2. The Business Model Canvas Gilson Series November 17, 2011 Susan Carlson and Mark Huber

3. Business Model Generation Alexander Osterwalder & Yves Pigneur Open Source ~ 500 contributors A handbook for generating innovative new business models

4. Business Model Describes the rationale of how an organization creates, delivers and captures value. Not a business plan Should be integral to a business plan

6. Business Model Canvas 9 Building Blocks – Customer Segments – Value Proposition – Channels – Customer Relationships – Revenue Streams – Key Resources – Key Activities – Key Partnerships – Cost Structure

7. Customer Segments Who is being served by your offering? One or many segments? How are they different? How are they the same?

8. Value Proposition What are you offering? Which goods? Which services? How do offerings change by customer segment?

9. Channels How will you communicate with your customer segments? How will you deliver your goods and services to your customer segments? How do you structure the sales cycle to meet your customer segments’ needs?

10. Customer Relationships What type of relationship does each customer segment prefer? What tools should you use to establish the relationships with each customer segment? How frequently should you be in contact with the different customer segments?

11. Revenue Streams How are you going to make money? Are sales recurring or one-time? Is there an ongoing service relationship? What is the sales cycle for your value proposition?

12. Key Resources What assets do you need to provide your value proposition to customers? – People – Service Delivery – Manufacturing – Distribution – Customer Service – Other?

13. Key Activities What do you have to do to deliver your goods and services well? – Sales – Customer service – Manufacturing – Delivery – Design – Infrastructure Development

14. Key Partnerships What do you need to outsource or acquire from outside your business? – Specialized skills – One-off services – Key components and raw materials – Complementary services – Other?

15. Cost Structure What will it cost to deliver your goods and services to each customer segment? – Manufacturing – Sales – Quality Control – Delivery – Customer Service – Other?

16. Patterns Five Typical Business Model Patterns

17. Def_Pattern No. 1 The concept of the “unbundled” corporation holds that there are three fundamentally different types of businesses: Customer Relationship businesses, product innovation businesses, and infrastructure businesses. Each type has different economic, competitive, and cultural imperatives. The three types may co-exist within a single corporation, but ideally they are “unbundled” into separate entities in order to avoid conflicts or undesirable trade-offs.

18. Def_Pattern No. 1.

19. Def_Pattern No. 2 LONG TAIL BUSINESS MODELS are about selling less of more: They focus on offering a large number of niche producers, each of which sells relatively infrequently. A ggregate sales of niche items can be as lucrative as the traditional model whereby a small number of bestsellers account for most revenues. Long tail business models require low inventory costs and strong platforms to make niche content readily available to interested buyers.

20. Def_Pattern No. 2 The Long Tail Sales

21. Def_Pattern No. 3 MULTI-SIDED PLATFORMS bring together two or more distinct but interdependent groups of customers. Such platforms are of value to one group of customers only if the other groups of customers are also present. The platform creates value by facilitating interactions between the different groups. A multi-sided platform grows in value to the extent that it attracts more users, a phenomenon known as the network effect.

22. Def_Pattern No. 3

23. Def_Pattern No. 4 FREE In the FREE business model at least one substantial Customer Segment is able to continuously benefit from a free-of-charge offer. Different patterns make the free offer possible. Non-paying customers are financed by another part of the business model or by another Customer Segment.

24. Def_Pattern No. 4 “Freemium” model and “pro” account Advertiser paid, free content to users “Bait and hook” to attract buyers

25. Def_Pattern No. 5 OPEN BUSINESS MODELS can be used by companies to create and capture value by systematically collaborating with outside partners. This may happen from the “outside-in” by exploiting external ideas within the firm, or from the “inside-out” by providing external parties with ideas or assets lying idle within the firm.

26. Def_Pattern No. 5