How to use business model canvas to map your idea
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How to use business model canvas to map your idea
How to use business model canvas to map your idea
- 1. Business Canvas 101 Anand Kumar Padmanaban Co-Founder, Witmer Health Technologies Mentor IISc , IITM , Faster Capital (UAE) Professor Of Practice
- 2. We Start with an idea because …
- 3. Reasons why startups fail ?
- 4. Most Common Reasons No idea of who will buy your product No idea of where to sell your product No idea of who else is making similar products Poor Pricing Poor Cost management Poor Service & Support Insufficient Demand For Product Wrong People On Team Poor Planning
- 5. What is a business model? • A plan to make money with its product and customer base in a specific market. • It explains: • What product or service a company will sell. • How it intends to market that product or service. • What kind of expenses it will face. • How it expects to turn a profit.
- 6. Business models are constantly changing Depending on the kind of products or services on offer…
- 9. Most common types of business models Subscription Based Business Model: •It can be applied to both- • traditional brick-and-mortar businesses; • Example: Monthly or yearly subscriptions of Body care boxes/ service bundles at spas or stores • Online businesses; • Example: Netflix
- 10. Most common types of business models Bundling Model: • two or more products together as a single unit, often for a lower price than they would charge selling the products separately. • Helps to generate greater volume of sales and perhaps market products or services that are more difficult to sell. However, profit margins often shrink since businesses sell the products for less. • Examples: Fast-food companies that offer value meals or deals like Mc Donalds Value Meals
- 11. Most common types of business models Freemium model • Popular with the prevalence of online and Software-as-a-Service (SaaS) businesses. • A software company hosts and provides a proprietary tool for their users to freely access, such as an app or tool suite • It withholds or limits the use of certain key features that, over time, their users will likely want to use more regularly. To gain access to those key features, users must pay for a subscription. • Example: Spotify, Youtube gives users free and open access while in ads between the Content. At some point, many users opt to pay a recurring monthly fee for the premium service so they can stream music without interruption. Other similar examples are Linkedin, Mail Chimp
- 12. Most common types of business models Razor blades model • Razor and blade model is used by companies that deal in complementary or companion products like razors and blades. • It involves selling the high-margin root product at a low price to increase the volume sales of the complementary or related low-margin product. • By using this model, businesses create a stream of recurring income over the life of the root product. • Examples: Companies dealing in razors, mosquito vaporizers, and other refillable products employ this business model.
- 13. Most common types of business models • Reverse Razor And Blades • A business employing a reverse razor and blades model offers the low margin item at a very less price or below the cost to encourage the sale of the high margin product. • Example: Amazon employs this business model to sell its Kindle e-reader. It provides Kindle ebooks at a price lower than their actual cost so to make people consider Kindle as a one-time investment to enjoy low-cost books throughout its life.
- 14. Most common types of business models Product to service model • Companies that follow this type of business model allow customers to purchase a result rather than the equipment that delivers that result. • Examples: Companies that use the product to service model include Zipcar, Uber, Lyft and LIME.
- 15. Most common types of business models Leasing model • Under a leasing business model, a company buys a product from a seller. That company then allows their customer to use the product they purchased for a periodic fee. • Examples: Uber or Ola giving their owned car to the driver on daily rental to drive and earn through rides made. • Leasing agreements work best with big- ticket items like manufacturing, medical equipment or heavy construction machineries.
- 16. Most common types of business models Crowdsourcing model • Crowdsourcing involves receiving opinions, information, or work from many different people using the internet or social media. • These types of business models allow companies to tap into a vast network of talent without having to hire in-house employees. • Examples: Wikipedia, YouTube, IMDB and Indiegogo are all examples of businesses using the crowdsourcing model. • Some traffic apps, for example, encourage drivers to report accidents in real-time for the benefit of other app users.
- 17. Most common types of business models One-for-one model • Built upon the idea that, when one of your products is purchased, another is given away to someone in need, the model is most famously attributed to Blake Mycoskie of the US-based company TOMS pioneered this form of social entrepreneurship.
- 18. Most common types of business models Franchise model • A franchise is an established business blueprint that is simply purchased and reproduced by the buyer, the franchisee. • The franchiser, or original owner, works with the franchisee to help them with financing, marketing, and other business operations to ensure the business functions as it should. • In return, the franchisee pays the franchiser a percentage of the profits. • Examples: Starbucks, Domino's, Subway, McDonald’s etc.are all common examples of the franchise model.
- 19. Most common types of business models Distribution model • A company operating as a distributor is responsible for taking manufactured goods to the market. To make a profit, distributors buy the product in bulk and sell it to retailers at a higher price • Example: Hershey’s, for example, manufactures and packages its chocolate, but distributors are the agents that transfer and sell the goods from the factory to a retailer..
- 20. Most common types of business models Manufacturer model • The manufacturer model refers to when a manufacturer converts raw materials into a product. • Example: Companies like Dell Computers or Hewlett- Packard, both of which assemble computers with parts manufactured by other companies, would still be considered manufacturers. Additional examples of this type of business model include Intel, Black + Decker and LG Electronics.
- 21. Most common types of business models Retailer model • A retailer is the last link in the supply chain. These businesses purchase goods from distributors and then sell them to customers for a price that will both cover expenses and turn a profit. • Retailers may specialize in a particular niche, such as kitchenware, or carry a range of products. • Examples: This is a popular type of business model — used by big-name companies like Big Bazaar, Ikea etc.
- 22. How to choose the right business model • Ask yourself: • How will my product or service benefit the customer? • How will I generate revenue? • Who’s my target customer? • What startup costs am I looking at? • Which expenses will be fixed and variable costs? • Do I need support from investors? • With the answers to these questions, you'll be able to gain a better understanding of how to structure your business model. • Lookout for other businesses that are similar to yours (especially competitors) and see how they've structured their operations.
- 24. 2 Types LEAN CANVAS - Early stage where you are identifying what the problems are and what the solutions are and if the market will exist for this BUSINESS CANVAS – Once you have identified the problem to be solved is worth solving
- 25. LEAN CANVAS
- 27. Step 1 : Identify Problem To Be Solved What are the problems whichyourpotential customersface ?
- 28. Step 2 : Identify Customer Segment What are the most important customers you want to reach and create value for ? Who would be your first set of customers ?
- 29. Step 3 : Identify Value Proposition What are the products that reflects the needs of your customers and create significant value for them that they will buy ?
- 30. Step 4 : Outline Solutions List Solutions for the problems you have identified
- 31. Step 5 : Identify The Channels What communication, distribution and sales channels do you use to deliver your product ?
- 32. Step 6 : Identify Revenue Streams How to make money from your value proposition ?
- 33. Step 7 : Identify Major Cost Factors What costs are involved to create your value proposition and deliver it to your customers ?
- 34. Step 8 : Identify keymetrics What are the key activities you need to perform to deliver your value proposition to your customers ?
- 35. Step 9 : Identify Competitiv e Advantage What’s is special that you have which cannot be replicated by others (patents / IP, process etc.)
- 37. Once Problem And Solution Has been Identified and you have spoken to the prospective customers and they agree that there is value created, then you can use this business canvas
- 38. Essential components of a business model
- 39. Example : AirBnB An online marketplace for short- and long-term homestays and experiences. The company acts as a broker and charges a commission from each booking. There are 2 customers : A traveller A House Owner
- 40. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure BUSINESS MODEL CANVAS: Airbnb Travelers Date Designed by Team Iteration Travelers Airbnb
- 41. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure Date Designed by Team Iteration Travelers Can’t afford a hotel Airbnb BUSINESS MODEL CANVAS: Airbnb Travelers
- 42. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure Date Designed by Team Iteration Instagram Travelers Can’t afford a hotel Airbnb BUSINESS MODEL CANVAS: Airbnb Travelers
- 43. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure Date Designed by Team Iteration Instagram Travelers Can’t afford a hotel Support website, chat, email Airbnb BUSINESS MODEL CANVAS: Airbnb Travelers
- 44. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure Date Designed by Team Iteration Instagram Travelers Can’t afford a hotel Support website, chat, email Booking fees Airbnb BUSINESS MODEL CANVAS: Airbnb Travelers
- 45. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure Date Designed by Team Iteration Instagram Travelers Can’t afford a hotel Support website, chat, email Payments to hosts Booking fees Airbnb BUSINESS MODEL CANVAS: Airbnb Travelers
- 46. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure Date Designed by Team Iteration Instagram Travelers Can’t afford a hotel Support website, chat, email Payments to hosts Booking fees Supporting travelers Airbnb BUSINESS MODEL CANVAS: Airbnb Travelers
- 47. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure Date Designed by Team Iteration Instagram Travelers Can’t afford a hotel Support website, chat, email Payments to hosts Booking fees Platform for searching places to stay Supporting travelers Airbnb BUSINESS MODEL CANVAS: Airbnb Travelers
- 48. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure Date Designed by Team Iteration Instagram Travelers Can’t afford a hotel Support website, chat, email Payments to hosts Booking fees Platform for searching places to stay Hosts Supporting travelers Airbnb BUSINESS MODEL CANVAS: Airbnb Travelers
- 49. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure BUSINESS MODEL CANVAS: Airbnb Hosts Date Designed by Team Iteration Hosts / property owners Airbnb - Hosts
- 50. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure BUSINESS MODEL CANVAS: Airbnb Hosts Date Designed by Team Iteration Hosts / property owners Maximize rental income Airbnb - Hosts
- 51. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure BUSINESS MODEL CANVAS: Airbnb Hosts Date Designed by Team Iteration Facebook Hosts / property owners Maximize rental income Airbnb - Hosts
- 52. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure BUSINESS MODEL CANVAS: Airbnb Hosts Date Designed by Team Iteration Facebook Hosts / property owners Maximize rental income Support website, chat, email Airbnb - Hosts
- 53. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure BUSINESS MODEL CANVAS: Airbnb Hosts Date Designed by Team Iteration Facebook Hosts / property owners Maximize rental income Support website, chat, email Host service fees Airbnb - Hosts
- 54. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure BUSINESS MODEL CANVAS: Airbnb Hosts Date Designed by Team Iteration Facebook Hosts / property owners Maximize rental income Support website, chat, email Taxes to local governments Host service fees Airbnb - Hosts
- 55. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure BUSINESS MODEL CANVAS: Airbnb Hosts Date Designed by Team Iteration Facebook Hosts / property owners Maximize rental income Support website, chat, email Taxes to local governments Host service fees Take professional pictures of properties Airbnb - Hosts
- 56. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure BUSINESS MODEL CANVAS: Airbnb Hosts Date Designed by Team Iteration Facebook Hosts / property owners Maximize rental income Support website, chat, email Taxes to local governments Host service fees Platform to advertise properties Take professional pictures of properties Airbnb - Hosts
- 57. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure BUSINESS MODEL CANVAS: Airbnb Hosts Date Designed by Team Iteration Facebook Hosts / property owners Maximize rental income Support website, chat, email Taxes to local governments Host service fees Platform to advertise properties Photographers Take professional pictures of properties Airbnb - Hosts
- 58. Build A Business Canvas
- 59. Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure BUSINESS MODEL CANVAS Date Designed by Team Iteration ? ? ? ? ? ? ? ? ? ?
- 60. EXE C TeachingE.org Revenue Streams Chann els Customer Relationship Key Activities Key Partners Value Proposition Customer Segments Key Resources Cost Structure BUSINESS MODEL CANVAS: Ceres Designed by: strategyzer.com Date Designed by Team Iteration Feasibility Can we build it? Viability Can we generate value? Desirability Do customers want it?
- 61. Thanks Any questions / clarifications : azkuma@gmail.com