BUSINESS MODEL CANVAS · The Business Model Canvas, first developed by Alexander Osterwalder, is a...

The Sanitation Technology Platform

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BUSINESS MODEL CANVASFramework for Planning

NOVEMBER 2015

Introductions to the Business Model Canvas

Integrated Inputs

Detangling Uncertainty

Questions to be Asked & Answered

Tools and Approaches

TABLE OF CONTENTS

BACKGROUND

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The Business Model Canvas, first developed by Alexander Osterwalder, is a modern take on the traditional business plan. The Business Model Canvas and its many adaptations are now recognized as leading strategic management and lean startup templates for developing new or documenting existing business models. Presented as a visual chart, the BMC describes core elements of a firm's or product's value proposition, infrastructure, customers, and finances. It helps firms align their activities by raising key questions within a specific sequence, while illustrating potential opportunities and trade-offs.

STeP has adapted the tool to support innovations in sanitation, as well as identified critical externalities that will influence the development and launch of new technologies and enterprises. We are supporting partners by answering critical path questions framed by the BMC, as well as helping them adapt and implement the tool within their own organizations.

Adapted from Osterwalder & Pigneur, Business Model Generation (2010).

The Business Model Canvas provides a modern take on the business plan, guiding and sequencing key activities.

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The model can serve as a platform and common language from which to structure our efforts, teeing up the relative importance and sequence of key activities.

INTRODUCTION - BUSINESS MODEL CANVAS


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Assessment and integration of external impacts complement business model questions.

INTRODUCTION - BUSINESS MODEL CANVAS


Trends

Macro-economics

MarketForces

IndustryForces

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Using an iterative process that combines product development with market and ecosystem development will bring deeper insights and lesson risk.

INTEGRATING INPUTS

Product Development

Market

Ecosystem

– Segments– Perceptions– Value proposition– Channel– Willingness to pay

– Function– Features– Testing

Outcomes• Product offering that aligns with

the user and contextual needs.

• Clear value proposition with requirements and specs.

• Clarity around steps required for scale-up phase.

– Partners– Suppliers– Government– Regulation & policy

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Our efforts to better understand the business model with careful study and experimentation will help move us from uncertainty into clarity and focus.

DETANGLING UNCERTAINTY

Source: http://attitudinalchange.blogspot.com/2013/02/innovative-ideas-week-4.html

http://attitudinalchange.blogspot.com/2013/02/innovative-ideas-week-4.html

“The missing ingredient in failed launches is integrating basic marketing principles like positioning, branding, and messaging into

an iterative research process. Too often, in the research phase, the focus is solely on a product’s features and functionality.”

- Phil CorseKellogg School of Management

HBR, June 2011

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Starting exploration with the customer-facing elements will inform segments and value proposition.

CUSTOMERS COME FIRST


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Follow on exploration should include operations-facing elements to better understand partners and cost drivers.

OPERATIONS, COST, PARTNERS, COME NEXT



Integrated Inputs




TABLE OF CONTENTS

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Value Proposition

What need does your product

address?

DISSECTION - BUSINESS MODEL CANVAS

Do you fully understand the product/service VP from the point of view of your user?

What problem/need is your offering meeting for users?

What bundles of products and services are you offering to each segment?

Why will your customer use it?

How will your customers use it?

How does your product differ from existing products/competitors?

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Customer Segment


Who needs your value

proposition?

For whom are you creating value?

Who are your most important customers?

How large is your target segment?

Who is currently serving this segment?

Who makes the purchase decision among your segment?

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Channel

How and where will your customers buy your product?


Through which channels do your segments want to be reached?

How are you reaching them now?

How are your channels integrated?

Which ones work best?

Which ones are most cost-efficient?

How are you integrating your channel with user routines?

How frequently does customer segment interact with this channel?

How do these channels align with channels of other business lines?

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Customer Relationship

How will you interact with your

customers?


What types of relationship does each of your segments expect you to establish and maintain with them?

Which ones have you established?

How costly are they?

How will you service and maintain your offering?

How are they integrated with the rest of your business model?

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Revenue

What is the revenue model?


For what value are our customers really willing to pay?

For what do they currently pay?

How are they currently paying?

How would they prefer to pay?

How much does each revenue stream contribute to overall revenues?

Adapted from Osterwalder & Pigneur, Business Model Generation (2010).17

Following a similar process with externalities will inform aspects of market size and opportunity space.

EXPLORATION OF EXTERNAL FACTORS

Trends

Macro-economics

MarketForces

IndustryForces




Trends

• What regulatory trends might influence your market?

• What regulations and taxes might affect adoption?

• What shifts in cultural or societal values affect your business model?

• What are the key demographic trends?

• Are there shifts in spending patterns in your market?

• Are there major technology trends or potential disruptive threats?

• How are customer perceptions of technology adoption evolving?




IndustryForces

• Which products or services could serve as a replacement

• What are the switching costs?

• Who are the key players in your industry value chain?

• To what extent does your business model depend on other players?

• Which stakeholders might influence your business model?

• How influential are the stakeholders?

• How influential are government officials?

• Who are our main competitors?

• What are their competitive advantages?




MarketForces

• What are the critical issues affecting the customer landscape?

• Where is the market heading?

• What are the most important customer segments? What is their

growth potential?

• What do customers needs?

• Where is demand increasing?

• How important is brand?

• What are customers really willing to pay for?

• Where can the largest margins be achieved?




Macro-economics

• How will local market growth impact the business?

• What is the state of the capital markets and how it impact investment for expansion?

• What’s the current state for commodity inputs, particularly water?

• How hard is water to obtain? What’s the cost? How is the price changing?

• How good is the public infrastructure? Can it meet your needs?

• How would you characterize transportation, school/training quality?

• How easy is it to obtain the resources you need to execute?


Integrated Inputs




TABLE OF CONTENTS

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We start by answering early questions about user and markets through qualitative and follow with quantitative research.

QUALITATIVE RESEARCH COMES FIRST

Who• Decides to make

infrastructure investments in apartment complexes?

• Influences their decision?• Pays for infrastructure

upgrades?

What?• Pain point does this address

for each customer segment?• Do the decision makers care

about?• Do the tenants care about?• Does the government care

about?• Concerns need to be

addressed to build trust in the product?

Where?• Do decision makers find

installers?• Do decision makers find

maintenance help?• (How) do decision makers

assess/evaluate service providers?

How?• Do customers want to be

communicated with?• Do customers want to reach

you for service and/or maintenance?

How much? • Would

owners/landlords be willing to pay for the value proposition?

• Would government actors be willing to pay?

• Would tenants be willing to pay?

• What payment structures are most attractive to each customer segment?

Customer Segment

Value Proposition Channel

CustomerRelationship

RevenueStreams

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We start by mapping the flow of how apartment infrastructure upgrade decisions get made, executed, and maintained.

INDUSTRY FORCES

Method• Interviews• Shadowing• Activity analysis

Outcomes• Identify the key decision-maker, e.g.

customer• Understand the flow of the decision and

other stakeholders in the value chain• Identify additional perspectives that would

need to be understood/explored• Begin to point us toward customer

relationship expectations

Source: http://www.fao.org/docrep/011/i0588e/I0588E05.htm

http://www.fao.org/docrep/011/i0588e/I0588E05.htm

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With the customer identified, we would complete an analysis to form an initial hypothesis about the customer segment.

EMPATHY MAPS

Method• Interviews• Shadowing

Outcomes• Gain deeper insight into the decision-maker, i.e.

customer. • Better understand how they perceive sanitation • What they think and feel; what worries them?• What they see in their environment and what the

market currently offers them?• What they say and do; what are their attitudes

and behaviors?• What do they hear from influencers and others?• What are their fears, frustrations, and obstacles?• What are their wants, needs, measures of

success?

Think + Feel?(Cognitive)

See?(Physical)

Hear?(Social, Cultural)

Say & Do?(Behavioral)

Pain Gain

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And, develop an influencer map to understand how the customer receives information.

INFLUENCER MAPS

Method• Interviews• Shadowing• Social network mapping

Outcomes• Who interacts with the decision-maker? • What are the characteristics of the relationships

they have? • What type of influence do they have? • How is each interaction viewed by the decision-

maker? • How is sanitation viewed by each influencer?• What might be a sales channel?

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While this product is clearly unique, we will seek to identify an analogue which could provide additional insights into adoption and business model.

ANALOGS

Method• Interviews• Observations

Outcomes• Identify analogue products that could provide

information about installation, maintenance, distribution and sales channel, etc.

• Understand how decisions are made to install these analogues

Installation

• How?

• Barriers?

• Payment structure?

Service + Maintenance

• Who?

• How?

• Payment structure?

Payer v. beneficiary

• Who?

• Why?

Source: www.tradeindia.com

http://www.tradeindia.com/

CONTACTS

Jamie Jones, [email protected]

Brandy Salmon, [email protected]

mailto:[email protected]

mailto:[email protected]

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