Business Model

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Business Models A platform for analyzing existing business models and imagining new ones

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Hi, I’m Digit

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I’m here to talk to you about. . .

Business Models

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This presentation is about using a common platform to describe business models.

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Let’s start with. . .

“What is a business model?”

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A business model describes how an entity organizes itself to create value and derive revenue.

Alex Osterwalder PhD

You can learn more at his website:

http://www.businessmodelgeneration.com/



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By using a common platform to describe our business models we can . . .

. . . have a common language to describe where we are going.

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. . . all understand how the work we do fits together to form the whole.By using a

common platform to describe our business models we can . . .

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. . . imagine new capabilities to add to our organization to see how they would fit.


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. . . ask questions about why we do things the way we do, and see the impacts everywhere.


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. . . evaluate the risk of changing our business structures.

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. . . use it to imagine new business models that would create new value and new revenue streams


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Okay, we're convinced.

A common platform to describe business models would be great.

But what is this platform?

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Could you hurry up?

These are heavy.

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Who - Customers

The business model platform starts with customers.

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What - Offer

Customers

Next comes the offer made to customers.

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OfferHow - Organization Customers

Followed by the organization, the entity that makes the offer possible

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Why - Economics

OfferOrganization Customers

Finally, the economics, the costs and revenues associated with it all.

That’s it, only 4 categories?

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Economics


There’s more.

Nine building blocks define the key relationships between these four areas.

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CustomerSegments

Economics


First, what are the customer segments your business model serves?

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CustomerSegmentsCustomerSegments

Economics


Second, what is the offer you have for each segment?

Value Propositio

n

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Economics


Third, what characterizes the relationship with the customer?

Value Propositio

n

Relationship

Management

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Economics


Four, how will you distribute your offer to this customer type?

Value Propositio

n

Relationship

Management

Distribution

Channels

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Economics


Five, how will you charge for this offer?

Value Propositio

n

Relationship

Management

Distribution

Channels

RevenueFlows

Cool! That’s how our value generates revenue

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Economics


Six, what key activities do you perform to deliver this offer?

Value Propositio

n

Relationship

Management

Distribution

Channels

RevenueFlows

KeyActivities

That’s us and our work.

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Economics


Seven, what activities will you give to partners to perform as they can do it better than you?

Value Propositio

n

Relationship

Management

Distribution

Channels

RevenueFlows

KeyActivities

PartnerNetwork

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Economics


Eight, what resources do you need to perform the activities?

Value Propositio

n

Relationship

Management

Distribution

Channels

RevenueFlows

KeyActivities

PartnerNetwork

KeyResources

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Economics


Finally, how do your resources and partners drive costs?

Value Propositio

n

Relationship

Management

Distribution

Channels

RevenueFlows

KeyActivities

PartnerNetwork

KeyResources

CostStructure

Great. Can you show us an example?

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Sure, but before we talk about that, take a moment to review the business model platform.

Business Model Canvas © Alex Osterwalder

9 Building Blocks Define Your Business Model

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Do you know Skype?


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They started by targeting travelers and small business owners.


• Travelers• Small

Business

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Business

• Free calls• Reasonable

Quality• Conference

calls• Video calls• Cheap calls to

phones (Skype out)

With an offer for free calls, free video conference and cheap calls to phones.


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Business

• Web

• Automated web relationship

• Software download set-up




phones (Skype out)

The relationship was, and remains automatic, with distribution through the web.


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Business

• Web

• Skype Out• Ancillary

Products

• Free






phones (Skype out)

Revenues come from Skype-out calls and ancillary products. Most calls are free.


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Business

• Web


Products

• Free

• Software Development

• Complaint Management






phones (Skype out)

Key activities are software development and complaint management.


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Business

• Web


Products

• Free





• Country Telcos

• Payment Providers

• Logitech




phones (Skype out)

They partner with Telcos, payment and product providers.


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Business

• Web


Products

• Free



• Software Developers

• Software



• Country Telcos


• Logitech




phones (Skype out)

Unlike Telcos with $billions invested in infrastructure, Skype’s key resources aredevelopers and the software.


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As a software company their costs are limited to software development and complaint management.


Business

• Web


Products

• Free



• Software Developers

• Software






• Country Telcos


• Logitech




phones (Skype out)

• Partner Fees

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See how easy it is to describe how a company works?


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Just for fun Skype recently released their numbers for 2008.• 340 million registered

users• 100 billion free calls• $550 million revenue• They’ve become the

largest provider of cross-border voice communications in the world.

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So, that’s what business models are all about.

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Imagine if everyone in your organization had a common understanding of your business model?

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What value could you unlock?

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If you’d like more info.

Call us and ask for John.

Tell him Digit sent you.

Ennova Inc.Toronto, Ontario1-888- 6ennova905-294-8050 (local)John @ennova.ca

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Hey Digit, can you give me a hand with this?

Business Model

Business

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