5. Judging Criteria
• Business Model
– How will you make money?
– How will you sell to customers?
– Differentiation? Competition?
• Execution
– Did you build something?
– Was it well designed?
• Customer Validation
– Did you talk to real customers?
– Did you Incorporate their feedback?
6. I will be a
millionaire
I will change
The world
I have an idea
7. Business Plan: A document investors
make you write that they don’t read.
Business Model: A single diagram
that describes your business.
- Steve Blank
8. Developing the Business Model
How a company creates value for
itself while delivering products and
services to customers
21. Describing what activities are required
VALUE
PROPOSITION
VALUE
CONFIGURATION
CORE
CAPABILITIES
value proposition 1
value proposition 2
…
core capability 1
core capability 2
…
activity 1
activity 2
…
INFRASTRUCTURE OFFER
22. Describing the partners that leverage the business model
VALUE
PROPOSITION
PARTNER
NETWORK
CORE
CAPABILITIES
value proposition 1
value proposition 2
…
core capability 1
core capability 2
…
partner 1
partner 2
…
INFRASTRUCTURE OFFER
23. VALUE
PROPOSITION
COST
STRUCTURE
cost account 1
cost account 2
…
value proposition 1
value proposition 2
…
FINANCEINFRASTRUCTURE OFFER
Describing the costs of a business model
CORE
CAPABILITIES
core capability 1
core capability 2
…
25. VALUE
PROPOSITION
COST
STRUCTURE
CUSTOMER
RELATIONSHIP
TARGET
CUSTOMER
DISTRIBUTION
CHANNEL
VALUE
CONFIGURATION
CORE
CAPABILITIES
PARTNER
NETWORK
REVENUE
STREAMS
gives an overall view of a
company's bundle of
products and services
portrays the network of
cooperative agreements
with other companies
describes the channels to
communicate and get in
touch with customers
describes the
arrangement of activities
and resources
explains the relationships
a company establishes
with its customers
sums up the monetary
consequences to run a
business model
describes the revenue
streams through which
money is earned
describes the customers
a company wants to offer
value to
outlines the capabilities
required to run a
company's business
model
INFRASTRUCTURE CUSTOMER
OFFER
FINANCE
Overall business Model
26. VALUE
PROPOSITIONS
CHANNELS
CUSTOMER
RELATIONSHIPS
CUSTOMER
SEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEY
PARTNERS
KEY
RESOURCES
KEY
ACTIVITIES
Activity: Create your own business model
<< insert your value
proposition here>>
<< Describe your cost structure here>>
<< list your partners
here>>
<< describe your revenue streams here>>
<< list the key resources
available to you here>>
<< describe your key
activities here>>
<describe how you plan to
establish and manage the
relationship between the
customer and your brand
here>>
<< describe 1) how you
plan to acquire
customers, 2) how you
plan to deliver your value
proposition to them and
3) how you plan to
communicate with your
customers >>
<< describe your
target customer
segment here>>
27. Types of Business Models
• Auction
• Bricks & Clicks
• Collective
• Cutting out the
middleman
• Direct Sales
• Franchise
• Freemium
• Low Cost Carrier
• Loyalty Business
• Monopolistic
• Online Auction
• Pyramid Scheme
• Bait and Hook
• Subscription
• Value Added Reseller
• Government Support
• Open Source
• Network Business
• Advertising Supported
28. Activity 1: Key business model questions
Write a brief response to the following questions.
1. How do you acquire customers?
2. After you have landed a new customer, how do you plan to relate to that customer and
manage the relationship (if at all)?
3. How do you charge your customers? What is your revenue model?
4. How much do you charge your customers? Can you calculate your revenues for the next
month, quarter and year?
5. What assets are available to you or under your control?
29. Activity 1: Key business model questions (cont’d)
6. Who are your key partners?
7. What key activities do you need to engage in to deliver your value proposition?
8. What are your fixed costs?
9. What are your variable costs? Can you calculate your total cost for the next month, quarter
and year?
10. Does your revenue forecast demonstrate increased profitability towards the end of the
forecast period?