Business Model Canvas Workshop

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creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

The templates here are made available on the same CC license terms as the original canvas.

(Cost Structure) (Key Partners) (Key Activities) (Key Resources) (Revenue Streams) (Customer Relationships) (Channels) (Value Propositions) (Customer Segments)

Venture Design Workshop IV

Engineering Your

Business Model

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ABOUT ME

Entrepreneur (5x)

Intrapreneur (1x)

(3)

ALEX COWAN

AlexanderCowan.com @cowanSF

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ABOUT ME

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AGENDA

Period! Deliverables!

Venture Design I: Achieving Customer Relevance

Personas

Problem Scenarios-Alternatives-Value Propositions Start Business Model Canvas

Storyboards

Customer Discovery Venture Design II: Iterating to

Success

Venture Planning- focal hypotheses, experiments, and minimum viable ‘product’

Venture Design III: Focusing & Validating Venture Progress

Review of field work, refinements of approach, planning next steps.

Venture Design IV: Engineering Your Business Model!

Detailing your business model and remaining focal assumptions.

Venture Design V: Designing the Right Product!

Pairing your learnings on personas & hypotheses with high quality, actionable inputs (stories & wireframes) for product development and product validation.

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THE BUSINESS MODEL CANVAS

This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http:// creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

(Cost Structure) (Key Partners) (Key Activities) (Key Resources) (Revenue Streams) (Customer Relationships) (Channels) (Value Propositions) (Customer Segments) ALEX COWAN AlexanderCowan.com @cowanSF

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CUSTOMER DEVELOPMENT

MVP Nascent Product-Market Fit(?) Scale PIVOTAL ASSUMPTIONS PRODUCT ORGANIZATION PARTNERS, CHANNELS Founders N/A Probably too soon Test, revise, test... MVP Customer dev. team Probably too soon Validated- now tactical Focus: efficiency, extension Full functional organization Yeah, maybe? Validated- now tactical What would a startup do?? Scalable organization Yeah, definitely!

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CUSTOMER DEVELOPMENT & THE CANVAS

MVP

Product-Market

Fit(?) Scale

Thinking through what you want the business to be for a better idea of what you don’t know.

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CUSTOMER DEVELOPMENT & THE CANVAS

Focal point for managing your assumptions- which are open? closed? what are their inter-relationships?

MVP

Product-Market

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CUSTOMER DEVELOPMENT & THE CANVAS

Focal point for organizing incremental ‘growth hacking’ experiments.

MVP

Product-Market

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CUSTOMER DEVELOPMENT & THE CANVAS

Strategy management tool and jumping off point for new ‘intrapreneurial’ ventures and business model innovation.

MVP

Product-Market

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The Canvas is a housekeeping tool.

It won’t hand you the gold but it will

help you monitor how things are

panning out.

ALEX COWAN

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Personas

IT’S A PROCESS

Some techniques are more effective than others.

But they all require substantial, consistent exertion.

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Foundation in Design Thinking

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VENTURE DESIGN

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VENTURE DESIGN

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User Stories & Test Cases Business Model Canvas Experiment Learn Hypothesize Lean Startup-Style Assumptions

VENTURE DESIGN

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Foundation in Design Thinking Product & Promotion

User Stories & Test Cases Business Model Canvas Experiment Learn Hypothesize Lean Startup-Style Assumptions

VENTURE DESIGN

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Canvas

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THE CANVAS: 3 PARTS

ALEX COWAN

Oﬀering Customers Infrastructure Cost_1 Cost_2 Cost_3 Partner_1 Partner_2 Partner_3 Activity_1 Activity_2 Activity_3 Resource_1 Resource_2 Resource_3 Revenue_1 Revenue_2 Revenue_3 Relationship_1 Relationship_2 Relationship_3 Channel_1 Channel_2 Channel_3 Proposition_1 Proposition_2 Proposition_3 Persona_1 Persona_2 Persona_3

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REALLY GETTING CUSTOMER SEGMENTS

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SEGMENT TO VALUE PROPOSITION MAPPING

Cost_1 Cost_2 Cost_3 Partner_1 Partner_2 Partner_3 Activity_1 Activity_2 Activity_3 Resource_1 Resource_2 Resource_3 Revenue_1 Revenue_2 Revenue_3 Relationship_1 Relationship_2 Relationship_3 Channel_1 Channel_2 Channel_3 Proposition_1 Proposition_2 Proposition_3 Segment_1 Segment_2 Segment_3 ALEX COWAN AlexanderCowan.com @cowanSF

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THE INDEPENDENT VARIABLE

Value Propositions

Customer Segments

This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http:// creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. The templates here are made available on the same CC license terms as the original canvas.

(Cost Structure) (Key Partners) (Key Activities) (Key Resources) (Revenue Streams) (Customer Relationships) (Channels) (Value Propositions) (Customer Segments) ALEX COWAN AlexanderCowan.com @cowanSF

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CUSTOMER SEGMENTS VS. PERSONAS

≈

Customer

Segments

Customer

Segments

Personas

ALEX COWAN AlexanderCowan.com @cowanSF

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Empathy

Creativity

(26)

ALEX COWAN

(27)

Entry

1

Urinate as they go

2

Edges preferred

3

Speedy

4

PB > cheese

5

Empathy

DESIGN THINKING- APPLICATIONS

ALEX COWAN

(28)

Check & Repair

UV Validation

Relevant Placement

A Better Mouse Trap

Powered by Better Bait

Creativity

1 2 3 4 5

DESIGN THINKING- APPLICATIONS

ALEX COWAN

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DESIGN THINKING- PERSONAS

Personas

Problem Scenarios Alternatives

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DESIGN THINKING- PERSONAS

ALEX COWAN

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DESIGN THINKING- PERSONAS

ALEX COWAN

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DISCOVERY & LEARNING: THINK-SEE-FEEL-DO

ALEX COWAN

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X

PROBLEM SCENARIO

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ALEX COWAN

X

What job(s) are you doing for

the customer?

What existing need or

behavior are you fulfilling?

PROBLEM SCENARIO

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?

X

ALTERNATIVE(S)

PROBLEM SCENARIO

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?

X

If they currently use

spreadsheets, watch them

use it and get a copy of it.

If they currently put notes on the

family fridge, ask about it,

photograph it.

ALTERNATIVE(S)

PROBLEM SCENARIO

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ALEX COWAN

YOUR VALUE PROPOSITIONS

!

ALTERNATIVE(S)

?

PROBLEM SCENARIO

X

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ALEX COWAN

X

Are they better enough than the

alternative(s)?

!

?

YOUR VALUE PROPOSITIONS

ALTERNATIVE(S)

PROBLEM SCENARIO

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ENABLE QUIZ: EXAMPLE PROBLEM SCENARIOS

X

Helen the HR Manager

“It’s hard for me to screen on technical skill sets and I end up sending Frank unqualified

recruits.”

Frank the Functional Manager

“I have limited time and I don’t want to be a jerk. It’s hard to screen for all the relevant technical skill sets.”

PERSONA

PROBLEM

SCENARIO

- Call references

- Take their word for it

- A few probing questions - Take their word for it

?

ALTERNATIVE(S)

!

VALUE

PROPOSITIONS

New ability for meaningful screening of technical

candidates, increasing % of successful hires and lowering Frank’s workload on recruiting.

Less time doing interviews, and better hires sooner.

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STORYBOARDING A PROBLEM SCENARIO

AFTER BEFORE

BEFORE

(using the

Alternative)

AFTER

(with the Value

Proposition)

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EXERCISE- PERSONA CREATION

Mary the Working Mom

Susan the Stay-at-Home Mom Douglas the Dad

Nathan the Nanny Ivan the Infant …

List at least 3 personas

(4 min)

use 1 index card/ persona

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EXERCISE- PERSONA CREATION

Mary the Working Mom (B, U)

Susan the Stay-at-Home Mom (B, U) Douglas the Dad (U)

Nathan the Nanny (U) Ivan the Infant (U) …

Which are buyers? Users? Both?

Note with a ‘B’ and/or a ‘U’ on the Index Card

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EXERCISE- PERSONA CREATION

(2 min)

Can you think of 5 real examples for each?

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EXERCISE- PERSONA CREATION

Which have the most compelling need, desire?

If you could only pitch 1 persona type, which? Sort top to bottom

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EXERCISE- VALUE PROPOSITIONS

Brainstorm Problem

Scenario-Alternative-Value Proposition

Trios.

YOUR VALUE

PROPOSITIONS

!

ALTERNATIVE(S)

?

PROBLEM SCENARIO

X

Problem: Mary would like to be more

structured and consistent in her use of allowances to teach the link between work and financial rewards.

Alternative: Track the completion of chores,

homework, etc. manually using paper, boards, notes on her phone.

Value Proposition: Use our app to easily and

consistently implement best practices tailored to your situation.

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EXERCISE- VALUE PROPOSITIONS

Prioritize your value propositions-

if you could only pitch one, which?

After that? Etc.

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EXERCISE- MAPPING PERSONAS, VALUE PROP’S

1. List your prioritized personas

(Customer Segments block)

and Value Propositions

2. Map your personas to your

Value Propositions

Activity_1 Activity_2 Activity_3 Proposition_1 Proposition_2 Proposition_3 Persona_1 Persona_2 Persona_3

(3 min)

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PEER PRESENTATIONS PREP!

(4 min.)

For [target customer] who [statement of the need or opportunity], the

[product name] is a [product category] that [statement of key benefit/

key reason to buy]. unlike [primary alternative], our product [statement

of primary differentiation].

For [hiring managers] who [need to evaluate technical talent], [Enable

Quiz] is a [talent assessment system] that [allows for quick and easy

assessment of topical understanding in key engineering topics]. Unlike

[formal certifications or ad hoc questions], our product [allows for

lightweight but consistent assessments of technical talent].

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As

Presenter

As

Audience

PERSONAS & VALUE PROPOSITIONS

1) Intro. with your positioning statement. 2) Who is/are the top persona(s)?

3) What’s cool about the value prop.?

4) If applicable, how do they differ between the personas?

- Focus on the process; avoid editorial - Ask a lot of questions

- Think about it like an investor

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REALLY GETTING RELATIONSHIPS & CHANNELS

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A

I

D

A

O

R

ttention

nterest

esire

ction

nboarding

etention

How do they first

find out that you,

your proposition

exist?

How do you break

through the noise

floor?

(52)

A

I

D

A

O

R

ttention

nterest

esire

ction

nboarding

etention

What is it that

engages them with

your proposition?

How will you

(53)

A

I

D

A

O

R

ttention

nterest

esire

ction

nboarding

etention

Are you connecting

with an important

problem scenario?

Is your VP better

enough than the

alternative?

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A

I

D

A

O

R

ttention

nterest

esire

ction

nboarding

etention

What is absolute

minimum set of

actions required by

the customer to

have you deliver on

their problem?

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A

I

D

A

O

R

ttention

nterest

esire

ction

nboarding

etention

How do they

become a regular,

habitual user? How

will you know if

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A

I

D

A

O

R

ttention

nterest

esire

ction

nboarding

etention

How do you

deepen their

involvement?

Investment? How

do you get them

talking about it?

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Using the

squares, create

a 6-panel

AIDA(OR)

storyboard

(10 min)

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EXERCISE- CUSTOMER RELATIONSHIPS

GETTING STARTED

1. Bounce off your take on AIDA(OR)

2. Decouple any concierge/hand-holding actions you use for discovery from your target steady state

3. Variation by segment?

4. How will you know if it’s working?

EXAMPLES

‘dedicated personal service’ (onsite? offsite?) ‘personal service’

‘phone support’

‘web/email based tickets’ ‘web self-help and forums’

(3 min)

Customer

Relationships

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EXERCISE- CHANNELS

GETTING STARTED

1. Bounce off your take on AIDA(OR) 2. Variation by segment?

3. How will you know if it’s working?

EXAMPLES

SALES

hand sales (direct or indirect?) retail web phone delivery

(3 min)

PROMOTION

personal (direct vs. indirect?) specialty media

television radio

AdWords + SEO

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As

Presenter

As

Audience

RELATIONSHIPS & CHANNELS

1) What’s the AIDAOR journey?

2) How do the Relationships & Channels work for that?

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REVENUE STREAMS

Don’t overcomplicate it.

When a plumber does

something, you pay them.

If a sink garbage disposal lasts

twice as long, you’d pay more,

right?

ALEX COWAN

(64)

CREATE PRICING THAT TESTS ELASTICITY

Base

(65)

EXERCISE- REVENUE

GETTING STARTED

1. Where are you providing value? When?

2. How does the customer’s perception of value change over the course of their experience with the product?

3. How will you collect revenue, administratively?

EXAMPLES

price/unit

access/subscription fees utilization fees

support & maintenance contracts hourly billing

fixed price services billing royalties/revenue share

(3 min)

Revenue

Streams

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EXERCISE: SEGMENT TO VALPROP TO REVENUE

(2 min)

Cost_1 Cost_2 Cost_3 Partner_1 Partner_2 Partner_3 Activity_1 Activity_2 Activity_3 Resource_1 Resource_2 Resource_3 Revenue_1 Revenue_2 Revenue_3 Relationship_1 Relationship_2 Relationship_3 Channel_1 Channel_2 Channel_3 Proposition_1 Proposition_2 Proposition_3 Persona_1 Persona_2 Persona_3

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THE CANVAS: 3 PARTS

ALEX COWAN

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THE CANVAS: 3 PARTS

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3 BUSINESS MODEL TYPES

1. INFRASTRUCTURE-DRIVEN

2. CUSTOMER SCOPE-DRIVEN

3. PRODUCT-DRIVEN

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3 BUSINESS MODEL TYPES

Infrastructure-Driven

UTILITIES TELECOM COMMODITIES

Scope-Driven

RETAIL BANKING CORP. LAW

Product-Driven

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3 BUSINESS MODEL TYPES

INFRASTRUCTURE

Kimberly-Clark: paper pulp DuPont: plastics and polymers

SCOPE

Procter & Gamble: cradle to grave products Baby Store: everything for babies in one place

PRODUCT

EarthBaby, TinyTots, Honest Company: compostable diapers and service

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EXERCISE- KEY ACTIVITIES

GETTING STARTED

1. Bounce off your business type

2. What is particular, strategic to your business model? 3. How will you do these things?

4. Will partners be involved? Should they be?

(3 min)

EXAMPLES

INFRASTRUCTURE: a) industry participation b) supply chain management c) process design and iteration

SCOPE: a) industry participation b) growth marketing online’ [SEO, web analytics..] c) supplier management

PRODUCT: a) software product development b) growth marketing online’ [SEO, web analytics..]

Key

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EXERCISE- KEY RESOURCES

GETTING STARTED

2. What is particular, strategic to your business model? 3. How will you get it?

EXAMPLES

(3 min)

INFRASTRUCTURE: a) ‘track record in [relevant topic]’ b) investment in infrastructure’ c)’supplier relationships/integration’

SCOPE: a) ‘track record with [customer segment]’ b) channel or partner relationships

PRODUCT: a) proprietary technology b) rapid prototyping and validation methodologies c) expertise in [exotic technology]

Key

(74)

EXERCISE- KEY PARTNERSHIPS

GETTING STARTED

2. What is particular, strategic to your business model? 3. Are you comparatively good at it?

4. Where will partners make the business bigger and more effective?

EXAMPLES

‘direct sales partners’ ‘content creators’ ‘retail or distribution’ ‘creative agency’ ‘subcontractors’ ‘referral network’

(3 min)

Key

Partnerships

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COST STRUCTURE

ALEX COWAN AlexanderCowan.com @cowanSF

Minimize: Obviously.

Defer: MVP’s; don’t over invest

for the sake of creating ‘output’

Link: To revenue as much as

possible (variable vs. fixed).

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PROFIT DRIVERS: EXAMPLE

ALEX COWAN AlexanderCowan.com @cowanSF Profit Drivers Revenue Drivers

Tighter Proposition (website, pres., etc.) Finite Cost

Finite Deliverables

Increased Use of Channels Ease of Entry

Easy to See What's on Menu Upsell

Intellectual Property Multipliers Tighter Talent Definition

Simpler Training, Eval., Promotion Cost of Delivery

Cost Drivers

Less Consultative Selling Simplified Contracting Cost of Sales

Standard Project Management Comparable Post Mortems Engagement

Management

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COST STRUCTURE

GETTING STARTED

1. How do you minimize? Use of partners? Off the shelf tech/ components?

2. How do you defer against customer development milestones? 3. How do you link to revenues?

4. Which are fixed vs. variable? How do they related to revenues?

EXAMPLES

‘fixed cost product development’ ‘fixed cost infrastructure investment’ ‘variable cost marketing or commissions’

‘variable cost customer onboarding and support’ ‘variable cost inputs’

(3 min)

Cost

Structure

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EXERCISE: COST STRUCTURE & LINKAGES

(3 min)

Cost_1 Cost_2 Cost_3 Partner_1 Partner_2 Partner_3 Activity_1 Activity_2 Activity_3 Resource_1 Resource_2 Resource_3 Revenue_1 Revenue_2 Revenue_3 Relationship_1 Relationship_2 Relationship_3 Channel_1 Channel_2 Channel_3 Proposition_1 Proposition_2 Proposition_3 Persona_1 Persona_2 Persona_3

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As

Presenter

As

Audience

INFRASTRUCTURE

1) What’s your business type (infrastructure, scope, product)?

2) What are the major cost drivers and linkages? How do they tie to revenue? 3) How do the key activities, resources, and partnerships help that?

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AGENDA

Period! Deliverables!

Venture Design I: Achieving Customer Relevance

Personas

Problem Scenarios-Alternatives-Value Propositions Start Business Model Canvas

Storyboards

Customer Discovery Venture Design II: Iterating to

Success

Venture Planning- focal hypotheses, experiments, and minimum viable ‘product’

Venture Design III: Focusing & Validating Venture Progress

Review of field work, refinements of approach, planning next steps.

Venture Design IV: Engineering Your Business Model!

Detailing your business model and remaining focal assumptions.

Venture Design V: Designing the Right Product!

Pairing your learnings on personas & hypotheses with high quality, actionable inputs (stories & wireframes) for product development and product validation.

(81)

RECOMMENDED NEXT STEPS

Follow-On Workshops

1. For Creating Strong Personas

Day in the Life Workshop: http://bit.ly/daynthelife

2. For Structuring Your Product Value Propositions into Testable Assumptions

Venture Design II: Iterating to Success: http://bit.ly/vdesignII

3. For Designing a Profitable Business Model

Venture Design IV: Engineering Your Business Model: http://bit.ly/vdesignIV

4. For Linking the Above to an Effective Product Development Program

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