Business Model Canvas 101

The Basics

A Business is a System

It seems like a whole. But you can deconstruct it.

The Business Model Canvas is a call-to-action. Execution vs abstraction.

50,98% of innovations come from business models*

*

* Science, technologie et industrie : Perspectives de lʼOCDE, 2008.

The BasicsBusiness 101

1

Value DeliveringValue Creation Value Proposition

1

Business is a JourneyKISS version.

Goal: adding more value along the way

DistributionInput OutputProcess Customers

1

Detailed version.Business is a Journey

activity + ressources channels + customer relationships

Goal: adding more value along the way

suppliers + partners

The BasicsFinance 101

2

!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)

The Building Blocks3

DistributionInput Output

Costs Revenue

Process Customersactivity + ressources channels + customer relationshipssuppliers + partners

Channels

Key Partners

ValueProposition

Costs Revenue

Activity

CustomerSegments

Ressources

CustomerRelationships

How to use it?4

Customers.How can you make their lives better?

Channels

Key Partners

ValueProposition

Costs Revenue

Activity

CustomerSegments

Ressources

CustomerRelationships

Value proposition.Is there a real fit between the problem & the solution?

Channels

Key Partners

ValueProposition

Costs Revenue

Activity

CustomerSegments

Ressources

CustomerRelationships

Channels.What interfaces will you use to communicate & sell?

Channels

Key Partners

ValueProposition

Costs Revenue

Activity

CustomerSegments

Ressources

CustomerRelationships

Customer relationships.How will you interact?

Channels

Key Partners

ValueProposition

Costs Revenue

Activity

CustomerSegments

Ressources

CustomerRelationships

CustomerRelationships

Revenue.What will they pay?

Channels

Key Partners

ValueProposition

Costs Revenue

Activity

CustomerSegments

Ressources

CustomerRelationships

CustomerRelationships

Channels

Key Partners

ValueProposition

Costs Revenue

Activity

CustomerSegments

Ressources

CustomerRelationships

CustomerRelationships

Ressources.What asset do you need to build this VP?

Activity.How will you build this VP?

Channels

Key Partners

ValueProposition

Costs Revenue

Activity

CustomerSegments

Ressources

CustomerRelationships

CustomerRelationships

Key Partners.Who are your allies & suppliers?

Channels

Key Partners

ValueProposition

Costs Revenue

Activity

CustomerSegments

Ressources

CustomerRelationships

CustomerRelationships

Costs. What are the main sources of costs?

Channels

Key Partners

ValueProposition

Costs Revenue

Activity

CustomerSegments

Ressources

CustomerRelationships

CustomerRelationships

5

* source

Principal Business Model Inspired by the great work of Elton Pickford

A

* theorized by Chris Anderson in his book “The Long Tail“

The Long Tail*Eg: Amazon, eBay, Netflix, Lego

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

B

* Also see the book “Free“ by Chris Anderson (again)

Multi-sided platforms* Eg: Viadeo, LinkedIn, Google, Sony, Microsoft, Apple, Facebook

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

C Freemium*Eg: LinkedIn, Flickr, Evernote, Scoop.it

* Also see the book “Free“ by Chris Anderson (again)

Premium accounts

Free accounts

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)

D Inverted FreemiumEg: Axa, GMF

Beneficiaries

Subscribers

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

D Freebie marketingEg: hp, Epson, Gillette

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

E Open Business Model Eg: P&G

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

Case studies6

Advanced Business ModelA

Channels

Key Partners

ValueProposition

Costs Benefit

Activity

CustomerSegments

Ressources

CustomerRelationships

Case study: Amazon

Exercise:Map out the BM with at least 3 value propositions

Channels

Key Partners

ValueProposition

Costs Benefit

Activity

CustomerSegments

Ressources

CustomerRelationships

Case study: Facebook

Exercise:Map out the BM with at least 3 value propositions

Channels

Key Partners

ValueProposition

Costs Benefit

Activity

CustomerSegments

Ressources

CustomerRelationships

Case study: Meninvest

Exercise:Map out the BM with at least 3 value propositions

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)

Channels

Key Partners

ValueProposition

Costs Benefit

Activity

CustomerSegments

Ressources

CustomerRelationships

Case study: Angrybirds

Exercise:Map out the BM with at least 3 value propositions

Financial viability & projectionB

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

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.

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.

BonusC

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.