaim

Strategic objectiveso Createawareness,firstcustomersoMaximizemarketshareo Defendmarketshare(againstcompetitors)oMaximumprofitability

Technology Roadmaps

Technology roadmapsAplanningprocessforaspecificproductorservicetoidentify

o Technicalprocesseso Technologygapso Opportunities&riskso Criticalrequirements,targetso TechnologyalternativesoMilestonesformeetingthosetargets

7Basic building blocks

Business & technical assets

Cost/complexity drivers

Product hypothesis

Product requirements

Product planning

Timeline

Risk & mitigation strategies

High level example1. Productthatisthefocus

oftheroadmap2. Criticalsystem

requirements&theirtargets

3. Majortechnologyareas4. Technologydrivers&

theirtargets

Energy-efficientvehicle

MPG,reliability,safety,costTargets:100mgpby2017&150mpgby2025

Materials,enginecontrols,sensors,modeling,simulation

High level example5. Technologyalternatives6. Recommendtechnology

topursue7. Createthetechnology

roadmapreport

Technologyalternativesthatcansatisfythesetargetsidentifiedwithestimatedtimelineforhowitwillmaturewithrespecttothetechnologydrivertargets.Identifydecisionpointsforwhenitwillbedroppedfromfurtherconsideration.

Technology roadmapsAplanningprocessforaspecificproductorservicetoidentify

o Technicalprocesseso Technologygapso Opportunities&riskso Criticalrequirements,targetso TechnologyalternativesoMilestonesformeetingthosetargets

EXITSTRATEGIES

An exitstrategy isacontingencyplanthatisexecutedbyaninvestor,trader,venturecapitalistorbusinessownertoliquidateapositioninafinancialassetordisposeoftangiblebusinessassetsoncecertainpredeterminedcriteriaforeitherhasbeenmetorexceeded

Merger & Acquisition (M&A)• Win-winforborderingcompanieswithcomplementaryskills,assets,resources• Largecompanycanmorequicklygrowrevenueoraccesscustomersthancreatenewproductsorganically

Initial public offering (IPO)• Offeringsaleofstockinthebusinessonpublicmarkets(liketheASX)

Sell to another person• Offeringsaleofstockinthebusinessonpublicmarkets(liketheASX)

Sell to Your Employees• Anemployeestockoptionplancandirectpayrollintoatrusttopurchaseinvestments,likecompanystock

Milking the cow• Distributeprofitsasdividendstoinvestors• Payoffinvestors• Hiresomeoneelsetorunit

Liquidation & close• Closethebusinessdoorsandliquidateassets

Exit Tips• Mostofthetime,companiesaresold,notbought,andrequireanactivesalesprocess

• Dealscanunraveliftheydragon– coldfeetphenomenon• Everystepshouldhaveadeadline

• Establishtrustandopencommunication–frictionistheenemy• Cleanhousebeforethevisitorsarrive

Exit Tips• Don’tgetgreedy– holdingoutforallincreasesyourchancesofgettingnone

• Planfortheexitearly– theendgameshouldbepartofyouroveralloperatingstrategy

• Negotiatetoughbutfair– rememberthatyoumaybeworkingfortheacquirerwhenthedustsettles

Strategy for your exit strategy• DealStrategy – who?When?How?Why?• Positioning&Pitch – makingthemwantyou• Packaging&Valuation – thewholenineyards• ProcessManagement – Setmeetings,generatemomentum,managecommunications• Execution – getheatonthedeal

WANT TO KNOW MORE?GET IN TOUCH!

www.monash.edu/entrepreneurship@monashGENERATORFacebook.com/monashGENERATOR

7InnovationWalkAG01-04(ClaytonCampus)entrepreneurship@monash.edu