Mobile Academy: Business Models

Posted on October 11, 2012

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 Business models

B2 Busi­ness Model Canvas Designing a killer product is only half the puzzle of building a new busi­ness. The other half is cre­ating a break­through busi­ness model. Start to use Osterwalder’s Busi­ness Model Canvas to dissect, analyse, and invent new busi­ness models. Ian Mac­Millan 25/9, 8pm (Tues)
The Business Model Canvas is a single page tool that has a range of sections for you to fill in,  it is a relatively quick thing to fill in,  and this is deliberate,  the thinking is that you should be able to construct several in the hunt for the best.  Also if you have lots of ideas (lucky you,  send some my way,  why dontcha) then it is not too hard a burden to fill it in.
As will be explained in a later sesh (yes I’m catching up on writing these,  I’m such a bad boy),  getting the business model correct is key to success, which is an obvious thing to say,  but the detail and range of things to consider is wider than you might think.
So the canvas has areas for the major parts of your business’s characteristics..
The best approach is not to write directly on it but to use post-its or similar so that you can move things around, because often costs or relationships will move around as you understand the nature of the relationship.
The tutor, Ian MacMillan, who does this for a living, made the point that at the beginning your business model will be full of guesses or assumptions,  and that over time,  part of the job is to replace these with more certain answers.  So you should not rush creating it,  and come back to it and re-assess what you have.
And,  when you have started to get some belief in your business case,  then you can use it as a way to communicate, because there will be lots of folks that will need to understand it, and perhaps critique it.
Ok so what is the canvas,  and where can you get it.  It is at the Business Model Generation site,  it is open and you can download it for yourself.
There is a great video that explains it far better than I can,  it’s only a couple of minutes,  so go on give it a go.
Remember the business model is not just about the facts and figures it also needs to explain your right to exist,  your uniqueness (often called a USP) and the vision.
Right so what are the elements of the business model
  • Customer Segments
    Who will buy your services,  you may have a 2 sided business model,  you’ll need to include all of them.  Make sure that you are able to provide a proper persona/research into the Key customers.
  • Value Propositions
    This is the value you provide to your customers,  these are the things people will pay for.
  • Channels
    How do you reach your potential and actual customers.  How do they get in touch with you.  Given the new world, don’t forget social channels including the less obvious like Flikr and the like,  more on this in the piece on PR.
  • Customer Relationships
    How do your customers interact with you,  how can you communicate with them.  Consider the costs of this.
  • Partners
    with whom will you work to deliver the value propositions ? these may be both input partners and channel partners. Look out for costs, direct and indirect, so you do not miss a key element of the cash flow etc.
  • Activities
    What are the processes and actions your business will have to undertake,  ensure that you keep visiting this for those activities that are less obvious.
  • Resources
    what do you need to execute your business,  Resources normally equal a cost,  so do think about as many as you can.
  • Cost Structure
    cash, cash, cash,
    make sure you can separate those that are ongoing costs of operations,  and those that are buying assets.  Other still are sunk costs that are perhaps one off,  but do not result in an asset.
  • Revenue Streams
    where and how will you earn money,  are there ways you can expand the range and number of revenue streams.
    do not forget to consider when they will kick in.  Be warned of over optimistic predictions of customer numbers.
Ok there you have it,  the web site for the Canvas has a lot more details and what I took away from Ian’s excellent talk(s) is that this is a key communication tool to get the facts of your idea over,  and to make sure you ask a wide range of questions to ensure you don’t forget something,  all that,  and to do more than one,  or to keep tweaking it,  it wil change and grow,  and this is ok.  My own advise is that if you are building it using post-its,  then take photos so you can go back in time !
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