Business ideas and business models
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STARTUP ENTREPENEURSHIP AND VENTURE CAPITAL Ville Simola M.Sc (Econ.)
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Slides from my lecture I hosted in October 2012 for students studying entrepreneurship in University of Ekaterinburg, Russia.
Transcript of Business ideas and business models
STARTUP ENTREPENEURSHIP AND
VENTURE CAPITALVille SimolaM.Sc (Econ.)
About me
BUSINESS IDEAS AND BUSINESS MODELS
What is a startup?
Definition #1
“A startup company or startup is a company with a limited operating history. These companies, generally newly created, are in a phase of development and research for markets. “- Wikipedia
Definition #2
“A startup is NOT every new business venture (actually, it is but this is not the way we use the
term anymore). It is a new tech venture, internet related mostly, that has the potential of rapid growth through servicing new market segments and/or offering new product/services”- Quote taken from Quora.com
Definition #3
”A startup is the organization used to search for a scalable business model” – Steve Blank
How startups are different than
traditional businesses?
Comparison #1(Steve Blank)
Small businesses
• Business model found• Profitable business• Existing team• Not all the businesses
of internet age are ”scalable startups”
Scalable startup
• Designed to grow big• Huge uncertainty• Typically needs risk
capital• These companies are
the real startups
Comparison #2(Steve Blank)
Traditional accounting
• Balance sheet• Cash flow statement• Income statement
Startup metrics
• Customer acquisition costs
• Customer lifetime value• Monthly burn rate
Comparison #3(Steve Blank)
Business plan
• Static-document• ”No business plan
survises the first customer contact”
• Focus on planning not execution
Business model
• Can be iterated quickly• Shows how company
creates, delivers and captures value
• Focus on execution and how to make money
How to find a business idea?
Idea #1
Start solving a real problem
Idea #2
Problems can be found from everyday life, from hobbies or from work life
Idea #3
After finding the idea – sleep day or two to realize whether it’s really a good one
Facts about business ideas
Idea fact #1
Importance is usually overemphasized
Idea fact #2
Will pivot during the journey
Idea fact #3
Is something that should not be hidden
Facts about the founding team
Team #1
Is the most important asset you have
Team #2
Should combine a different skillset
Team #3
Needs to have high and passionate vision
What is a business model?
Business model #1
Might sound like a new concept but is actually not
Business model #2
Describes how organization creates, delivers and captures value
Business model #3
Business model is not just about how do you make money
Examples of business models
Business model example #1
Direct sales model: marketing and selling products to a customer directly
Business model example #2
Freemium model: Giving the basic version for free but charging for premium version
Business model example #3
Subscription model: selling periodic use or access to a product or a service
Business model example #4
Razorblade model: Item is sold cheap to increase sales of a complementary product
Business model canvas
Business model canvas: FIFA Soccer World Cup
Example
What it takes be a successful
entrepeneur?
Success #1
Technology is nice but it’s all about the value
Success #2
Planning is good but execution wins the war
Success #3
Great companies are not born they are built
Recommended readings
Recommended links
springwise.comsteveblank.combusinessmodelcreation.comleancanvas.comarcticstartup.com
