Business Model Innovation, Value Proposition and CANVAS Business Modelling

Transcription

1 Business Model Innovation, Value Proposition and CANVAS Business Modelling Prof. dr. Roberto Biloslavo Enova Koper, 21 st of June, 2017

2 Schedule Day Time Lecture Topic June 21 st Business Model & Innovation Break Business Model Canvas & The Lean Startup approach Work in teams

3 Objectives: Learn to differentiate between search and execution process Learn to differentiate between business strategy and business model Learn how to design a BM canvas Learn how to define and execute pass/fail experiments to validate or invalidate assumptions about selected BM Learn to find and reach out to potential customers

4 Literature: Alexander Osterwalder, Yves Pigneur (2010): Business Model Generation Eric Reis (2011): The Lean Startup Steve Blank, Bob Dorf (2012): The Startup Owner's Manual: The Step- By-Step Guide for Building a Great Company Alex Osterwalder et al. (2014): Value Proposition Design Steve Blank (2013): Why the Lean Start-Up Changes Everything (HBR)

5 Business Model, Strategy & Innovation

6 What Business Model is A business model is the way in which a company generates revenue and makes a profit from company operations

7 Business Model & Strategy Governance Mission Vision Growth strategy SOCIETY Productivity strategy RESOURCES PROCESSES ORGANIZATIONAL MODEL PRODUCTS 7

8 The problem and the traditional solution COMPETITIVE STRATEGY: The competitive environment In a is characterized by: Uncertainty; precise market space Discontinuity; Crisis. reduce COSTS or increase PROFIT

9 Innovative solution as a resolution of the paradox INNOVATIVE STRATEGY: The competitive environment is characterized by: Uncertainty; Discontinuity; Crisis. reduce COSTS In a new market space with a new Value proposition and increase PROFITS

10 The reconfiguration of the Business Model giving a different answer to the following questions: who what how with are our customers and markets? do we offer them? can we do it effectively and efficiently? what means do we compete? which are our suppliers and partner? why do we exist and which is our ambition? supplying channels RESOURCES strategic alliances SOCIETY new market space new Value proposition reduce increase outsourcing relationships COSTS PROFITS organization value network PROCESSES strategic alliances with customers design commercial channels PRODUCTS

11 Technology Push Innovations Technology Push Innovation: They derive from technologic research and are usually radical supplying channels strategic alliances RESOURCE S outsourcing organization MISSION AND VISION new market space value network new value proposition PROCESSES CLIENTI strategic alliances relationships with customers design commercial channels PRODUCTS 11

12 Market Pull Innovations supplying channels strategic alliances RESOURCE S outsourcing organization MISSION AND VISION new market space value network new value proposition PROCESSES strategic alliances relationships with customers design commercial channels PRODUCTS Market Pull Innovation: They derive from customers needs and desires and are usually incremental 12

13 Design Driven Innovation supplying channels RESOURCE S strategic alliances outsourcing organization MISSION AND VISION New market space value network new value proposition PROCESSES strategic alliances relationships with customers design commercial channels PRODUCTS Design Driven Innovation: Meaning innovations that lead to redefine the products meaning and are either incremental or radical 13

14 Strategic Innovation MISSION AND VISION Strategic Innovation: Business model innovations that lead to change the rules of the game and are always radical supplying channels RESOURCE S strategic alliances outsourcing organization new market space value network new value proposition PROCESSES strategic alliances relationships with customers design commercial channels PRODUCTS 14

15 Red vs. Blue Ocean Strategy Source:

16 Strategic Innovation ELIMINATE What factors given for granted, can be eliminated? CREATE What factors have never been offered in the sector and could be created? COST STRATEGIC INNOVATION VALUE DECREASE What factors can be reduced below the sector standard? INCREASE What factors can be increased above the sector standard?

17 Osterwalder s Business Model Canvas

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21 Key Questions for Value Proposition Problem Statement: What is the problem? Ecosystem: For whom is this relevant? Competition: What do customers do today? Technology / Market Insight: Why is the problem so hard to solve? Market Size: How big is this problem? Product: How do you do it?

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31 Lean Startup

32 What s a Startup? A temporary organization designed to search for a repeatable and scalable business model Each word has meaning Temporary Search Repeatable Scalable Business Model

33 Startups versus existing companies That startups begin with a series of unknowns (mostly) They Search That existing companies deal with execution of knowns (mostly) They Execute The insight is that management tools built to execute do not work in search Early stage ventures need their own tools Startups are Not Smaller Versions of a Large Company!

34 What We Used to Believe About Strategy

35 Planning before Plan Start With an Operating Plan and Financial Model BUT Planning comes before the plan

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37 Business Model vs. Business Plan We are not saying NO to a business plan We are saying, not first Plans are static - Models are dynamic Planning comes before the plan

38 What We Used to Believe About Process

39 Classical Product Introduction Model Concept/ Seed Round Product Dev. Alpha/Beta Test Launch/ 1 st Ship

40 Waterfall - Execution on Two Knowns Requirements Design Product Features: known Implementation Verification Customer Problem: known Maintenance BUT More startups fail from a lack of customers than from a failure of product development Source: Eric Ries

41 Agile Development

42 Customer development Customer Development Engineering Customer Discovery Customer Validation Customer Creation Scale Company Data, feedback, insights Problem: unknown Solution: unknown Hypotheses, experiments, insights

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44 What We Used to Believe About Organization

45 Hire and Build a Functional Organization

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47 Founders run a Customer Development Team No sales, marketing and business development

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49 Key Principles of Lean Startup Methodology Eliminate uncertainty and Get out of the building Startups are initially filled with hypotheses of the real world. These are just guesses that must be validated by customers interacting. Work smarter not harder Every startup is an experiment that attempts to answer the following question; "Should this product be built?" and "Can we build a sustainable business around this set of products and services?" Thereby working smarter and with less market risk. Develop an MVP The first step is to figure out the problem that needs to be solved and then develop a minimum viable product (MVP) to begin the process of learning as quickly as possible. Validated learning startups want to learn how to build a successful business model why entrepreneurs should validate all facts with empirical data generated from customers.

50 From Guesses To Facts

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55 Overview of the Customer Discovery Process

56 Overview of the Customer Validation Process

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58 The Minimum Viable Product (MVP) Smallest feature set that gets you the most - learning, feedback, failure, orders, - incremental and iterative It is not a prototype It is not a deployable version with the fewest features It is what enables a test of a hypothesis It may be a drawing, a slide, a wireframe, clickable workflow, etc

59 Define Minimum Viable Product Physical First, test your understanding of the problem (pain) Next test your understanding of the solution (gain) Proves that it solves a core problem for customers The minimum set of features needed to learn from earlyvangelists - Interviews, demos, prototypes, etc - Lots of eyeball contact

60 Define the Minimum Viable Product Web/Mobile NOW build a low fidelity app for customer feedback tests your understanding of the problem LATER build a high fidelity app tests your understanding of the solution Proves that it solves a core problem for customers The minimum set of features needed to learn from earlyvangelists - Avoid building products nobody wants - Maximize the learning per time spent

61 Four Types of Markets Clone Market Existing Market Resegmented Market New Market Clone Market Copy of a U.S. business model Existing Market Faster/Better = High end Resegmented Market Niche = marketing/branding driven Cheaper = low end New Market Cheaper/good enough, creates a new class of product/customer Innovative/never existed before

62 Market Type Existing Resegmented New Customers Known Possibly Known Unknown Customer Needs Performance Better fit Transformational improvement Competitors Many Many if wrong, few if right None Risk Lack of branding, sales and distribution ecosystem Market and product redefinition Evangelism and education cycle Examples Google Southwest Groupon Market Type determines: Rate of customer adoption Sales and Marketing strategies Cash requirements

63 Market Type - Existing Incumbents exist, customers can name the mkt Customers want/need better performance Usually technology driven Positioning driven by product and how much value customers place on its features Risks: Incumbents will defend their turf Network effects of incumbent Continuing innovation

64 Existing Market Revenue Forecast Existing Market

65 Market Type Resegmenting Existing Low cost provider (Southwest) Unique niche via positioning (Whole Foods) What factors can: you eliminate that your industry has long competed on? Be reduced well below the industry s standard? should be raised well above the industry s standard? be created that the industry has never offered? (blue ocean)

66 Resegmented Market Revenue Forecast

67 Market Type New Customers don t exist today How will they find out about you? How will they become aware of their need? How do you know the market size is compelling? Which factors should be created that the industry has never offered? (blue ocean)

68 New Market Revenue Forecast New Market Sales Curve

69 Strategy Canvas Source:

70 How Big is the Pie? Total Available Market How many people would want/need the product? Total Available Market How large is the market be (in $ s) if they all bought? How many units would that be? How Do I Find Out? Industry Analysts Gartner, Forrester Wall Street Analysts Goldman, Morgan

71 How Big is My Slice? Served Available Market How many people need/can use product? How many people have the money to buy the product Total Available Market Served Available Market How large would the market be (in $ s) if they all bought? How many units would that be? How Do I Find Out? Talk to potential customers

72 How Much Can I Eat? Target Market Who am I going to sell to in year 1, 2 & 3? How many customers is that? Total Available Market Served Available Market Target Market How large is the market be (in $ s) if they all bought? How many units would that be? How Do I Find Out? Talk to potential customers Identify and talk to channel partners Identify and talk to competitors

73 Get Out of the Building

74 Why Get Out of the Building?

75 Interview Strangers not Friends

76 Disarm Polite Behaviours

77 Ask about Pains & Needs not Features

78 Are You Talking to Relevant Customers?

79 Confirm What You Heard

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81 How to Gain Customers Insight? Sample questions: Can you tell me the story about that? And then what happened? Why [or how] did you do that? What did you love [or hate] about that? If you could wave a magic wand, what would it be like? Tell me about an experience when... What are the best/worst parts about... Can you help me understand more about...

82 project cycle management (pcm) burcu kiper

83 what is a project?

84 as a series of activities aimed at bringing about clearly specified objectives within a defined timeperiod and with a defined budget.

85 idea project implementation

86 features of a project?

87 clear objectives clear target(s) includes an analysis process to solve problems

88 intervention to a problem innovation / a new perspective brings about change develops output(s)

89 how does project management help us?

90 goal clarity and measurement coordination of resources time & cost saving meeting deadlines

91 project cycle management (pcm)

92 a methodology for -preparation -implementation -evaluation of projects based on logical framework approach (LFA)

93 describes -management activities -decision-making procedures during the life cycle of a project (key tasks, roles and responsibilities, key documents and decision options)

94 logical framework approach

95 *a tool for project management *was developed in 60s by US International Development Agency *has 2 main phases Analysis & Planning

96 analysis stage Stakeholder analysis: who are the target groups, beneficiaries? whose problems will be addressed? Problem analysis: what are the key problems constraints and opportunities?

97 analysis stage Analysis of objectives: what will be the objectives? Analysis of strategies: what will be the strategy of the project?

98 stakeholder analysis *to identify possible partners & target groups *to identify those who could be negatively effected by the project for creating a risk management strategy *tools for stakeholder analysis: SWOT analysis, stakeholder analysis matrix, Venn diagrams and Spider diagrams etc.

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100 problem analysis a cause and effect relationships between these problems main tool: "problem tree"

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103 analysis of objectives *what do we want to achieve with this project? (objectives) *how can we achieve these objectives? (means) *turn problems in the problem tree into positive statements

104 analysis of objectives *what do we want to achieve with this project? (objectives) *how can we achieve these objectives? (means) *turn problems in the problem tree into positive statements

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106 analysis of strategies how? based on the capacity, nature and the expertise of the organization why? to demonstrate reasonable and achievable objectives

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108 European Funding Opportunities

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