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Business Model

Who’s customer? What they value? How to make money?

“The economic logic which explains how you deliver value to customers at an appropriate cost”

Business Model Canvas (BMC)

BMC is a simple tool which can help you better understand your startup ideas business model. The BMC will help you design your business model, and the important underlying the assumptions (resources, activities etc.). 

The nine components of a BMC include:

  1. Customer Segments:  Who are your ideal customers?
  2. Distribution Channels:  How do you get your offering into the hands of your customers?
  3. Customer Relationships:  How do you interact with customers and what they expect of you?
  4. Value Proposition:  What you do that is special (valuable to customers)?
  5. Key Resources:  What you need to accomplish key activities?
  6. Key Activities:  What you must do to deliver your value proposition?
  7. Key Partners:  Who you need (suppliers, collaborators etc.), to deliver value proposition?
  8. Cost Structure:  What are the major expenses when launching the business idea?
  9. Revenue Stream:  How do you drive revenue into the business?

Business Model (5:00)

Bill Reichert

The engine of your startup is your business model.

NOTE: video starts & stops at pre-assigned times

Business Model Canvas (9:30)

Steve Blank

Describing, designing, challenging, inventing, and pivoting your business model.

NOTE: video starts & stops at pre-assigned times

ACTIVITY

Business Model Canvas

Create your very first BMC now! If you have already done this before… why not make a new canvas which is full of fresh ideas!

Download the Business Model Canvas Template (pdf)

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BMC Traps

  1. The BMC is built around a value proposition that solves a job that customers don’t care enough about (failure to achieve product-market fit).
  2. The BMC is flawed (value proposition generates more costs than revenues, fails to establish the proper channels to reach and deliver value to your customers, does not establish customer relationships, and fails to focus on the right activities or the right key partners and resources).
  3. External threats (potential competitors). You may never even acquire customers if your competition’s business model locks in customers, and prevents them from switching to you.
  4. Poor execution (resources – physical, human, and capital – are not properly aligned around the most critical elements of the BMC). Most startups measure and monitor a lot of things, but rarely do they use the BMC as a starting point to define the critical success factors to follow (Key Performance Indicators – KPI’s).
Source: strategyzer.com

Create A BMC Now!

Snap Quiz

Completing quiz helps enhance your learning!

Course Curated By: Dr. Gerard L. Danford

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