The Business Model Canvas

Dr Tendayi Viki

Follow Me: @tendayiviki

Startups are NOT smaller

versions of big companies! (Steve Blank & Bob Dorf, 2012)

A Startup is A Thesis

A Path for Searching: • For a sustainable and profitable

business model.

The Hypothesis Driven Startup

A Startup is a Research Project: • We should not be making business plans,

we should make research proposals.

Eric Ries (2011) The Lean Startup

http://lean.st

Ash Maurya (2012)Running Lean

http://www.runningleanhq.com/

Ash Maurya (2012)Running Lean

http://www.spark59.com/

CASE STUDY DISCUSSION

What is an MVP?

With MVPs, how can you protect your brand?

What is the difference between:

build-it-and-they-will-come

the waterfall method

the just-do-it approach

What is product/market fit?

What is scaling a business?

What is the problem with premature scaling?

The Business Model CanvasDocument Your Plan A

Ash Maurya (2012)Running Lean

Osterwalder & Pigneur (2010)http://www.businessmodelgeneration.com/

Osterwalder & Pigneur (2010)http://www.businessmodelgeneration.com/

Customer Segment This block defines the different groups of

people or organizations that a company aims to reach and serve.

• Mass Market

• Niche Market

• Segmented Market

• Diversified Market

• Multisided Market

Osterwalder & Pigneur (2010)http://www.businessmodelgeneration.com/

Value Propositions The value propositions block describes the

product/service; and how it creates value for your customer segments.

Performance

Price

Design

Brand/Status

Convenience/Usability

Risk Reduction

Osterwalder & Pigneur (2010)http://www.businessmodelgeneration.com/

Channels The channels block describes how a company

reaches its target segments to deliver the value proposition.

Osterwalder & Pigneur (2010)http://www.businessmodelgeneration.com/

Customer Relationships The customer relationships block describes

the types of relationships a company establishes with their customers.• Personal Assistance

• Dedicated Personal Assistance

• Self Service

• Automated Service

• Communities

• Co-creation

Osterwalder & Pigneur (2010)http://www.businessmodelgeneration.com/

Revenue Streams The revenue streams block describes how

the company generates revenues from its customer segments.

• Asset Sale

• Usage Fee

• Subscription Fees

• Lending/Renting/Leasing

• Licensing

• Brokerage Fees

• AdvertisingOsterwalder & Pigneur (2010)

http://www.businessmodelgeneration.com/

Key Resources The key resources block describes the most

important assets required to make your business model work.• Physical

• Intellectual

• Human

• Financial

Osterwalder & Pigneur (2010)http://www.businessmodelgeneration.com/

Key Activities The key activities block describes the most

important things a company must do to make its business model work.• Production

• Problem Solving

• Platform/Network

Osterwalder & Pigneur (2010)http://www.businessmodelgeneration.com/

Key Partnerships The key partnerships block describes the

network of suppliers and partners that make your business model work.

• Optimization and economies of scale

• Reduction of risk and uncertainty

• Acquisition of resources and activities

Osterwalder & Pigneur (2010)http://www.businessmodelgeneration.com/

Cost Structure The cost structure describes all the costs

incurred to operate a business model.

• Cost Driven

• Value Driven

• Fixed and Variable Costs

• Economies of Scale and Scope

Osterwalder & Pigneur (2010)http://www.businessmodelgeneration.com/

Osterwalder & Pigneur (2010)http://www.businessmodelgeneration.com/

Osterwalder & Pigneur (2010)http://www.businessmodelgeneration.com/

Your Product is NOT the Product It is important to realise that a product or service idea is not

sufficient for success. You could have a good idea, but if you do not have a good

business model to support it, then your business will fail. It is not enough to just have a good product, it must be delivered to

customers in a manner that is sustainably profitable.

A lot entrepreneurs focus too much on just the product. But the same amount of effort needs to be put into developing

the business model. Indeed, business model innovation by itself can be game changing.

What is the Difference?

BUSINESS MODEL PATTERNS

UNBUNDLING

Patrick van der PijlCEO | Business Models Inc.http://www.businessmodelsinc.com

INFRASTRUCTURE MANAGEMENT

CUSTOMER RELATIONSHIPS

CONTENT PROVIDER

THE LONG TAIL

MULTISIDED PLATFORMS

FREE AS A BUSINESS MODEL

CLASS ACTIVITY

What is the business model for Nespresso?

Osterwalder & Pigneur (2010)http://www.businessmodelgeneration.com/

What is the business model for Apple IPod?

Osterwalder & Pigneur (2010)http://www.businessmodelgeneration.com/

What is the business model for Amazon?

Thank You&

See You Next Week