IEEE-USA Business Models: Identifying How to Succeed

John Prohodsky

IEEE-USA Annual Meeting August 2013

A Business Model?

A business model describes the rationale of how an organization creates, delivers and captures value

Based upon the Business Model Canvas http://www.businessmodelgeneration.com/downl

oads/business_model_canvas_poster.pdf

Description of Business Model Canvas http://www.businessmodelgeneration.com/downl

oads/businessmodelgeneration_preview.pdf

Business Model as Theater

Front stage (right side)

– Presents value

– Seen by customer

Back stage (left side)

– Presents costs

– Seen by business

The Business Model Canvas

Wedding Designer Business Model

Wedding designer

–Designs wedding experience

– Creates a memorable experience

Weddings - $120 billion/year industry

$27,000 average wedding cost

Customer Segment Identification

Mass Market

Niche Market

Segmented

Diversified

Multi-sided

Customer Segment

Value?

Getting the job done

Design

Brand/status

Price

Cost reduction

Risk reduction

Accessibility

Convenience/usability

The Value Proposition Canvas

Value Proposition Canvas Logic

|Gains

| \

Customer Jobs | |

| /

|Pains

|Gain Creators

| \

| |Products and Services

| /

|Pain Relievers

Value Proposition Canvas resources (1)

Value Proposition Canvas

– http://www.businessmodelgeneration.com/downloads/value_proposition_canvas.pdf

Introduction to Value Proposition Canvas

– http://businessmodelalchemist.com/2012/08/achieve-product-market-fit-with-our-brand-new-value-proposition-designer.html

Value Proposition Canvas resources (2)

Testing Value Proposition

– http://businessmodelalchemist.com/2012/09/test-your-value-proposition-supercharge-lean-startup-and-custdev-principles.html

– Validates assumptions

– Very powerful when combined with Lean Startup Methodology

http://theleanstartup.com/principles

Value Propositions:

Channels – reaching customers

How a company communicates with and reaches its Customer Segments to Deliver a Value Proposition

–Marketing

– Sales

– Purchase

Channels phases

Awareness: Referrals, Website and Social media

Evaluation: Present value proposition, social media, referrals

Purchase: Upfront retainer and balance due when wedding design is complete

Delivery: Present plan with instructions or referrals to vendors

After sales: Limited help to solve problems.

Channels:

Customer relationships types

Personal Assistance

Dedicated personal assistant

Self-service

Automated services

Communities

Co-creation

Customer Relationships:

Types of revenue streams

Asset sale

Usage fee

Subscription fee

Lending/Renting/Leasing

Licensing

Brokerage fees

Advertising

Pricing considerations

List price

Product feature dependent

Customer segment dependent

Volume dependent

Revenue streams:

Key resources (assets) -

Physical

Intellectual

Human

Financial

Key resources

Key activities – what makes it work

Production

–Design

–Making

–Delivery

Problem solving

Platform/Network

Key Activities:

Key Partnerships – Networks that make the business model work

Motivations for partnerships

–Optimization and economy of scale

– Reduction of risk and uncertainty

– Acquisition of particular resources and activities

Types of Partnerships

Strategic alliances

Strategic partnerships

Joint ventures

Buyer-supplier

Key Partners

Types of cost structures

Cost–driven

Value-driven

Fixed costs

Variable costs

Economies of scale

Economies of scope

Cost Structure:

Transition from Planning to Modeling

Plans describe what and how

Models capture value, costs and relationships

There are many dfferent models (conceptual frameworks)

Lean canvas

Personal Business Model Canvas

Student Personal Business Model Canvas

We welcome

your questions

and all

offers of assistance…

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