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Fakultät Informatik - Institut Software- und Multimediatechnik - Softwaretechnologie – Prof. Aßmann - Softwaretechnologie II

40. Earning Money with Software

Prof. Dr. U. AßmannTechnische Universität DresdenInstitut für Software- und MultimediatechnikGruppe Softwaretechnologiehttp://st.inf.tu-dresden.de/teaching/swt2Version 15-0.1, 27.01.16

1.  Founding a Software Start-Up

2.  The role of the markets3.  Business models4.  Sales meetings

Op#onal

Softwaretechnologie II

Recommended Reading

►  [Osterwalder/Pigneur] Alexander Osterwalder. Ives Pigneur. Business Model Generation. Wiley. !Fantastic! ►  There is a preview available from the website

http://www.businessmodelgeneration.com/book, do NOT miss it ►  http://www.businessmodelgeneration.com/downloads/

businessmodelgeneration_preview.pdf

►  [Maurya] Ash Maurya. Running Lean. Iterate from Plan A to a Plan That Works. O’Reilly.

►  [Carlson-Wilmot] Curtis R. Carlson, William W. Wilmot. Innovation. The Five Disciplines for Creating what Customers Want. SRI International. Crown Business, US, 2006

►  [Cusumano] Michael A. Cusumano. Staying Power: Six Enduring Principles for Managing Strategy and Innovation in an Uncertain World. Clarendon Lectures in Management Studies. Oxford University Press, 2010.

►  [Popp] Karl Michael Popp and Ralf Meyer. Profit from Software Ecosystems: Business Models, Ecosystems and Partnerships in the Software Industry. Books on Demand, 2011.

►  Karl Popp. Software industry business models. IEEE Software, 28(4):26-30, 2011.

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Earning money with software


►  C. Barrow, G. Burke, D. Molian, R. Brown. Enterprise Development: The Challenge of Starting, Growing and Selling Businesses. Thomson Computing 2005

►  R. Leicher. Verkaufen. TaschenGuide. Haufe-Verlag. ►  Hermann Scherer. 40 Minuten für eine gezielte Fragetechnik. Gabal Verlag ►  Accenture Campus Challenge

►  E.g.,: 2005. Digital Pen and Paper Applications. ■  Interesting project challenge, running every year in cooperation with TUD.

►  http://www.wirtschaftslexikon24.net Enzyklopädie der wichtigsten Begriffe der Wirtschaftslehre

►  http://unternehmenskick.de contains practical tips ►  http://www.formblitz.de/ has business plan templates ►  Forecasts:

■  IT-Studie der BITKOM, Jan 2007, www.bitkom.de ■  James Canton. The Extreme Future. The top trends that will reshape the world in the next

20 years. Plume/Penguin 2007

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Successful Engineers and Entrepreneurs

►  Konrad Zuse. Mein Lebenswerk. Springer. A MUST for every student. ►  Michael Lewis. The New New Thing. A book about how Jim Clark, Netscape

founder, founded Healtheon. Coronet Books, Hodder & Stoughton ►  R. Würth. Skript on Entrepreneurship. Interfakultatives Institut für

Entrepreneurship. TU Karlsruhe. http://www.iep.uni-karlsruhe.de/260.php ►  Klaus Kemper. Heinz Nixdorf. Verlag Moderne Industrie.

■  The Nixdorf foundation donated given 2 chairs to the department (multimedia, computational engineering)

►  The Google story. ►  Steve Jobs. about Apple. (There are several books available) ►  Bill Gates. The Way Ahead. (dtsch. Der Weg nach vorn. Die Zukunft der

Informationsgesellschaft) Autobiography. Hoffmann&Campe. ►  D. Brandes. Konsequent einfach. Die Aldi Erfolgsstory. Heyne-Verlag. ►  David Thielen. Die 12 simplen Erfolgsgeheimnisse von Microsoft. Econ-

Verlag ►  W. Wiedeking. Anders ist besser. Ein Versuch über neue Wege in

Wirtschaft und Politik. Piper-Verlag, München 2006. ►  D. Tapscott. Wikonomics. 2007

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Start-Up Foundation

►  http://www.gruenderszene.de/ Das Gründerportal ►  Free business plan: http://www.mbpw.de/fileadmin/Redaktion/

Standard_Dateien/e_Handbuch_MBPW.pdf ►  Freies Softwarepaket zum Gründen: http://www.softwarepaket.de/ ►  Muster-Geschäftsplan der SIB

►  http://www.sib-dresden.de/download/businessplan.pdf ►  www.dresden-exists.de die offizielle Gründeragentur der TU ►  BMBF exist Stipendium http://www.exist.de/ Ø  Technologiegründerfonds Sachsen TGFS www.tgfs.de

•  60 Mio capital; 45 Mio were left in 2010; they have to be spent until 2015 •  Watch the chance!

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40.1 MARKET CHANGE

TU Dresden, Prof. U. Aßmann Earning money with software


Different Markets

►  Mass market vs high-price products (specialist tools) ►  Product vs service business

■  A product would be good, but a service doesnt need so much capital ■  Start with a service, try to distill a product ■  Start with an application, try to distill a framework

►  Jumping on the next running train (old markets vs new markets) ■  Dont try to enter an old market – it will be very hard

►  Booming markets ■  Which market will boom? which ones are satisfied? ■  Which market will die? (retreat) ■  Which market is satisfied (change the way how to earn money)

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Time In Markets

►  The early bird finds the corn (first-mover is first in a market) ■  Once with a share, there is a good share to keep it

►  The second bird also finds a corn ■  Being second, you must be more enduring, but you can learn from other's mistakes ■  Microsoft:

♦  Windows ♦  Internet Explorer

►  The “constant improver” will find all corns ■  Kaizen, a Japanese strategy, intends to improve quality continously ■  [Wiedeking]

►  Winning a new customer is 10 times harder than keeping a customer

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Base and Dependent Markets

►  Base markets vs dependent markets ■  Consultancy ■  Service ■  Product (Application) ■  Framework (Product line) Framework markets (component platforms) are more basic

than application markets ■  Platform. Platforms provide run-time environments for all other levels (Ex. operating

system, database system, web system, ...) ►  It takes longer to gain a base market,

■  but the other application markets depend on it ►  Piggipacking:

■  Work in a market that depends on a base market, e.g., in a framework or platform market

►  Domain-specific markets need domain experts and domain knowledge ■  SAP has always worked in the business software market, a domain-specific market ■  Combined with a component platform

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Example Boom Markets

►  RFIDs ■  RFID can store a product memory ■  Identification: RFIDs will replace price tags (Streifencode) ■  RFIDs enable global traceability of goods and all their parts (excellence in logistics)

►  Expert portals ■  Searching knowledge is an expensive business ■  Google is a start ■  Domains: medicine, personal relationships, house construction, financial services, ...

►  Personal communication applications ■  SMS ■  Tunes for mobile phones

►  Specialized search engines ►  Digital Pens

■  Automation of workflows on paper and computer in parallel

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Value Creation (Added Value) by Software

►  In a value chain (Wertschöfpungskette), the value is most often created by software; all other layers are commodity

►  Example: mobile phones

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Internet SMS Videos

Phone

Operating System

Hardware

Phoning

Added Value

Softwaresysteme sind die Innovationstreiber in fast allen Wirtschaftszweigen. Sie bestimmen maßgeblich die Wertschöpfung von Produkten, Fertigungs- und Geschäftsprozessen. [IKT 2020, Abschnitt 4.2.2]

Apps


Chance: Use the Impulse of Innovation Waves

►  Innovation-Waves are initiated by new disruptive technologies ►  They lead to exponential growth of markets and exponential diminishing of markets

(exponential market change) ►  Example: Apple vs Nokia (Smartphone, Tablet) ►  Ex.: IBM vs Microsoft (PC)

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Web 1.0

1993

Web 1.0

2004

Web 2.0

Web 1.0

2008

Web 2.0

Semantic Web

Web 1.0

Web 2.0

Semantic Web

Internet of Things

Who’s going to be the global player for –  Services in Web 2.0? [Google] –  Services in the internet of things (cyber-physical systems)?

2015


Chance Innovationsstrukturen: Wurzel, Stamm, Ast, Zweig?

►  Grundlegende und abhängige Anwendungsfelder ■  In den abhängigen Feldern wird der “AddedValue” geschaffen ■  Aber sie existieren nur in Abhängigkeit vom Grundanwendungsfeldern

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Zweiganwendungsfeld mit Zweiginnovationen

Astanwendungsfeld mit Astinnovationen

Stamminnovation “disruptive technology”

Wurzelinnovation


Chance: Eingebettete automatisierende Systeme

•  Intelligentes Gebäude

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Zweiginnovationen: l  Intelligenter Umgang mit Energie (mehr als Passivhaus) l  Life Sciences / assistierendes Gebäude (Wohnen im Alter, Health Care)

Astinnovation: Automatischer Entwurf für neue, branchenübergreifende Anwendungsfunktionen (2007)

Stamminnovation: Integrierte Datenmodelle für ganze, voll vernetzte Gebäude (2000)

Wurzelinnovation: reaktive Datennetze (1990)


Nutzen von Veränderung der Wertschöpfungsfelder

►  Wo entstehen neue Stämme? ■  Mittel- u. langfristige Veränderung

►  Wo entstehen neue Äste?

►  Wo entstehen neue Zweige?

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Neue Zweiganwendungsfelder

Neue Astanwendungsfelder

Neue Stamminnovation

Wurzelinnovation

Grundlagenforschung

Angewandte Forschung

Industrie


Plastic Logic E-Paper

Ø  Produced since 2007 in Dresden Ø  No German product so far

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Web site www.plasticlogic.com


Chance: Neue Wertschöpfungsfelder mit e-Papier

Ø  Stamminnovation e-Papier von Ø  www.plasticlogic.com (Cambridge, Dresden) ►  Wo entstehen neue Software-Äste?

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Neue Zweiganwendungsfelder: Newsreader auf e-paper

Neue Astanwendungsfelder: e-paper laptop

Neue Stamminnovation: e-paper

Wurzelinnovation: e-ink


How to Find a Growth Market

Ø  BMWI publishes a yearly report on the IT-industry with growth fields: Ø  Monitoring-Report Digitale Wirtschaft 2011 .. 2014 Ø  www.it-gipfel.de Ø  Just google it

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BITKOM

Ø BITKOM publishes yearly new studies about groth fields Ø Example: BITKOM/Berger Bericht Zukunft Digitale Wirtschaft, Jan. 2007, www.bitkom.de Ø Strategische Wachstumsfelder: • Eingebettete Systeme (9% Wachstum/J) • Biometrie • Digitales Rechtemanagement • IT Utility Services (SaaS) • Service-orientierte Architekturen (SOA) • IPTV/Mobiles Fernsehen • Weitere Themen: Breitbandtechnologien, RFID und Telematik.

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Themenfelder: Synergie mit den Stärken der Region Sachsen

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Eingebettete Software

Automatisierungs- Software

Multimedia- Systeme, Websysteme

Geschäfts- Software

mobile Anwendungen e-paper-Anwendungen

enterprise SOA

automatisierende eingebettete Systeme

Web 2.0

Services in the Internet of things

Utility Computing (SaaS)

•  Bündelung mit Produktionsstätten und Zulieferern der Prozessautomatisierung

•  SAP Research „Future Factory“

•  Bündelung mit Hardware-Forschung für neue Anwendungsfelder

•  Bündelung mit Silicon Saxony

–  „Gleichzeitig sind die Themenschwerpunkte stärker an den identifizierten Innovations- und Wachstumsfeldern auszurichten.“ [Berger]

•  Bündelung mit lokaler Industrie •  Bündelung mit größtem Studiengang

•  Bündelung mit lokaler Industrie

IPTV


40.2 BUSINESS DEVELOPMENT

Geschäftsfeldentwicklung

Innovationsmanagement



40.2.1 Value Proposition

Ø  Value proposition analysis finds a real problem of the customer.

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Pain killers are too dangerous, you only get them on prescription – but we have a large set of vitamins. [Swedish pharamacist, when Aßmann asked for Korodin Kreislauftropfen]

Make sure your innovation is a pain killer and not just a vitamin. David Ladd, venture partner at Mayfield Fund [Carlson/Wilmot]

[Ein Unternehmer] hat einen Spürsinn für das, was die Leute brauchen oder zu brauchen glauben. Urs Wälterlin. Weit weg im Outback.]


NABC Analysis [Carlson-Wilmot]TU

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http://www.oulu.fi/english/sites/default/files/content/NABC_presentation.pdf

• How efficient is the solution?

• How large is the benefit?

• How large are the costs?

• Who is in the market already?

• How does your company solve the needs of the customer?

• How does it create value for her?

• What does the customer really need?

• What is of value for her? • What is a pain for the customer?

Need Approach

Benefit per Costs

Comp- etition


Exercise: Application

Ø  For preparing your next application for a job, Ø  Analyze the future employer with NABC

•  What are his needs? •  What is your approach? •  What is his benefits? •  Who are your competitors?

Ø  Learn the answers for these questions by heart, to be able to present them in the interview!

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nAbc Nabc


Value Proposition Cycle (Hughes-Chafin)

Does the customer care? • Pain • Gain

Do we care? • Approach

Can we beat the competition? • Market analysis • Benefti for cost

Can we do it? • Cost and

project planning

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Hughes, G. D./ Chafin, D. C. (1996): „Turning New Product Development into a Continuous Learning Process”, in: Journal of Product Innovation Management, Jg. 13, S. 89-104. Birgit Verworn, Cornelius Herstatt. Modelle des Innovationsprozesses. September 2000. Arbeitspapier Nr. 6. TU Hamburg-Harburg. http://www.tuhh.de/tim/downloads/arbeitspapiere/Arbeitspapier_6.pdf


“Pain-Gain” Value Proposition Canvas [Osterwalder]

Ø  Gain Creators Ø  Pain Relievers Ø  Products and services

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Ø  Value Proposition Ø  Customer Segment

Ø  Gains Ø  Pains Ø  Customer Jobs

Background: http://businessmodelalchemist.com/2012/09/test-your-value-proposition-supercharge-lean-startup-and-custdev-principles.html

Download for personal use http://www.businessmodelgeneration.com/downloads/value_proposition_canvas.pdf


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The Value Proposition Canvas

Gain CreatorsDescribe how your products and services create customer gains. How do they create benefits your customer expects, desires or would be surprised by, including functional utility, social gains, positive emotions, and cost savings?

Pain Relievers

Do they…

Create savings that make your customer happy? (e.g. in terms of time, money and effort, …)

Produce outcomes your customer expects or that go beyond their expectations? (e.g. better quality level, more of something, less of something, …)

Copy or outperform current solutions that delight your customer? (e.g. regarding specific features, performance, quality, …)

Make your customer’s job or life easier? (e.g. flatter learning curve, usability, accessibility, more services, lower cost of ownership, …)

Create positive social consequences that your customer desires? (e.g. makes them look good, produces an increase in power, status, …)

Do something customers are looking for? (e.g. good design, guarantees, specific or more features, …)

Fulfill something customers are dreaming about? (e.g. help big achievements, produce big reliefs, …)

Produce positive outcomes matching your customers success and failure criteria? (e.g. better performance, lower cost, …)

Help make adoption easier? (e.g. lower cost, less investments, lower risk, better quality, performance, design, …)

Rank each gain your products and services create according to its relevance to your customer. Is it substantial or insignificant? For each gain indicate how often it occurs.

Describe how your products and services alleviate customer pains. How do they eliminate or reduce negative emotions, undesired costs and situations, and risks your customer experiences or could experience before, during, and after getting the job done?

Do they…

Produce savings? (e.g. in terms of time, money, or efforts, …)

Make your customers feel better? (e.g. kills frustrations, annoyances, things that give them a headache, …)

Fix underperforming solutions? (e.g. new features, better performance, better quality, …)

Put an end to difficulties and challenges your customers encounter? (e.g. make things easier, helping them get done, eliminate resistance, …)

Wipe out negative social consequences your customers encounter or fear? (e.g. loss of face, power, trust, or status, …)

Eliminate risks your customers fear? (e.g. financial, social, technical risks, or what could go awfully wrong, …)

Help your customers better sleep at night? (e.g. by helping with big issues, diminishing concerns, or eliminating worries, …)

Limit or eradicate common mistakes customers make? (e.g. usage mistakes, …)

Get rid of barriers that are keeping your customer from adopting solutions? (e.g. lower or no upfront investment costs, flatter learning curve, less resistance to change, …)

Rank each pain your products and services kill according to their intensity for your customer. Is it very intense or very light?

For each pain indicate how often it occurs. Risks your customer experiences or could experience before, during, and after getting the job done?

Products & ServicesList all the products and services your value proposition is built around.

Which products and services do you offer that help your customer get either a functional, social, or emotional job done, or help him/her satisfy basic needs?

Which ancillary products and services help your customer perform the roles of:

Buyer (e.g. products and services that help customers compare offers, decide, buy, take delivery of a product or service, …)

Co-creator (e.g. products and services that help customers co-design solutions, otherwise contribute value to the solution, …)

Transferrer (e.g. products and services that help customers dispose of a product, transfer it to others, or resell, …)

Products and services may either by tangible (e.g. manufactured goods, face-to-face customer service), digital/virtual (e.g. downloads, online recommendations), intangible (e.g. copyrights, quality assurance), or financial (e.g. investment funds, financing services).

Rank all products and services according to their importance to your customer. Are they crucial or trivial to your customer?

GainsDescribe the benefits your customer expects, desires or would be surprised by. This includes functional utility, social gains, positive emotions, and cost savings.

Pains

Customer Job(s)

Describe negative emotions, undesired costs and situations, and risks that your customer experiences or could experience before, during, and after getting the job done.

What does your customer find too costly? (e.g. takes a lot of time, costs too much money, requires substantial efforts, …)

What makes your customer feel bad? (e.g. frustrations, annoyances, things that give them a headache, …)

How are current solutions underperforming for your customer? (e.g. lack of features, performance, malfunctioning, …)

What are the main difficulties and challenges your customer encounters? (e.g. understanding how things work, difficulties getting things done, resistance, …)

What negative social consequences does your customer encounter or fear? (e.g. loss of face, power, trust, or status, …)

What risks does your customer fear? (e.g. financial, social, technical risks, or what could go awfully wrong, …)

What’s keeping your customer awake at night? (e.g. big issues, concerns, worries, …)

What common mistakes does your customer make? (e.g. usage mistakes, …)

What barriers are keeping your customer from adopting solutions? (e.g. upfront investment costs, learning curve, resistance to change, …)

Describe what a specific customer segment is trying to get done. It could be the tasks they are trying to perform and complete, the problems they are trying to solve, or the needs they are trying to satisfy.

What functional jobs are you helping your customer get done?(e.g. perform or complete a specific task, solve a specific problem, …)

What social jobs are you helping your customer get done? (e.g. trying to look good, gain power or status, …)

What emotional jobs are you helping your customer get done? (e.g. esthetics, feel good, security, …)

What basic needs are you helping your customer satisfy? (e.g. communication, sex, …)

Besides trying to get a core job done, your customer performs ancillary jobs in differ-ent roles. Describe the jobs your customer is trying to get done as: Buyer (e.g. trying to look good, gain power or status, …)

Co-creator (e.g. esthetics, feel good, security, …)

Transferrer (e.g. products and services that help customers dispose of a product, transfer it to others, or resell, …)

Rank each job according to its significance to your customer. Is it crucial or is it trivial? For each job indicate how often it occurs.

Outline in which specific context a job is done, because that may impose

constraints or limitations. (e.g. while driving, outside, …)

Which savings would make your customer happy?(e.g. in terms of time, money and effort, …)

What outcomes does your customer expect and what would go beyond his/her expectations? (e.g. quality level, more of something, less of something, …)

How do current solutions delight your customer? (e.g. specific features, performance, quality, …)

What would make your customer’s job or life easier? (e.g. flatter learning curve, more services, lower cost of ownership, …)

What positive social consequences does your customer desire? (e.g. makes them look good, increase in power, status, …)

What are customers looking for? (e.g. good design, guarantees, specific or more features, …)

What do customers dream about? (e.g. big achievements, big reliefs, …)

How does your customer measure success and failure? (e.g. performance, cost, …)

What would increase the likelihood of adopting a solution? (e.g. lower cost, less investments, lower risk, better quality, performance, design, …)

Rank each gain according to its relevance to your customer. Is it substantial or is it insignificant? For each gain indicate how often it occurs.

Rank each pain according to the intensity it represents for your customer.Is it very intense or is it very light.? For each pain indicate how often it occurs.

On:

Iteration:

Designed by:Designed for:Day Month Year

No.

Customer Segment

www.businessmodelgeneration.com

Use in Conjunction with the Business Model Canvas Copyright of Business Model Foundry GmbH

Value PropositionCreate one for each Customer Segment in your Business Model

http://businessmodelalchemist.com/


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http://geschaeftsmodellcoach.de/assets/Bilder/_resampled/resizedimage501353-valuepropositiondesignergif.gif


40.2.2 Market Analysis

►  Business development (Geschäftsfeldentwicklung) develops new services, products, and product lines for a company. ►  It also develops business models (business cases), on which decisions for starting-up

or product-introduction can be made ►  Vision statement

■  A simple statement of the vision. What do you want to achieve?

►  Objectives ■  More concrete goals

►  Market analysis ■  Customers: estimate the target group, its size ■  Competitors: how many? how stable is the market, does it develop? ■  Product or service ■  Price ■  Promotional measures ■  Sales/distribution channels ■  Location ■  Where is my niche? Where can I sell? ►  Market position:

■  Location: Are we the only ones or how many competitors offer at this location? (Autos kauft man auf dem Automarkt, aber man verkauft sie nicht dort)

■  Time: Can I sell later?

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40.2.3 Business Model Analysis

►  Business development creates business models ►  For start up and placement of new products ►  [Osterwalder/Pigneur] suggest to split the business model in 9 parts, divided by

input, output, and in between ►  Input (Resource) Side

►  Cost vs Profit ■  Estimate costs! Cost leadership? ■  Estimate break-even point! ■  Distinguish cash flow and profit

■  Middle: Value Proposition and Pain Killing ►  Output Side

►  Target customer group ■  Companies? End customers? [champagne] ■  Selling directly or via distributor?

►  Channels ►  Market entry strategy

■  Segmentation of the market?

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Business Model Generation with Osterwalder/Pigneur

Ø  CC-BY-SA: http://www.businessmodelgeneration.com/downloads/business_model_canvas_poster.pdf

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Earning money with software What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?

Through which Channels do our Customer Segments want to be reached? How are we reaching them now?How are our Channels integrated? Which ones work best?Which ones are most cost-efficient? How are we integrating them with customer routines?

For what value are our customers really willing to pay?For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?

For whom are we creating value?Who are our most important customers?

What type of relationship does each of our CustomerSegments expect us to establish and maintain with them?Which ones have we established? How are they integrated with the rest of our business model?How costly are they?

What value do we deliver to the customer?Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?

What Key Activities do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue streams?

Who are our Key Partners? Who are our key suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?

What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?

Day Month Year

No.

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Business Model Generation with Osterwalder/Pigneur

Ø  Based on the metamodel “Business model canvas”, you can generate your own business model with 9 components

Ø  [Osterwalder/Pigneur] shows many examples, Patterns of business models, and strategies for brainstorming •  This is a very practical book, buy it! •  At least, download the free excerpt, it might change your life.

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Lean Startup BMC [Grönsund] TU

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http://geschaeftsmodellcoach.de/assets/Bilder/_resampled/resizedimage501339-kundenwertkartegif.gif


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http://onpointmarketing.files.wordpress.com/2008/10/business-model-canvas.jpg

40.4 SOFTWARE BUSINESS MODELS



Business Plans

►  It is hard to earn money with software ►  A business plan should be made at the beginning, before starting-up or

before product introduction ■  Business model ■  Market analysis ■  Cost planning (variant A, B, C) ■  Turnaround planning

►  Business plans are the basis for ►  Getting a decision of the upper management ►  Getting a venture capitalist involved

►  Decide in the business plan for a business model

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Closed-Source Software Business Models

►  Leasing (where others buy) ►  Rent (where others buy) ►  Sell advertisements [Opera] ►  Sell directly, order via internet [Dell] ►  Sell via auction [ebay]

■  Suspense during selling is a surprising effect

►  Quality [Tupperware] ►  Speed [amazon] ►  Client relationships [Tupperware]

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Open Source Software Business Models

►  http://en.wikipedia.org/wiki/Open_source ►  Free product (“free taste”)

■  Give the product for free and sell applications or consulting ■  Mould a market with the product ■  Ex. Adobe pdf with Acrobat Reader

►  Free framework ■  Give the framework for free, create a community, and sell applications ■  Ex. IBM gives Eclipse for free, fosters a community, and many sell

►  Release Politics ■  with union-fs (overlay)

►  Micropayment ■  Use micropayment companies for installation or run of a software (PayPal, ..) ■  Use Telecom billing

►  Choose licences carefully ■  http://creative-commons.org ■  GPL is a virus that infects all extensions ■  LGPL not

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Open Source Business Model “Free Taste” (dual-licensing)

►  Free “taster” versions ■  Give out earlier version of the product for free ■  Sell the new version ■  Ex. www.gentleware.com

►  Free “community” versions ■  Give out a stripped version (e.g., only for 1 user, 1 database, ..) ■  Sell full version

►  Free time-restricted versions ■  1 month

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Business Model “Software Product Line (SW-Factory)”

►  Have a framework in-house. ►  Know how: instantiate new products with it, that are sold

■  Keep the product line framework as company secret ►  Examples:

■  SAP, Comarch, many others

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Domain 1 Domain 2 Domain 3

Company Product Line Framework

Product 1 Product 2 Product 3


Finding a New Domain of Customers

Ø  Via your friends Ø  Via facebook Ø  Via domain-specific fairs

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Finding OEM Customers (Supply Chain)

Ø  How to build up a business relationship •  a network (know) •  How to build up confidence (trust)

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SW-Industrielandschaft Deutschlands ungenügend entwickelt

►  Reifegrad gering: i.W. Dienstleistungen ■  keine großen Player außer SAP ■  Viele kleine Firmen (Zersplitterung)

►  In Sachsen noch weniger; alle Firmenzentralen sitzen im Westen (SD&M, Accenture, Oracle, SAP, Microsoft, Ericsson, Nokia, ..) ■  Einige Mittelständler (SAP-SI, T-Systems MMS, Robotron RDS, ComArch, Saxonia)

►  Folgen: ■  Begrenzte Innovationskraft

von KMU/Dienstleistern ■  keine vorausschauenden Investitionen

è  Vorlaufforschung nötig

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SW-Individualprojekte/ Dienstleistung

SW-Produkte

SW-Produktlinien

Reifegrad der SW-Industrie Deutschlands/Sachsens

SW-Plattformen


Business Model “Market Maturization”: From Individual Software to Framework Market”

►  The 5 founders of SAP left IBM in 1974 because they planned a standard generic framework which they could instantiate to applications, which IBM didn’t foresee

►  The idea is that markets mature over time and move from individual software (expensive) to standard software (cheaper)

►  New SAP frameworks (R/1, R/2, R/3, Netweaver, etc) appeared about every 10th year and doubled the turnaround of SAP every 5 years

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Individual software Standard Framework



Business Model “Software Machine Tool (SW-Werkzeugmaschinen)”

►  Have a very complicated Machine Tool in-house. ►  Know how to produce products with it, that are sold

■  Do not sell the machine tool ■  Keep the know-how as company secret

►  Examples: ■  Compiler generators for specific compilers ■  Abstract interpretation generators for program analyses (www.absint.com) ■  Semantic search engines for different domains (www.transinsight.com,

www.gopubmed.com)

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Company

Machine Tool



Business Model “Grandfather Machine Tools (Großvater-Werkzeugmaschinen)”

►  Language-Universal Tool generates ■  Language-1-specific tool generator ■  Language-n-specific tool generator

►  Those machine tools continue to bear grandchildren products

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Domain 1.1 Domain 1.2 Domain 2.2

Machine Tool 1 Language-specific

Product 1.1 Product 1.2 Product 2.1

Company Grandfather Machine Tool

Machine Tool 2 Language-specific

Domain 2.2

Product 2.2


The Farm Approach

Ø  With machine tools and product lines, you get an ecosystem of products and services. •  Services are easy to start with •  Products are harder •  Platforms are lower levels •  However, if you have a platform

on a lower level you can adapt to changes much easier

•  Do several things on several layers

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Farm

Cows, Hens

Cow product (Milk, meat, skin)

Milk product (yaourt, cream, ..)

Restaurant using cow products and milk products

Restaurant guide for good food


Business Model “Grandfather Workflows”

►  Workflow-Universal Tool generates ■  Workflow-1..n

►  Those workflows continue to bear grandchildren workflow portals (form-filling portals)

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Domain 1.1 Workflow portal 1.1



Workflow 1

Product 1.1 Product 1.2 Product 2.1

Company Grandfather

Generic Workflow Engine

Workflow 2


Product 2.2


Business Model “Software as a Service” (SaaS, Utility Computing)

►  Have an engine in-house and sell a (web) service ■  Use AJAX for incremental processing on the web

►  Ex. Google docs

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Company

Tool

Service 1 Service 2 Service 3


4.1.2 BUSINESS MODEL “SOFTWARE PLATFORM” (SOFTWARE ECOSYSTEM)


Software Ecosystem

Modularity technology

Scope Rules

Complements (plugins) App Stores

Platform Leader

Complementors

Third party management

App Services

Software Platforms and Ecosystems

Ø  A software platform is the basis of a software ecosystem [Cusomano] [Popp]

Ø  Value is divided between platform leader and complementor Ø  Large companies want to be platform leaders

Market Rules


Software Ecosystem

Component Model with plugin concept Plugin Tools

Uncertified App Store Certified App Store

Platform Leader Consortium

Plugin/App Provider

Platform Services

App Services

Apps Apps Apps

Consortial Software Ecosystems a la iPad, AutoSAR, GENIVI


Software Ecosystems

Domain-independent platform Eclipse RCP, RAP

Platform Domain 1 Business

Intelligence

Platform Domain 2

Modeling

Plugin/App Providers

Platform Domain 3

Automotive

Domain-specific platforms

.....

Many more layers possible (platforms and ecosystems)

Layered Platforms and Layered Ecosystems (Eclipse.org)


CPS Ecosystem

Rich Component Model with plugin

concept Plugin Tools

Certification Tools

Uncertified App Store Certified App Store

Platform Leader

Plugin/App Provider

Platform Services

App Services

Apps Apps Apps

Future: Software Ecosystems for Cyber-Physical Systems (CPS)

•  Divided by platform leader and App provider •  Apps are safety-critical and must be certified

Composition Tools


Business Model “Versucherle”: Plugins under Dual Licensing

►  Companies can make plugins for OSS tools under dual licensing ■  Thunderbird, Firefox, OpenOffice, Eclipse, ...

►  Example: Quicktext Thunderbird extension http://extensions.hesslow.se/ ■  QuickText is free ■  QuickText Pro is commercial

►  Advantage: Platform has already many users and a large market

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40.3 FOUNDING A SOFTWARE START-UP



Ø  http://www.starting-up.de/ Ø  http://www.starting-up.de/gruenden/businessplan/businessplan-

vorlagen.html

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Strategies About Founding a Company (Start-Ups)

Ø  Founding a startup is very similar to business development in a „normal company“

Ø  Work for 3 years as an employee in the domain in which you want to become an entrepreneur

•  Get a network of contacts Ø  Use a BMBF exist stipend via Dresden Exists

•  To write a business plan within one year •  To eventually found a start-up

Ø  Use a BMBF-VIP „Validation des Innovationspotential“, a Push-Transfer-Instrument of a professor

►  Get always good salespeople on board ■  Wirtschaftsinformatiker ■  Business Angels ■  People that had already a start-up

Ø  Use an incubator •  To rent office space and share secretary

Ø  Use regional networks such as Silicon Saxony www.silicon-saxony.de •  This network meets several times a year, and you can find contacts

►  The role of the venture capital ■  Having money at the right time is essential [MathCore]

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Adresses of Regional IT-Networks in Germany

Ø  Bundesverband BITKOM.org hat mehrere Software-Arbeitskreise (CPS, Security,..) Ø  Bundesverband IT-Mittelstand e.V. (BITMi) http://www.bitmi.de/ Ø  CyberForumKarlsruhe – http://www.cyberforum.de/ Ø  DiWiSH - Clustermanagement Digitale Wirtschaft Schleswig-Holstein -

http://www.diwish.de/ Ø  ikn 2020 – Das digitale Niedersachsen, Hannover - http://www.ikn2020.de Ø  Innozent OWL, Paderborn–http://www.innozentowl.de/ Ø  IT–Forum Rhein-Neckar - hattp://www.itforum.de/ Ø  IT-Netzwerk e.V., Kassel -http://www.it-netzwerk-online.de/ Ø  ITS Niedersachsen, Braunschweig- http://www.its-nds.de/ Ø  Java User Group Hessen,Kassel –http://www.jugh.de/JUGH!/ Ø  ruhr networker e.V., Essen – http://www.ruhr-networker.de/ Ø  REGINA e.V., Aachen -http://www.regina.rwth-aachen.de/ Ø  Silicon Saxony, Arbeitskreis Software, Dresden http://www.software-saxony.de Ø  Softwarestützpunkt Region Cottbus -http://www.ssrc.de/ Ø  Teliaison e.V., Braunschweig - http://www.teliaison.de/ Ø  VKSI: Verein der Karlsruher Software-Ingenieure - http://www.vksi.de/

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Ø  http://www.businessmodelcreativity.net/ Ø  http://www.businessmodelcreativity.net/bmc/myboshi-ein-klasse-case/

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Getting into Business

►  Small companies are a means to create employment ■  Large ones merge and destroy positions

►  Finding a good business idea ■  Find out what custumers need ■  Find a big customer

♦  Find a large user group ■  What do you want to do? Most entrepreneurs earn money with what they want to do.

What is your dream? ■  What is your hobby, skill, experience? ■  Do you have a new invention? [champagne class, Moonpig greeting cards] ■  Apply creativity technologies (brainstorming, ...)

►  Buy a business ■  Whole or in part (e.g., distribution or the development)

►  Management-Buy-Out ■  Buy a part of a company as a manager

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Lean Canvas [Maurya]P

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Differences of Lean Canvas and Business Model Canvas [http://leancanvas.com/]

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The Two Pillars of Lean CanvasP

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http://www.furld.com/wp-content/uploads/2011/04/Empty-Canvas.png


Business Model You Canvas (BMYC)

Ø  http://businessmodelyou.com/ Ø  http://www.ideogram.us/BMY_preview/Business_Model_You_preview.pdf

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40.4 SALES MEETINGS



Selling via Sales Meetings

►  Prepare a sales meeting ■  Analysis of client's situation (needs, problems, state of business)

■  State analysis (IST-Zustand) ■  Problem analysis is most important

■  Goal analysis (needs, offers, next contact, alternatives, additional offers) ■  Strategy (introduction, questions, arguments, defending against counterarguments) ■  Control of meeting (achievements, why I failed, further contacts)

►  Questions are most important ►  For analysis of the customer’s needs ►  For giving him ideas ►  For directing the customer

►  Phases of the sales meeting: (InIAC) ■  Introduction, often with a sales pitch (talk) ■  Information ■  Argumentation ■  Committment

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Earning money with software [Leicher]


Sales Pitches with PaGUE

Ø  In order to sell, you must inform the customer about •  The added value she can buy •  The pain she can be freed of.

Ø  A sales pitch convinces the customer about a unique selling point of a service or product.

Ø  Train talking in front of customers •  Your talks in University are simple preparations

Ø  The pitch must answer the questions PaGUE for the customer: •  What is my pain I will be freed from?

§  Why will I be happy with this new thing? •  What is my gain (added value)?

§  Why will I love this new thing? •  What is the unique selling point of the thing?

§  Why will I live much better than my neighbor? •  Will the cost of buying it be efficient?

§  Why will it be cheap enough for the gain?

Ø  Structure a pitch with PaGUE!

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Nice to

have

Gain

Pain Unique

Efficient


Different Types of Questions in Sales Meetings

►  Open questions: begin with who, why, when, which... ■  The customer can talk afterwards... (information phase)

►  Usefulness questions: which benefit does the customer have ■  “what do you gain with this method?” ■  “when will you be able to achieve turnaround with this method” ■  “what do you think about this simplification?”

►  Closed questions: ■  Do you? Don't you? ■  These questions force decisions (commitment phase)

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►  Alternative question: ■  “Would you prefer alternative A or

B?” ■  “is a red or blue car better?”

►  Suggestive questions: ■  “is it true that you are interested to

simplify your production?” ■  Handle them with care

►  Positive questions: try to avoid negative questions ■  “Are there problems?” --> “What

happened?” ►  Transform statements into

questions ■  “Our competitor is too expensive.” --

> “Do you also feel that our competitor is too expensive?”


State Questions

Ø  A state question asks the customer about his/her state of affairs •  „How can I help you?“ •  „Which functions are you interested in?“ •  „With which supplier do you work these days?“ •  „How large is your budget?“ •  „How is the decision process?“

Ø  State questions are asked first, to enter the discussion

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Problem Questions

Ø  A problem question analyzes together with the customer his problems. Problem questions •  Clear the mind of the customer •  Show him the situation more clear

Ø  Examples •  What is disturbing with your supplier? •  Which functionality is your product lacking? •  Which problems do you have with the tool you use these days?

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Effect and Risk Questions (Auswirkungsfragen)

Ø  An effect question analyzes together with the customer the effect of his problems and the consequences of his decisions.

Ø  A risk question analyzes risks of customer decisions. Ø  Effect questions

•  Visualize the effects of the current situation to the customer •  Look into the future •  Highlight trends and developments •  Bring the customer the insight that he must solve his problem

Ø  Examples for positive effects •  „What is the significance of this problem with your supplier?“ •  Which other problems would this cure? •  What should be changed to increase the effictivity of this tool? •  What does the solution of your problem mean to the win/balance of your company?

Ø  Examples for negative effects (risks) •  „What is the significance if this problem is not solved?“ •  Which other problems would result if this is not solved? •  Supposed you leave it like it is, what would result?

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Effect questions are extremely important for sales decisions


Summarization Questions

Ø  A summarization question summarizes the results of the analysis and attempts to get the agreement with the customer about the analysis

Ø  A benefit question highlights a benefit to the customer. •  „Which additional space could you win buying this new machine?“ •  „How would the win of your company rise, given you buy this machine?“

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Benefit questions are extremely important for sales decisions


The EndTU

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http://www.nutbaser.de/language=de/1076/einfache-vertriebsmethodik-verkaufsmethodik

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40. earning money with software - tu dresdenst.inf.tu-dresden.de/files/teaching/ws15/st2/... ·...

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