Business Model Canvas (workshop at IIM Ahmedabad)
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Business Model Canvas - A one sheet summary of your venture - Krishnan + Nag, IIMA CIIE, Sep ‘12
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Transcript of Business Model Canvas (workshop at IIM Ahmedabad)
Business Model Canvas- A one sheet summary of your venture -
Krishnan + Nag, IIMA CIIE, Sep ‘12
Story of the $5billion start-up
Cautionary tale
Iridium founded
Spun out of
Motorola
Launch Bankrupt$5.2b investment15 rockets
72 satellites
19901987 19981997
Iridium founded
Spun out of
Motorola
Launch Bankrupt$5.2b investment15 rockets
72 satellites
19901987 19981997
Target price: $7/minTarget users: 42million
Viable price: $0.5/minActual users: 30,000
Traditional start-up model
Develop conceptGet funding
Build product Alpha / beta test
Customer Shipment
Write business plan
Build the product Test / fix Ship / fix
Planning / collateral PR / plan launch Launch / Demand gen.
Initial sales rep Build sales team / selling
Build product and offering
Alpha testMarket test
Big-BangLaunch after
3 years
Develop conceptGet funding
Build product Alpha / beta test
Customer Shipment
Build product and offering
Alpha testMarket test
Big-BangLaunch
Unbridled enthusiasm
Rude awakening
False sense of security
Resettingexpectations
Predictable disaster
“Big Up Front Design”
90-95% of new ventures fail to meet projections
(assumptions up front, market contact at the end)
The traditional methods of start-ups aren’t working
Story of the Rs. 500 start-up
Who is this legendary entrepreneur?
Karsanbhai PatelNirma
How do you compete with a Rs. 200cr brand?
Answer: Start on a bicycle!
Lessons from Karsanbhai and Nirma
Start with a strong vision, but start small
Clear value-prop for untapped segment
Constantly validate all assumptions in the market
Iterate and learn
2 stages of start-ups
Search Scale
Source: Steve Blank
Focus on Experimentation
Focus on Execution
Finding your business model
Limited planning, more experimentation and exploration
Search Principle # 1: Business Model Canvas
VALUE
PROPOSITION
CHANNELS
CUSTOMER
RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMS COST STRUCTURE
KEY
PARTNERS
KEY
RESOURCES
KEY
ACTIVITIES
Source: “Business Model Generation”, Osterwalder & Pigneur
Minimum
Viable
Too-basic products no one wants
Incumbentproducts
Minimum + ViableFertile area for new
products
Search Principle #2: Minimum Viable Product
Excel competitor: Minimum Viable ?
Minimum Viable ?
Minimum Viable Product for Google Docs
Value prop
Learn
Ideas(BMC)
Build
OfferingMeasure
Data
Minimise the total time through the
loop
Search Principle #3: Focus on exploration
How it all fits together
Agile software development
BMC examples…
What are the children carrying?
Godrej ChotuKool
VALUE
PROPOSITION
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMS COST STRUCTURE
KEY
PARTNERS
KEY RESOURCES
KEY
ACTIVITIES
Vision: “Refrigeration for rural India”
Economical, effective, portable cooling solution
(constraints of electricity, space, cost solved)
Indian households with income of Rs.10,000/mo whom traditional refrigerators don’t serve
Unit sales
Microfinance institutions
Sarpanchs
Frugal engineering experts
Through retailers
Rural retailersVillage ambassadors
R&DPRAdvertising
Factory, raw material, SG&A
Competitive BMCs
vs.
Flipkart
VALUE
PROPOSITION
CHANNELS
CUSTOMER
RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMS COST STRUCTURE
KEY
PARTNERS
KEY
RESOURCES
KEY
ACTIVITIES
VALUE
PROPOSITION
CHANNELS
CUSTOMER
RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMS COST STRUCTURE
KEY
PARTNERS
KEY
RESOURCES
KEY
ACTIVITIES
Flipkart: “Online shopping for all Indians”
• Convenience• Wide selection• Cheaper• Trust (CoD)
• Urban Indian book lovers
• Internet-connected people with no credit cards
• First-time online shoppers
Book sales
Publishers
• Delivery staff• Technology
capability
Through email, online chat and database marketing
Web
• Supply chain optimisation
• Delivery optimisation• SEO• Auto
recommendations
Technology, warehouses, deep discounts
Crossword
VALUE
PROPOSITION
CHANNELS
CUSTOMER
RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMS COST STRUCTURE
KEY
PARTNERS
KEY
RESOURCES
KEY
ACTIVITIES
VALUE
PROPOSITION
CHANNELS
CUSTOMER
RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMS COST STRUCTURE
KEY
PARTNERS
KEY
RESOURCES
KEY
ACTIVITIES
Crossword: “The best browsing experience”
• Urban Indian book lovers
• Companies
• Stationery buyers
• Casual mall visitors
• Book sales
• Advertising
• Publishers• Franchisees• Shopper’s
Stop (parent co)
• Real estate
In store, Crossword club
• Store• Phone• Web• Institutional
• Sourcing• Visual merchandising• Book reading sessions• Crossword Literary
Award
Real estate, cost of inventory• Coffee• Trinkets
• Browsing experience
• Instant gratification
VALUE
PROPOSITION
CHANNELS
CUSTOMER
RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMS COST STRUCTURE
KEY
PARTNERS
KEY
RESOURCES
KEY
ACTIVITIES
Amul: “High-quality butter when you desire it”
• Mass market (customer: housewife)
• Restaurants and institutions
• Product sales
• Anand milk union
• Gujarat milk federation
• Anand milk union
• Transactional• Through mass
media
• Retail trade• Direct (for
institutional sales)
• Brand building• R&D into preservation
Factory, equipment, inventory
• Guarantee of high quality (brand)
• Access and availability
• Convenience• Emotional value
VALUE
PROPOSITION
CHANNELS
CUSTOMER
RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMS COST STRUCTURE
KEY
PARTNERS
KEY
RESOURCES
KEY
ACTIVITIES
Mid Day: “Evening gossip companion”
• Mumbai English-speaking mass market
• Office-goers• Commuters
Advertisers + Agencies:• Mass market• Mumbai• Classified• Discount
• Retail offtake (5%)• Advertising (95%)
• PTI, AP etc.
• Journalists
• Salespeople with media-planning knowhow
• Transactional• Deep multi-year
high-touch relationships
• Railway platforms• Kirana shops
• Direct
• Brand building• Distribution• Newsgathering
• Improving ABC numbers in key demographics
Newsroom, newsprint
• Light entertainment after/during a busy day
• “2nd newspaper”
• Mumbai-wide reach of readers in a relaxed context in a unique time window
VALUE
PROPOSITION
CHANNELS
CUSTOMER
RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMS* COST STRUCTURE
KEY
PARTNERS
KEY
RESOURCES
KEY
ACTIVITIES
Khan Academy: “Education for everyone”
• School/college age students with inadequate access to school/college
• Working people with specialised learning needs
• School/college students seeking reinforcement
• Certifications?
• Advertising
• Gates Foundation
• Hardware makers?
• Governments?
• Volunteer translators
• Content creators• Recommendatio
n engines etc.• Salman Khan –
personal brand
Deep personalisation (automated)
• PC/tablet• Smartphone• Featurephone
• Pedagogy research• Content creation• Content delivery• Business model
discovery
Hardware, bandwidth, content creation
• Placements?
• Comprehensive world-class lessons for free
• Personalised, self-directed learning
*this could be a multi-sided market: students, advertisers, recruiters
Pivot / Course correction
Acknowledgements
www.businessmodelgeneration.com
www.steveblank.com
Summary: why BMCs are important
Elevator pitch
Maximise time from mentors
Make minimum viable offering, learn, pivot, iterate
The foundation for your business plans
Continue the conversation…
[email protected], [email protected]
LinkedIn: krishnan-natarajan, knagarjun
