Business Modeling for Startups (Semantic Web Seminar, AIFB at KIT)
Download as PPTX, PDF6 likes1,946 views
This document discusses business modeling for startups. It defines a business model as describing how a company makes money. A startup is defined as searching for a repeatable and scalable business model under conditions of uncertainty. The presentation discusses designing business models and testing them with customers to achieve product-market fit. It emphasizes getting customer feedback and failing fast through iterative testing rather than spending too much time on formal business plans up front. The business model canvas is presented as a tool to design, test, and communicate business models more effectively than traditional business plans for early-stage startups.
![Def.:
[…] a startup is an organization formed
to search for a repeatable and scalable
business model. Teaching Entrepreneurship – By Getting Out of the Building, Steve
Blank, Blog article, www.steveblank.com (Retrieved Oct 26, 2012)](https://image.slidesharecdn.com/20121025businessmodelingforstartupssemanticwebseminaraifbjp-121103072732-phpapp02/85/Business-Modeling-for-Startups-Semantic-Web-Seminar-AIFB-at-KIT-10-320.jpg)
![“[…] building a product is NOT
“the product” of your startup.
Your business model is “the product”.
Running Lean (2nd edition), Ash Maurya, O‟Reilly, 2012](https://image.slidesharecdn.com/20121025businessmodelingforstartupssemanticwebseminaraifbjp-121103072732-phpapp02/85/Business-Modeling-for-Startups-Semantic-Web-Seminar-AIFB-at-KIT-17-320.jpg)
![Avg. Income:
$12.50/hr
A search saves the Savings:
user 6min (avg). $1.25/search
Creating value
at $1.25/search
Google creates
Google in U.S.:
$1.5bln value/day
1.2bln searches/day
in U.S.
Creating value
at $1.25/search
Cost for Google: Cost to customer
0.2 cents/search value ratio: 625!!!
„ [..] a stunning value proposition by any measure.“
IT-Driven Business Models, Kagermann et al., John Wiley & Sons, 2011](https://image.slidesharecdn.com/20121025businessmodelingforstartupssemanticwebseminaraifbjp-121103072732-phpapp02/85/Business-Modeling-for-Startups-Semantic-Web-Seminar-AIFB-at-KIT-32-320.jpg)
![© Sharon Drummond, Flickr.com
“A study recently released by Babson College analyzed 116
businesses started by alumni [and] found no statistical difference in
success between those businesses started with formal written plans
and those without them...”
Enterprise: Do Start-Ups Really Need Formal Business Plans, Wall Street Journal, 1/9/07](https://image.slidesharecdn.com/20121025businessmodelingforstartupssemanticwebseminaraifbjp-121103072732-phpapp02/85/Business-Modeling-for-Startups-Semantic-Web-Seminar-AIFB-at-KIT-50-320.jpg)
Business Modeling for Startups (Semantic Web Seminar, AIFB at KIT)
- 1. Business Modeling for Startups AIFB Seminar: Developing Business Models for the Semantic Web (WS 12/13, KIT) Julius Parrisius, Center für Innovation & Entrepreneurship 30.10.2012
- 2. The story What is a Design and Connection How does Business Model Testing of between Business Model and how does Business Design and and Business it relate to Models. Testing. Plan fit startups? together?
- 3. The story What is a Design and Connection How does Business Model Testing of between Business Model and how does Business Design and and Business it relate to Models. Testing. Plan fit startups? together?
- 4. Def.: A business model describes the rationale of how an organization creates, delivers, and captures value. Business Model Generation, A. Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self published, 2010
- 5. Def.: Or in English: A business model describes how your company makes money. What’s a startup? First Principles, Steve Blank, Blog article, www.steveblank.com (Retrieved Oct 26, 2012)
- 6. An ad-based freemium-model. Advertiser Money Lead to music fans Free music service Music-fan (free) Subscription fee $9.99/month Music-fan Ad-free premium music (premium) service So far 15mio users are signed up, 4mio of them as paying customers (at: 08/2012).
- 7. A one-sided Match-making plattform. Match-making service Visitor Room to rent Money Match-making service Renter Community 6-12 % commission More than 200.000 offers in more than 26.000 cities (192 countries) and over 1mio users (at: 07/2012).
- 8. A marketplace for fund seekers. Large micro-funding Small micro-funding exposure exposure member member Fund seeker Crowd of backers 5 % Gebühr Small reward Large reward 74.000 projects (success rate of 44%) have been funded with roughly $381mio (at: 10/2012).
- 9. Def.: A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty. The lean startup, Eric Ries, Crown Business, 2011
- 10. Def.: […] a startup is an organization formed to search for a repeatable and scalable business model. Teaching Entrepreneurship – By Getting Out of the Building, Steve Blank, Blog article, www.steveblank.com (Retrieved Oct 26, 2012)
- 11. business model © kevin dooley, Flickr.com
- 12. The story What is a Design and Connection How does Business Model Testing of between Business Model and how does Business Design and and Business it relate to Models. Testing. Plan fit startups? together?
- 13. Design Testing
- 14. Design
- 17. “[…] building a product is NOT “the product” of your startup. Your business model is “the product”. Running Lean (2nd edition), Ash Maurya, O‟Reilly, 2012
- 19. What Value are we delivering?
- 20. Which Customer are we serving?
- 21. Value Customer
- 22. Why is this so important? Life is too short to build something nobody wants. Running Lean (2nd edition), Ash Maurya, O‟Reilly, 2012
- 23. Customer focus should be on the early adopters in the beginning. Technology adoption lifecycle (Everett Rogers„ bell curve) Early adopters Early majority Refined with „the Chasm“ (Crossing the Chasm, Geoffrey Moore, Harper, 1991)
- 25. © Alex Osterwalder, Flickr.com
- 26. Goal: Product-Market Fit Which „Jobs“ is my customer trying to get done? (functional, social, emotional, basic …) What are her „Pains“? (emotions, costs, situations, risik …) What „Gains“ is she hoping for? (functional, social, emotional, costs …) All graphics © Alex Osterwalder, Flickr.com
- 27. What products/services is the VP built around? (in-/tangible, digital/virtual, financial …) How are they „pain relievers“? (emotions, costs, situations, risks …) How are they producing „Gains“? (functional, social, emotional, costs …) All graphics © Alex Osterwalder, Flickr.com
- 28. You are not alone. © Luix90, Flickr.com
- 29. Blue Ocean Red Ocean Blue Ocen Strategy, Kim and Mauborgne, Harvard Business School Press, 2005
- 30. The Strategy Canvas © Kim and Mauborgne, 2012, www.blueoceanstrategy.com
- 31. Hows does my VP measure up against competing VPs? Can I fill the „open slot“? © Alex Osterwalder, Flickr.com
- 32. Avg. Income: $12.50/hr A search saves the Savings: user 6min (avg). $1.25/search Creating value at $1.25/search Google creates Google in U.S.: $1.5bln value/day 1.2bln searches/day in U.S. Creating value at $1.25/search Cost for Google: Cost to customer 0.2 cents/search value ratio: 625!!! „ [..] a stunning value proposition by any measure.“ IT-Driven Business Models, Kagermann et al., John Wiley & Sons, 2011
- 33. Design Testing
- 34. Testing
- 35. “Get out of the building!” Steve Blank has preached this for over a decade wherever and whenever he could. © iagoarchangel, Flickr.com
- 36. The old way The Four Steps to the Epiphany, Steve Blank, printed by Lulu.com, 2006, p. 2.
- 37. The new way Lean Startups Aren’t Cheap Startups, Steve Blank, Blog article, http://venturebeat.com/2009/11/03/lean-startups- aren‟t-cheap-startups/ , (Retrieved Oct 26, 2012)
- 38. Customer Development © Steve Blank„s Customer Development by Brant Cooper, www.custdev.com (Retrieved Oct 26, 2012)
- 39. Validated Learning A scientific method to build your business. 3 1 1. 3. In your mind: 1. What do I want to test? 2. How can I measure it? 3. What do I 2. 2 have to build? © Eric Ries, The Lean Startup, 2011
- 40. © Brintam, Flickr.com The goal is to minimize the total time through the loop.
- 41. The story What is a Design and Connection How does Business Model Testing of between Business Model and how does Business Design and and Business it relate to Models. Testing. Plan fit startups? together?
- 42. Where is the connection? Design Testing
- 43. © Alex Osterwalder, Flickr.com
- 44. © Alex Osterwalder, Flickr.com Make sure to build stuff people want.
- 45. © Alex Osterwalder, Flickr.com Build a viable business.
- 46. The story What is a Design and Connection How does Business Model Testing of between Business Model and how does Business Design and and Business it relate to Models. Testing. Plan fit startups? together?
- 47. How do they fit together? Business Plan Model
- 48. Quote: A good plan violently executed now is better than a perfect plan executed next week. US Army General George S. Patton
- 49. A famous Silicon Valley mantra: “Better done than perfect”. Reported by PionierGarage after their Silicon Valley Tour, 2011.
- 50. © Sharon Drummond, Flickr.com “A study recently released by Babson College analyzed 116 businesses started by alumni [and] found no statistical difference in success between those businesses started with formal written plans and those without them...” Enterprise: Do Start-Ups Really Need Formal Business Plans, Wall Street Journal, 1/9/07
- 51. Planning is ok, but we don„t know the future, so it has to be appropriate. high high Business Plan Waste Waste USE OF USE OF RESOURCES RESOURCES Irresponsible Business Model Irresponsible Planning low Planning low low RISK high low RISK high Both graphics: © Julius Parrsius
- 52. Today many resources are free or cheap => we can run experiments. Time is the only resource that will always be limited => we have to fail fast. „Fail fast“ concept applied from: Fail Fast, Jim Shore, IEEE Computer Society, 2004, www.martinfowler.com/ieeeSoftware/failFast.pdf
- 53. Why is the Business Model Canvas great? fast. concise. portable. Running Lean (2nd edition), Ash Maurya, O‟Reilly, 2012
- 54. The business modell canvas is a first step towards a complete business plan. © Thomas Leth-Olsen, Flickr.com
- 55. A business plan is necessary in the right stage. © Karthick R., Flickr.com It should be seen as a conversation with stakeholders (employees, partners, investors …).
- 56. Inhalte eines Business Plans Cover Page and Table of Contents Executive Summary Business Description Business Environment Analysis Industry Background Competitive Analysis Market Analysis Marketing Plan Operations Plan Management Team Financial Plan Attachments and Milestones
- 57. Operations Plan Market Analysis Business Description Marketing Plan Financial Plan
- 58. Perfect your pitch, then write your plan. Use the business-plan exercise as a way to get your team on the same page. Keep it short: ten to twenty pages. Spend no more than two weeks writing it. Don‟t get obsessed with details in your financial forecast because it should be one page long. Is a business plan necessary, Guy Kawasaki (Silicon Valley VC, bestselling author), blog article, blog.guykawasaki.com (Retrieved Oct 27, 2012)
- 59. Thank you! Julius Parrisius Startup Manager, Center für Innovation & Entrepreneurship E-Mail: parrisius@cie-kit.de