BUSINESS MODELLING WORKSHOP

BRIEF INTRO

Who we are

What we want to achieve

What are we expecting/looking for

THE STARTING POINT

Stating something obvious

Every customer has a problem,

every problem has a solution

Not every solution has a problem

Not every problem has a customer

And context evolves quickly:

▪ Markets

▪ Needs, behaviors and expectations

▪ Technologies

Source: FET2RIN project

Without a customer WILLING TO PAY for your solution, you are condemned to fail

THE STARTING POINT

From Investopedia

“A business model is a company's plan for how it will generate revenues and make a profit. It

explains what products or services the company plans to manufacture and market, and how it

plans to do so, including what expenses it will incur”

Definitions

BUSINESS MODEL – SOME EXAMPLES

The bricks and clicks business model – Business model which integrates both offline (bricks) and

online (clicks) presences

The direct sales business model – Direct selling is marketing and selling products to consumers

directly, away from a fixed retail location

Franchise – Franchising is the practice of using another firm's successful business model (the

franchisor build the brand, the production and delivery model, the value proposition, … and the

franchisee contributes to building the chain of stores

The freemium business model – Business model that works by offering basic Web services for free,

while charging a premium for advanced or special features

BUSINESS MODEL – SOME EXAMPLES

The razor and blades business model – It is a business model where one item is sold at a low price

(or given away for free) in order to increase sales of a complementary good, such as supplies

The subscription business model – It is a business model where a customer must pay a subscription

price to have access to the product/service (and pays different prices for different packages)

The utility or pay-as-you-go or on-demand business model – It is a business model based on

metering usage

The flat rate business model – A single fixed rate fee for a product or service is charged, regardless

of actual usage or time restrictions, while the company benefits from a constant revenue stream

The add-on business model – It is a business model where the core offering is priced competitively,

but there are numerous extras that drive the final price up

BUSINESS MODEL – SOME EXAMPLES

The experience selling business model – The value of a product or sevice is increased with the

customer experience offered with it

The hidden revenue business model – This concept facilitate the ideas of separation between user

and customer

The layer player business model – A layer player is a specialized organisation limited to the provision

of one value-adding step for different value chains

The open source business model – The source code of a software product is not kept proprietary,

but it is freely accessible (partially or totally) for anyone, the benefit is the contribution provided by

third parties to the improvement of the product/service

BUSINESS MODEL – SOME EXAMPLES

The white label business model – A white label producer allows other companies to distribute its

goods under their brands, so that it appears as if they are made by them

The trash-to-cash business model – Used products are collected and either sold in other parts of the

world or transformed into new products

WHAT OTHER BUSINESS MODEL IS ALREADY UNDER DEVELOPMENT?

DEFINING THE BUSINESS MODEL

Knowing the problem

▪ What are the requirements

▪ What are the functionalities

▪ What are the core features

The traditional approach to innovation

Knowing the solution

▪ How to implement it

▪ How to deliver it

▪ How to maintain it

The context evolves quickly

HIGH RISK of wasting time and

resources

TOP DOWN

APPROACH

DEFINING THE BUSINESS MODEL

From Wikipedia

“Lean startup is a methodology for developing businesses and products, which aims to

shorten product development cycles by adopting a combination of business-hypothesis-driven

experimentation, iterative product releases, and validated learning. The central hypothesis of

the lean startup methodology is that if startup companies invest their time into iteratively

building products or services to meet the needs of early customers, they can reduce the

market risks and sidestep the need for large amounts of initial project funding and expensive

product launches and failures”

Eric Ries, The lean Startup (2008), Ash Mayura, Running Lean (2012)

Definitions

THE BUSINESS MODEL CANVAS

The Business Model Canvas is a

strategic management template

invented by Osterwalder and Pigneur

for developing new business models

or documenting existing ones

It is a visual chart with elements

describing a firm's value proposition,

infrastructure, customers, and

finances. It assists firms in aligning

their activities by illustrating potential

trade-offs

UNDERSTAND THE PROBLEM FIRST AND DEFINE THE SOLUTION AFTERWARDS

The Lean Canvas is a version of the

Business Model Canvas adapted by

Ash Maurya specifically for startups

The Lean Canvas focuses on

addressing broad customer problems

and solutions and delivering them to

customer segments through a unique

value proposition

UNDERSTAND THE PROBLEM FIRST AND DEFINE THE SOLUTION AFTERWARDS

Understanding the problem implies the need to interact with your potential clients and

discuss/explore what are the problems they face – the focus should be the problem NOT the

solution

▪ What is “his/her” problem

▪ Who is “he/she”

▪ How does he/she solve the problem now

▪ Is our product more efficient in solving this issue?

Exploring the market and discussing the problems and issues with potential clients implies

leaving the office/lab and interviewing them

UNDERSTAND THE PROBLEM FIRST AND DEFINE THE SOLUTION AFTERWARDS

INNOVATION

PRODUCT

INFORMATION

The virtuous cycle of market-

oriented innovation

VALUE PROPOSITION CANVAS

The Value Proposition Canvas

matches on the one hand the

customer profile (the set of customer

characteristics that you assume,

observe and verify in the market) with

on the other hand the value map (the

set of value proposition benefits that

you design to attract customers)

CUSTOMER DRIVEN INNOVATION

PRODUCT DRIVEN INNOVATION

Q & A

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