Below, excellent videos from Strategyzer, simple, concise, easy to understand on Customer Development (my tweets on CustDev) methodology from Steve Blank using the Business model canvas from Alex Osterwalder
Also use e.g. CANVANIZER to map your Business Model !
Activate the captions/ subtitles (option apparently only works when the video is playing)
- A great business idea needs a great business model !Many ideas fail to turn in a successful Business
- Many reasons for failing amongst which :
- Customers don't care about the problem your idea solves
- Customers do like your Value Proposition but the Business model is not scalable & financially sustainable,
- You haven't identified reliable channels to reach & acquire customers,
- You don't have the Infrastructure you need when your business begin to grow,
- Find the right Business Model with Business Model canvas and go & test it in the real world!
- Description of each of the 9 blocks of the Business model working together /their interactions
- Right (What) and left side (How) of the Business Model
- Make a Story how your business will create, deliver, capture value
- Start with value Proposition
- Decide Who do you sell it to
- How do you get it to them
- How this will generate revenue
- Key resources you need to offer your product/service
- Focus on your Business Model not your product or technology
- Don't fall in love with your first Business Model -> Predictable Business Model can work but rarely give you a competitive advantage. Think harder, explore alternatives. Find a disruptive Business Model e.g. Nespresso, Skype -> freemium model. Look at other places for ideas in other industries.
- Iterate rapidly & test your model rapidly!
- You have mapped the elements on the BM that are in your control (internal factors) . Now map the environment your business is entering (external factors).
- Prepare your BM for threats!
- Market forces (which other segments can you target, what do they want, key trends, regulations, etc)
- Main competitors & suppliers, partners
- Macro economice forces (access capital, market uncertainty, infrastructure, etc)
- Key trends
- Make your BM better suited for the environment
Time to fail -> TEST & ADAPT YOUR BUSINESS MODEL COMPONENTS -> CUSTOMER DEVELOPMENT & LEANSTARTUP METHODOLOGY
- Your hypothesis are most likely to be wrong -> Fix them!
- State your mots important hypothesis & Test them -> GET OUT IN THE WORLD
- Go out & test your hypothesis -> talk to distributors, partners, industry experts, etc (Low cost experiments) and more importantly prospective customers that will help you mature your Busines Model
- Modify your original idea in favor of a Business Model that will actually work based on the Test, Fail methodology
- Intensify testing -> Test, learn, adapt -> mature your model, adapt rapidly, cheaply
Here's an excellent pitch !
- Start from BM canvas
- Don't show model all at once
- Tell it like a story
- Start with Customer segments -> Market size
- Then Value proposition per segment
- How do you monetize this -> Revenues per segment
- Explain what you learn from your testing / show that you validated your hypothesis about customer pains (test, fail, adjust)
- Show market size/ market potential -> Huge