Chemical Entrepreneurship #4 - Business Model Analysis - How Will Your … · 2015-01-02 ·...
Transcript of Chemical Entrepreneurship #4 - Business Model Analysis - How Will Your … · 2015-01-02 ·...
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Continues Thursday, June 20, 2013 @ 2PM EST
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Acknowledgement:
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Business Model Analysis:
How will your company make money?
Download the presentation ONE WEEK after webinar:
http://acswebinars.org/chemical-entrepreneurship-2013
ACS WEBINARS™ May 16, 2013
Neil Senturia
CEO, Blackbird Ventures
Barbara Bry
COO, Blackbird Ventures
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Developing a Viable Business Model
How will my company make money?
American Chemical Society
May 16, 2013
Barbara Bry and Neil Senturia
Definition of a Business Model
Summation of the core business decisions and trade-offs employed by a company to earn a profit (HBS Note on Business Model Analysis)
1. Revenue sources
2. Key expenses
3. Investment size
4. Critical success factors
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Question
Which is more important early on in your company?
1. Getting revenue early
2. Developing a complete product
Lean Business Model
• Build a minimally viable product defined by Eris Reis as “that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”
• Get customer feedback quickly
• Pivot based on feedback
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Revenue Sources
• Customer: Who are you selling to? What are their problems/needs?
• Value Proposition: What value do we deliver that is better than other solutions?
Why Althea?
• Experience
• Flexibility
• Scalability
• Customized Solutions
• Reliability
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Proflowers.com
• A large market and the convenience of shopping online won’t cut it
• What is the problem you’re trying to solve?
– Flowers aren’t fresh: 7-9 days in transit
– Flowers are expensive: Inefficient middlemen
– Florists lack quality incentive
– What you see is not always what you get
If the supply chain’s broke – fix it
Grower
Importer/
Distributor
Wholesaler
Retailer’s and
Internet Order Takers
Consumer
Grower
2 days
2 days
2-3 days
2-5 days
1-2 days
Brick & Mortar Proflowers.com
INTERNET
Elapsed Time: 9-12 Days 2-3 Days
Consumer
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Today’s ECG/EEG sensors, however: -Require adhesives and skin-irritating gels
-Number one patient complaint against mobile ECG/EEG devices
-Need for new, patient-friendly, sensor technologies
-Large usability barrier outside of laboratory environments
ECG/EEG: -Simple to build
-Inexpensive to use
-Non-invasive for the subject
-Widely used in clinical and research settings
-Diagnostically useful information
Motivation
Question
Is it better to develop a quicker smaller idea or a bigger idea that requires more time/$ ?
1. Work on a smaller idea– a feature– that you can develop quickly and cheaply
2. A bigger idea– complete product– that requires more time and money
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Revenue Models
1. Subscription – SalesForce.com, Netflix You can make it free for basic service, charge for premium– LinkedIn 2. Volume or unit based – customers pay a fixed price per unit– scientific products, restaurant, Proflowers– Razer/Razer blade model is common for some scientific products and medical devices 3. Advertising based – Google, Yahoo, TV, radio
Revenue Models continued
4. Licensing and Syndication – Big pharma pays licensing fees for your technology
5. Transaction Fee – Charles Schwab
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Expenses
1. Fixed – rent, management team, core scientists 2. Variable —materials, lab equipment, sales commissions 3. Non-recurring – buying a building, new computers Think about your core competencies– What do I need to do in-house? What can I outsource? *Photo Top Right -Experimenters taking an X-ray with an early Crookes tube apparatus, from the late 1800s. The upper man is examining the bones of his hand with a fluoroscope screen. The lower man is taking a radiograph of his hand with a photographic plate.
Major Costs
1. People – at what points in your growth curve do you need to add more scientists, customer service reps, administrative overhead?
2. Inventory —more important in manufacturing, what supplies do you need to keep on hand?
3. Rent
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Major Costs
4. Marketing-Advertising – How much is it going to cost you to acquire and retain a customer? How long is your sales cycle? How long before you get paid?
Customer Acquisition and Retention
How are you going to reach your customer? - Your own sales force - Someone else’s sales force - Distributors - Internet - Combination
How are you going to manage the long-term relationship with your customer so that they continue buying from you?
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Cost Analysis
1. Is business model based on fixed, semi-variable or non-recurring?
2. How much volume can we do with our starting fixed base?
3. What primary drivers could change over time?
4. What are the major costs?
Investment Size
• How much money do we need to raise until we reach break even?
• How long and how much money will it take to develop my product?
• How quickly can I sell the product to the customer? When will I get paid?
• What milestones can we achieve with X $$?
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Critical Success Factors
1. Timing and cash flows
2. Select 3-4 of the most important parameters– sales growth, new customer acquisition rate (and costs)
3. Look at what happens to your cash needs when you change the parameter, both up and down.
Keyword for today!
“Falafel”
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oto
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Resources
Why the Lean Start-Up Changes Everything
by Steve Blank, Harvard Business Review, May 2013
Note on Business Model Analysis
Harvard Business School
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Questions & Answers
We want to hear what’s on your mind?
Ph
oto
co
urt
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of
Bre
vin
Bla
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Business Model Analysis:
How will your company make money?
Download the presentation ONE WEEK after webinar:
http://acswebinars.org/chemical-entrepreneurship-2013
ACS WEBINARS™ May 16, 2013
Neil Senturia
CEO, Blackbird Ventures
Barbara Bry
COO, Blackbird Ventures
38 Co-produced with UC San Diego’s von Liebig Center
5/20/2013
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Acknowledgement:
The 2013 Chemical Entrepreneurship Series is
co-produced by UC San Diego von Liebig
Entrepreneurism Center.
39 Contact ACS Webinars™at [email protected]
http://www.jacobsschool.ucsd.edu/vonliebig
How has ACS Webinars benefited you?
Be a featured fan on an upcoming webinar! Write to us @ [email protected]
Fan of the Week
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“Your speakers are the best!! They are
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enrich my knowledge of a subject so much
in just one hour. The convenience of the
webinars is fantastic!"
Donna Bush, Ph.D.
Forensic Toxicologist, HHS
TM
5/20/2013
21
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Thursday, May 23, 2013
The Transition from Graduation to a
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Ms. Anne DeMasi, Hazard Communications Manager, Chemtura
Dr. Michael Abrams, Principal Scientist, Arkema
Ms. Dawn Mason, HR Manager, Eastman Chemical Company
Thursday, May 30, 2013
How to Catch a Poisoner – The Sequel
Ms. Deborah Blum, Pulitzer-Prize Winning Science Author
Dr. Darren Griffin, University of Kent
Contact ACS Webinars™ at [email protected] 42
5/20/2013
22
Upcoming ACS Webinars™ www.acswebinars.org
“Everyone today must think like an entrepreneur whether it’s in your own
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Continues Thursday, June 20, 2013 @ 2PM EST
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ACS members who attend 7 out of 9 sessions get a Certificate of Completion.
Contact ACS Webinars™ at [email protected] 43
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• Brush up on your foreign language skills
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• Enhance your resume!
You will find more international opportunities at the International Center
www.acs.org/ic
5/20/2013
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And now your chance to win!
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To be a successful entrepreneurial
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If you enjoyed this ACS Webinar today…
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Thursday, May 23, 2013
The Transition from Graduation
to a Career in Industry
Ms. Anne DeMasi, Hazard Communications Manager, Chemtura
Dr. Michael Abrams, Principal Scientist, Arkema
Ms. Dawn Mason, HR Manager, Eastman Chemical Company
Thursday, May 30, 2013
How to Catch a Poisoner – The Sequel
Ms. Deborah Blum, Pulitzer-Prize Winning Science Author
Dr. Darren Griffin, University of Kent
Contact ACS Webinars™ at [email protected] 48