1. Business Modeling for Startups AIFB Seminar: Developing Business Modelsfor the Semantic Web (WS 12/13, KIT)Julius Parrisius, Center fr Innovation & Entrepreneurship 30.10.2012

2. The story What is a Design andConnection How doesBusiness ModelTesting ofbetween Business Modeland how does BusinessDesign andand Businessit relate to Models. Testing. Plan fit startups?together? 3. The story What is a Design andConnection How doesBusiness ModelTesting ofbetween Business Modeland how does BusinessDesign andand Businessit relate to Models. Testing. Plan fit startups?together? 4. Def.:A business model describes the rationaleof how an organization creates, delivers,and captures value.Business Model Generation, A. Osterwalder, Yves Pigneur, AlanSmith, and 470 practitioners from 45 countries, self published, 2010 5. Def.:Or in English: A business model describeshow your company makes money.Whats a startup? First Principles, Steve Blank, Blog article,www.steveblank.com (Retrieved Oct 26, 2012) 6. An ad-based freemium-model.AdvertiserMoneyLead to music fansFree music service Music-fan (free) Subscription fee $9.99/month Music-fanAd-free premium music(premium)serviceSo far 15mio users are signed up, 4mio of them aspaying customers (at: 08/2012). 7. A one-sided Match-making plattform. Match-making service Visitor Room to rentMoneyMatch-making serviceRenterCommunity 6-12 % commissionMore than 200.000 offers in more than 26.000 cities(192 countries) and over 1mio users (at: 07/2012). 8. A marketplace for fund seekers. Large micro-funding Small micro-funding exposure exposuremember member Fund seeker Crowd of backers 5 % GebhrSmall reward Large reward74.000 projects (success rate of 44%) have beenfunded with roughly $381mio (at: 10/2012). 9. Def.:A startup is a human institution designedto create a new product or serviceunder conditions of extreme uncertainty.The lean startup, Eric Ries, Crown Business, 2011 10. Def.:[] a startup is an organization formedto search for a repeatable and scalablebusiness model.Teaching Entrepreneurship By Getting Out of the Building, Steve Blank, Blog article, www.steveblank.com (Retrieved Oct 26, 2012) 11. business model kevin dooley, Flickr.com 12. The story What is a Design andConnection How doesBusiness ModelTesting ofbetween Business Modeland how does BusinessDesign andand Businessit relate to Models. Testing. Plan fit startups?together? 13. Design Testing 14. Design 15. [] building a product is NOTthe product of your startup.Your business model is the product. Running Lean (2nd edition), Ash Maurya, OReilly, 2012 16. What Value are we delivering? 17. Which Customer are we serving? 18. Value Customer 19. Why is this so important?Life is too short to build somethingnobody wants. Running Lean (2nd edition), Ash Maurya, OReilly, 2012 20. Customer focus should be on theearly adopters in the beginning.Technology adoption lifecycle(Everett Rogers bell curve) Early adopters Early majority Refined with the Chasm (Crossing the Chasm, Geoffrey Moore, Harper, 1991) 21. Alex Osterwalder, Flickr.com 22. Goal: Product-Market FitWhich Jobs is my customertrying to get done?(functional, social, emotional, basic )What are her Pains?(emotions, costs, situations, risik )What Gains is she hoping for?(functional, social, emotional, costs ) All graphics Alex Osterwalder, Flickr.com 23. What products/services is theVP built around?(in-/tangible, digital/virtual, financial )How are they pain relievers?(emotions, costs, situations, risks )How are they producing Gains?(functional, social, emotional, costs )All graphics Alex Osterwalder, Flickr.com 24. You are not alone. Luix90, Flickr.com 25. Blue OceanRed OceanBlue Ocen Strategy, Kim and Mauborgne, Harvard Business School Press, 2005 26. The Strategy Canvas Kim and Mauborgne, 2012, www.blueoceanstrategy.com 27. Hows does my VP measure up against competing VPs?Can I fill the open slot? Alex Osterwalder, Flickr.com 28. Avg. Income:$12.50/hr A search saves the Savings:user 6min (avg).$1.25/searchCreating valueat $1.25/search Google createsGoogle in U.S.:$1.5bln value/day 1.2bln searches/dayin U.S.Creating valueat $1.25/searchCost for Google: Cost to customer0.2 cents/search value ratio: 625!!! [..] a stunning value proposition by any measure. IT-Driven Business Models, Kagermann et al., John Wiley & Sons, 2011 29. Design Testing 30. Testing 31. Get out of the building!Steve Blank has preached this for over adecade wherever and whenever he could. iagoarchangel, Flickr.com 32. The old way The Four Steps to the Epiphany, Steve Blank, printed by Lulu.com, 2006, p. 2. 33. The new way Lean Startups Arent Cheap Startups, Steve Blank, Blog article, http://venturebeat.com/2009/11/03/lean-startups- arent-cheap-startups/ , (Retrieved Oct 26, 2012) 34. Customer Development Steve Blanks Customer Development by Brant Cooper, www.custdev.com (Retrieved Oct 26, 2012) 35. Validated LearningA scientific method to build your business. 3 11. 3.In your mind:1. What do I want to test?2. How can I measure it?3. What do I 2. 2 have to build? Eric Ries, The Lean Startup, 2011 36. Brintam, Flickr.comThe goal is tominimize the total time through the loop. 37. The story What is a Design andConnection How doesBusiness ModelTesting ofbetween Business Modeland how does BusinessDesign andand Businessit relate to Models. Testing. Plan fit startups?together? 38. Where is the connection?Design Testing 39. Alex Osterwalder, Flickr.com 40. Alex Osterwalder, Flickr.comMake sure to build stuff people want. 41. Alex Osterwalder, Flickr.comBuild a viable business. 42. The story What is a Design andConnection How doesBusiness ModelTesting ofbetween Business Modeland how does BusinessDesign andand Businessit relate to Models. Testing. Plan fit startups?together? 43. How do they fit together?Business PlanModel 44. Quote:A good plan violently executed now isbetter than a perfect plan executednext week.US Army General George S. Patton 45. A famous Silicon Valley mantra:Better done than perfect.Reported by PionierGarage after their Silicon Valley Tour, 2011. 46. Sharon Drummond, Flickr.comA study recently released by Babson College analyzed 116businesses started by alumni [and] found no statistical difference insuccess between those businesses started with formal written plansand those without them...Enterprise: Do Start-Ups Really Need Formal Business Plans, Wall Street Journal, 1/9/07 47. Planning is ok, but we dont know thefuture, so it has to be appropriate.high highBusinessPlan Waste WasteUSE OF USE OFRESOURCESRESOURCESIrresponsible Business Model Irresponsible Planninglow Planning lowlowRISK high lowRISKhighBoth graphics: Julius Parrsius 48. Today many resources are free or cheap=> we can run experiments.Time is the only resource that will alwaysbe limited => we have to fail fast.Fail fast concept applied from: Fail Fast, Jim Shore, IEEE ComputerSociety, 2004, www.martinfowler.com/ieeeSoftware/failFast.pdf 49. Why is the Business Model Canvas great?fast.concise.portable.Running Lean (2nd edition), Ash Maurya, OReilly, 2012 50. The business modell canvasis a first step towards acomplete business plan. Thomas Leth-Olsen, Flickr.com 51. A business plan isnecessary in theright stage. Karthick R., Flickr.comIt should be seen as a conversation withstakeholders (employees, partners, investors ). 52. Inhalte eines Business PlansCover Page and Table of ContentsExecutive SummaryBusiness DescriptionBusiness Environment AnalysisIndustry BackgroundCompetitive AnalysisMarket AnalysisMarketing PlanOperations PlanManagement TeamFinancial PlanAttachments and Milestones 53. Operations PlanMarket AnalysisBusiness Description Marketing PlanFinancial Plan 54. Perfect your pitch, then write your plan.Use the business-plan exercise as a way to get your team on thesame page.Keep it short: ten to twenty pages.Spend no more than two weeks writing it.Dont get obsessed with details in your financial forecast because itshould be one page long.Is a business plan necessary, Guy Kawasaki (Silicon Valley VC, bestsellingauthor), blog article, blog.guykawasaki.com (Retrieved Oct 27, 2012) 55. Thank you!Julius ParrisiusStartup Manager, Center fr Innovation & EntrepreneurshipE-Mail: parrisius@cie-kit.de