1. © John Mullins 2011, LBS The Loot Epilogue: John W. Mullins London Business School

2. National Entrepreneurship Network 2 © John Mullins 2011, LBS The Decision: Take Desai’s Proposal “We had found a revenue model that consumers loved, but the working capital and investment models just were not working.” Jay Gupta

3. National Entrepreneurship Network 3 Franchising: A Business Model That Can Grow Pro - Minimal investment to open new stores - Positive cash flow in year one - And a 2-year payback for the franchisee Con - Less lucrative over the medium and long term © John Mullins 2011, LBS

4. National Entrepreneurship Network 4 Loot’s Solution Franchise the outlying small cities and towns Use franchisees’ cash to open company- owned stores in the Tier 1 cities © John Mullins 2011, LBS

5. National Entrepreneurship Network 5 Loot’s Progress By mid-2011 160 stores across India 110 franchises in 70 cities, owned by about 50 franchisees 50 company stores in Mumbai, Delhi, Pune and more All accomplished out of cash flow, plus secured debt from the banks © John Mullins 2011, LBS

6. National Entrepreneurship Network 6 Continuing Challenges Logistics -Can take a week or more to ship across state lines into small towns -Adds to Loot’s operating cash cycle, tying up cash Trust -New franchisees want to see the merchandise they will be receiving © John Mullins 2011, LBS

7. National Entrepreneurship Network 7 Lessons Learned about Business Models All five elements must work together -Getting the revenue model and gross margin model right were not sufficient Where is cash found (or tied up) on your financials? Getting your P&L right isn’t enough Building a great business model is equally a balance sheet issue So, “Learn to love thy balance sheet!” © John Mullins 2011, LBS

8. National Entrepreneurship Network A Tool for the Journey: The Business Model Grid Investment Model Working Capital Model Operating Model Gross Margin Model Revenue Model Business Model Element AnalogsAntilogsLeaps of Faith Hypotheses 8 © John Mullins 2011, LBS

9. National Entrepreneurship Network Can this Work for You? The Proof of the Pudding 9 © John Mullins 2011, LBS

10. National Entrepreneurship Network What Do These and Others Have in Common? None stuck to their original business model All became household names by abandoning Plan A and getting to Plan B And how many elements did they change? 10 © John Mullins 2011, LBS

11. National Entrepreneurship Network There Is a Solution to Business Models that Don’t Work… Stop working on your business plans And get on with your business model, and your journey to a more vibrant Plan B -Find some analogs and antilogs -Identify your most crucial leaps of faith and some hypotheses to examine them -Build a dashboard to guide your journey -Get out there and learn 11 © John Mullins 2011, LBS

12. National Entrepreneurship Network For the Rest of the Story, in Bookstores Now… Number 1 Best-seller: “Best Books for Business Owners”, 2009 Inc. Magazine 12 © John Mullins 2011, LBS