digital business models 101
DESCRIPTION
An introduction to the framework "Business Model Canvas" illustrated by concrete Business Models of digital champions such as Linkedin, Scoop.it, HelloMentor, Viadeo, HP, eBay, Google, GMF, AXA, P&G.TRANSCRIPT
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Business Model Canvas 101
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The Basics
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A Business is a System
It seems like a whole. But you can deconstruct it.
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The Business Model Canvas is a call-to-action. Execution vs abstraction.
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50,98% of innovations come from business models*
*
* Science, technologie et industrie : Perspectives de lʼOCDE, 2008.
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The BasicsBusiness 101
1
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Value DeliveringValue Creation Value Proposition
1
Business is a JourneyKISS version.
Goal: adding more value along the way
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DistributionInput OutputProcess Customers
1
Detailed version.Business is a Journey
activity + ressources channels + customer relationships
Goal: adding more value along the way
suppliers + partners
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The BasicsFinance 101
2
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!Finance
Business Journeyvalue (input) actualisation of the
added value (clients)potential added value (output)
revenue costs
financial flows
Goal: Capturing some of the value added (revenue - costs)
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The Building Blocks3
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DistributionInput Output
Costs Revenue
Process Customersactivity + ressources channels + customer relationshipssuppliers + partners
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Channels
Key Partners
ValueProposition
Costs Revenue
Activity
CustomerSegments
Ressources
CustomerRelationships
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How to use it?4
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Customers.How can you make their lives better?
Channels
Key Partners
ValueProposition
Costs Revenue
Activity
CustomerSegments
Ressources
CustomerRelationships
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Value proposition.Is there a real fit between the problem & the solution?
Channels
Key Partners
ValueProposition
Costs Revenue
Activity
CustomerSegments
Ressources
CustomerRelationships
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Channels.What interfaces will you use to communicate & sell?
Channels
Key Partners
ValueProposition
Costs Revenue
Activity
CustomerSegments
Ressources
CustomerRelationships
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Customer relationships.How will you interact?
Channels
Key Partners
ValueProposition
Costs Revenue
Activity
CustomerSegments
Ressources
CustomerRelationships
CustomerRelationships
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Revenue.What will they pay?
Channels
Key Partners
ValueProposition
Costs Revenue
Activity
CustomerSegments
Ressources
CustomerRelationships
CustomerRelationships
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Channels
Key Partners
ValueProposition
Costs Revenue
Activity
CustomerSegments
Ressources
CustomerRelationships
CustomerRelationships
Ressources.What asset do you need to build this VP?
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Activity.How will you build this VP?
Channels
Key Partners
ValueProposition
Costs Revenue
Activity
CustomerSegments
Ressources
CustomerRelationships
CustomerRelationships
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Key Partners.Who are your allies & suppliers?
Channels
Key Partners
ValueProposition
Costs Revenue
Activity
CustomerSegments
Ressources
CustomerRelationships
CustomerRelationships
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Costs. What are the main sources of costs?
Channels
Key Partners
ValueProposition
Costs Revenue
Activity
CustomerSegments
Ressources
CustomerRelationships
CustomerRelationships
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5
* source
Principal Business Model Inspired by the great work of Elton Pickford
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A
* theorized by Chris Anderson in his book “The Long Tail“
The Long Tail*Eg: Amazon, eBay, Netflix, Lego
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eBay.com
Paypal
Buying and sellingfirst- or second-
hand goods
Platform creation & animation
Platform
Online profiles
Case study: eBay
Marketplace for niches
ProfessionalSellers
Anyone
Niches segments
Fees on theselling price Pay by postCosts of platform & HR
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B
* Also see the book “Free“ by Chris Anderson (again)
Multi-sided platforms* Eg: Viadeo, LinkedIn, Google, Sony, Microsoft, Apple, Facebook
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google.com
Free account
Costs of platform & HR
Platform management
& services
Platform
Case study: Google
Free research
Advertisers
Internautes
Keywordsbidding
Contenteditor
Content monetization
FreeFree
widgets
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C Freemium*Eg: LinkedIn, Flickr, Evernote, Scoop.it
* Also see the book “Free“ by Chris Anderson (again)
Premium accounts
Free accounts
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LinkedIn.com
Free accountwith standard
features
Costs of platform & HR
Platform management
& services
Platform
Case study: LinkedIn*
Occasionalusers
Advancedusers
Keywordsbidding
FreeFree
Advanced features
* it’s also a multi-sides platform you could add advertisers & HR companies
Customizedmessages
(auto+hand made)
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D Inverted FreemiumEg: Axa, GMF
Beneficiaries
Subscribers
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WebsitePhoneEmailStores
Insurance
Ad + HR + webplatform
Client acquisition
Platform
Case study: GMF*
Subscribers
Beneficiaries0 to excess payment
* it’s also a multi-sides platform you could add advertisers & HR companies
On timeManagement of the claims
HR
reimbursementsInsurance premium
Reinsurancecompanies
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D Freebie marketingEg: hp, Epson, Gillette
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Distributors
Inktjet printers
Marketing + Fabrication + Logistics + R&D
Marketing
IP
Case study: hp
Ink cartridges
* branding is always an asset but even more strategic in this kind of BM
FidelityLogistics
Branding*
R&DClients
Constraints
Replacements of cartridges
First buy
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E Open Business Model Eg: P&G
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R&D inside the company
Case study: P&G
* branding is always an asset but even more strategic in this kind of BM
R&Dinside
R&D inside
Innocentive (web)
yourEncore.com
IP from other firms
Researcher outside the company
Retired Researcher
increase of R&D productivity: 85%tiny increase of R&D costs
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Case studies6
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Advanced Business ModelA
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Channels
Key Partners
ValueProposition
Costs Benefit
Activity
CustomerSegments
Ressources
CustomerRelationships
Case study: Amazon
Exercise:Map out the BM with at least 3 value propositions
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Channels
Key Partners
ValueProposition
Costs Benefit
Activity
CustomerSegments
Ressources
CustomerRelationships
Case study: Facebook
Exercise:Map out the BM with at least 3 value propositions
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Channels
Key Partners
ValueProposition
Costs Benefit
Activity
CustomerSegments
Ressources
CustomerRelationships
Case study: Meninvest
Exercise:Map out the BM with at least 3 value propositions
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Channels
Key Partners
ValueProposition
Costs Benefit
Activity
CustomerSegments
Ressources
CustomerRelationships
Case study: Twitter
Exercise:Map out the BM using their growth strategy (check their S1)
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Channels
Key Partners
ValueProposition
Costs Benefit
Activity
CustomerSegments
Ressources
CustomerRelationships
Case study: Angrybirds
Exercise:Map out the BM with at least 3 value propositions
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Financial viability & projectionB
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Channels
Key Partners
ValueProposition
Costs Benefit
Activity
CustomerSegments
Ressources
CustomerRelationships
Case study: Viadeo
Exercise: Map out the BM & try to figure out their revenue Assumptions: 50M users, 15% premium users with 20% churn rate of PU //revenue split=50% premium user, 35% HR firms, 15% ads
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Channels
Key Partners
ValueProposition
Costs Benefit
Activity
CustomerSegments
Ressources
CustomerRelationships
Case study: HelloMentor
Exercise:Map out the BM Determine how many users they should get to be profitable (average 25€, 15% fees). Assumptions: team of 10 employees (each costs 60K), 2K€ RE.
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Channels
Key Partners
ValueProposition
Costs Benefit
Activity
CustomerSegments
Ressources
CustomerRelationships
Case study: scoop.it
Exercise:Map out the BM Determine how many users they should get to be profitable (check their pricing). Same assumptions as before, highlight yours.
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BonusC
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Channels
Key Partners
ValueProposition
Costs Benefit
Activity
CustomerSegments
Ressources
CustomerRelationships
What about you?
Exercise: Map out the BM of your project or someone from the class Determine how many users they should get to be profitable (check their pricing).Highlight your assumptions.