Innovation Management &

Entrepreneurship
Business
Modeling
Goal of the session
• Learning the basics of Business modelling

• Preparation and testing a Business Model

• Business modeling tools

From Idea to Business

IDEA Business
Plan| Execute| Improve
START with WHY
Understand, Explain, Show - Simon Sinek

• WHY = The purpose

• HOW = The process

• WHAT = The result

Try to Inspire!
Make decisions that are in line with your WHY. The Golden Circle
Importance of the idea

The quality of the idea is important, but...

Development & external factors have huge effects

Measure your ideas quality, explore and pick the best

? Don‘t underestimate variance and uncertainty

Business Model Canvas
• Describe, design, visualise, test and pivot
YOUR Business Model

• Describe how your company

• Creates value
• Delivers value
• Is doing financially

• Easy to discuss your business model with

others TIP: Keep using it
• A shared understanding of your business
continuously!
 What is
Business Model Canvas
the
value u
offer?

Reduction of risk
How do you
Business Model Canvas
create this
value?

Reduction of risk
Business Model Canvas How do you sell
and deliver this
value?

Reduction of risk
 Business Model Canvas

Reduction of risk
Finance: what about the costs and
revenues?
Problem
Which and whoms problem are we
solving?

• Who are your stakeholders?

Reduction of risk
• Which activities do these stakeholders
perform?

• What is their pain and what is to gain?

Customer segments
Define the different groups of
people or organisations you aim to
reach and serve

• Who are the target customers?

Reduction of risk
• For whom are they creating value?

• Who are your most important

customers?
Value Proposition
Describes the products or services
that create value for your customer

• Why whould a customer choose your

Reduction of risk
company?

• What customer problem or need do

you solve?

• Which products or services are

offered?
Solution
What’s the answer to your
customers problems that you’re
going to offer them?

• Does your solution really takes away

Reduction of risk
the problems of your customer
segments?

• Testing & refining

• Tip: Get out there! Talk to your

customers!
Key Metrics
Most important numbers that tell
how your business is running

• What are the most important

measurable aspects of your business?

Reduction of risk
Value Proposition Canvas
Value Proposition Canvas
(Potential) customers as
sources of opportunities
Opportunites
Explore & Nurture Test & Select Invest & Grow

1
Explore & Nurture
Develop various
ideas, remain flexible
and nurture them to a
certain degree.

2 Test & Select

Test the developed ideas
in various scenarios then
select the most
promising.

3 Invest & Grow

Go all in on the
selected idea, invest in
it and continuously
grow it.
Filter

Work with (potential) customers to…

- Identify new products or features
- Speed up the idea generation and validation process

Small investments into different opportunities to…

- Explore different ideas
- Remain flexible

Delay commitment as long as possible to…

- take into account further information/feedback
!
Customer segments
Know WHO your customers are.

What are the buying motives?

Reduction of risk
What are your Unique Selling Points?

Use feedback to create a fit!

Channels
Determine how to reach your
customers to deliver the value

• How does your company reach

customers?

Reduction of risk
• Which communication, distribution
and sales channels are used?

• How would customers want to be

reached?
Unfair advantage
What is your unfair advantage?

• Can’t be copied of bought

• People within your business

Reduction of risk
• Network

• IP / Patents
Revenue structure
How does the company generates
revenues?

• Revenue is generated by selling your products or services or

from other activities.

Reduction of risk
• For what are the customers willing to
pay?

• For what are the customers currently

paying?

• How do customers prefer to pay?

Revenue model
How do you make money?

How do you turn value into revenue?

What revenue model fits you?

• Company situation
• Market
• Competition
• Market- and customer insights
• Common sense
Revenue Model
What revenue models are there?
• Sale • Bait
• Rent • Freemium
• License • Cross selling
• Broker • Advertising
• Subscription • Data
• Membership • Crowdfunding
• Pay-per-use • Service
Revenue Model
New Revenue models Think out of the Box!
• Borrow Pay-as-you-stay:
• Share “Everything is free inside; expect for
• Trade the time you spend” .
• Co-create
• Re-use
Cost structure
The most important costs inherent
in your Business Model.

• Fixed and variable costs in relation to

your product / service

Reduction of risk
• Remember you are a startup, this can
and will change rapidly!
Summary
- Explore more than one opportunity but focus eventually
- Reduce uncertainty
- Create value through innovation and by matching a need
- Use customers as sources and for validation of ideas
- More than just the idea is important
- Match idea against criteria to select
- Create and test multiple BMC‘s
- Start with WHY?
- Information + Data are key! – Figure what to do or how to act!
End of lecture
Value Proposition Canvas
Value Proposition Canvas

Write down the value proposition for

your product / service (5 mins)