dream viability testing: quickly and cheaply test the viability of your dream business ideas

THE 3-‐ACT BUSINESS MODEL STORYBOARD A Visual Toolkit for Quickly and Cheaply Tes8ng Whether Your Business Idea is Viable

Dr. Rod King

The Core Job-‐To-‐Get-‐Done of

A Business Startup Is

To Efficiently Discover and Launch

A Scalable Profit Model

“Profit is the Oxygen of a Business”

How Can We

Quickly and Inexpensively Test The Viability (Profitability) of

A Business Idea?

Never Start a Project Using

The TradiVonal Business Plan, Lean Startup Method,

and Customer Development Stack

To Test The Viability (Profitability) of

A Business Idea

WHAT DO THE FOLLOWING APPROACHES HAVE IN COMMON: Tradi'onal Business Plan, Lean Startup Method, and Customer Development Stack?

q  The approaches of the tradi8onal business plan, Lean Startup method, and Customer Development Stack are 8me-‐consuming and expensive for tes8ng the profitability of dream business ideas

q  “Profit Model” is not the unit of analysis or unit of learning in the approaches of the tradi8onal business plan, Lean Startup method, and Customer Development Stack

q  The approaches of the tradi8onal business plan, Lean Startup method, and Customer Development Stack ini8ally ignore profitability: they do NOT begin with the end in mind, that is, with profitability or analogs/an8logs of a sustainable profit model. The approaches take a worm’s eye view of a project

q  Each approach is wasteful: it spends a lot of 8me/money in implicitly defining a profit model and does not make use of archetypal profit models as well as proven profitable paXerns for business models

q  Rela8vely lot of 8me/money is spent to find out what a profitable model looks like when using the tradi8onal business plan, Lean Startup, and Customer Development Stack

q  Many vague, weak, or non-‐quan8ta8ve hypotheses are generated when using the tradi8onal business plan, Lean Startup, and Customer Development Stack so that hypothesis tes8ng is haphazard

q  The approaches do not feature a Revenue Lifecycle Profile for a Product/Service so that it is not clear when and how the product/business intends to generate revenue

q  The methodologies of the tradi8onal business plan, Lean Startup, and Customer Development Stack are weakly integrated with the body of knowledge in Strategic Management, Innova8on, and Project Management. These methodologies cannot adequately model or explain factual business success or failure

#VPGen. Dr. Rod King. [email protected] & hap://businessmodels.ning.com & hap://twiaer.com/RodKuhnKing

Disrup'on Spot

Luxury Spot

Strategic Choice

TradiVonal Business Plan

Business Model Canvas/Customer Development

Stack

q 3-‐Act Business Model

q Discovery-‐Driven Growth (DDG)

Strategic Management/ Strategic Plan/

Balanced Scorecard

Lean Startup Method/ Lean Canvas

OVERVIEW OF TOOLS FOR DREAM VIABILITY TESTING (DVT) Trade-‐off Map of Cost vs. Effec'veness

(-‐): PAIN: Time (Cost; Risk)

(+): DELIGHT: Effec8veness

Key Profitable Tool Unprofitable Tool

#VPGen. Dr. Rod King. [email protected] & hXp://businessmodels.ning.com & hXp://twiXer.com/RodKuhnKing

Market Segment (Job-‐To-‐Get-‐Done/Goal; Product/Tool): Test Viability of Business Idea (Project/Business Model)

“Insane” Happiness (Value) Ideal Final Result (IFR) Infinite Shared Happiness “Invisible Hand”

The 3-‐Act Business Model Storyboard Eliminate the Complexity and Waste of

The Tradi8onal Business Plan, Lean Startup Method, and Customer Development Stack

3 STEPS FOR THE 3-‐ACT BUSINESS MODEL STORYBOARD Quick and Inexpensive Heuris'c for Pregnant Idea Tes'ng and Execu'on

q  First, Visualize the Desired Profitability of Your Business Model. q  Then, Analyze, Design, and Test Your Value ProposiVon Model.

q  Finally, Launch and Manage Story of a Scalable Value CreaVon Model.



Start with the End In Mind

Past Reality

Present Reality

Future Reality


WHY pivot?

3-‐Act Business Model (3BM) Plan

Why Pivot?

Past Reality

Present Reality

Future Reality


4 Pivot Ques'ons


Strategy

Short/Medium/Long-‐term

WHAT to pivot? TO WHAT to pivot?

WHY pivot?

HOW to pivot?

ENVIRONMENT #VPGen. Dr. Rod King. [email protected] & hap://businessmodels.ning.com & hap://twiaer.com/RodKuhnKing

3-‐Act Business Model

Create Value Deliver Value Share (Capture) Value

Bird’s Eye View

CORE JOBS:

HOW? WHAT? WHY?

VALUE CREATION MODEL

VALUE PROPOSITION

MODEL

VALUE SHARING (PROFIT) MODEL

Innovator’s Perspec8ve

Marketer’s Perspec8ve

Investor’s Perspec8ve



VALUE PROPOSITION MODEL

PROFIT MODEL

ENVIRONMENT

3-‐ACT BUSINESS MODEL

3-‐ACT BUSINESS MODEL STORYBOARD

First, Visualize the Desired Profitability of Your Business Model

Bird’s Eye View




PROFIT MODEL


First, Visualize the Desired Profitability of Your Business Model W: W

EAKN

ESSES (-‐)

S: STR

ENGTH

S (+)

O: OPPORTUNITIES (+)

T: THREATS (-‐)

(Value & SWOT Analysis)





PROFIT MODEL


First, Visualize the Desired Profitability of Your Business Model (“E.R.I.C.” Value Innova'on Tac'cs)

E: Elim

inate

I: In

crease

C: Create

R: Reduce





Inputs/Partners

Internal Resources

Processes/AcVviVes

Product/Value ProposiVon

Channels & RelaVonships

Customer/Job-‐To-‐Get-‐Done

Cost: (Structure/Metrics)

Revenue: (Streams/Metrics)

PROFIT


PROFIT MODEL

Dream Viability Tes8ng (DVT): First, Visualize the Desired Profitability of Your Business Model

Worm’s Eye View (Each sub-‐model consists of 3 panels)

Disrup'on Spot

Luxury Spot

Strategic Choice

Samson Strategy

Delilah Strategy

Goliath Strategy

David Strategy

4 GENERIC WINNING STRATEGIES AND VALUE PROPOSITIONS

Trade-‐off Map of Weakness vs. Strength

(-‐): PAIN: Weakness (e.g., Size)

(+): DELIGHT: Strength

Key Winning Strategy Losing Strategy


Market Segment (Job-‐To-‐Get-‐Done/Goal; Product/Tool): ………………..…..……..…….………… ……………………………………………………………………….…………….………….……………….


Disrup'on Spot

Luxury Spot

Strategic Choice

Sweet Spot Profit Model/ Strategy/

Value Proposi'on

Blue Ocean Profit Model/ Strategy/

Value Proposi'on

Luxury Spot (“Differen'a'on”) Profit Model/ Strategy/

Value Proposi'on

DisrupVon Spot/Lean (“Low Cost”) Profit Model/ Strategy/

Value Proposi'on

4 GENERIC PROFIT MODELS, WINNING STRATEGIES, AND VALUE PROPOSITIONS

Trade-‐off Map of Cost vs. Revenue

(-‐): PAIN: Cost

(+): DELIGHT: Revenue

Key Profitable Model Unprofitable Model


Market Segment (Job-‐To-‐Get-‐Done/Goal; Product/Tool): ………………..…..……..…….………… ……………………………………………………………………….…………….………….……………….


Disrup'on Spot

Luxury Spot

Strategic Choice

Sweet Spot Customer Experience

Blue Ocean Customer Experience

Luxury Spot Customer Experience

DisrupVon Spot/Lean Customer Experience

CUSTOMER EXPERIENCE, VALUE PROPOSITION, JOB-‐TO-‐GET-‐DONE, AND (VALUE) FACTORS Trade-‐off Map of Customer Pain vs. Customer Delight

(-‐): PAIN: Cost; Size; Complexity; Inaccessibility; Delay

(+): DELIGHT:

Func'onality; Performance;

Quality; Brand;

Customiza'on

Key Valuable Experience Non-‐valuable Experience


Market Segment (Job-‐To-‐Get-‐Done/Goal; Product/Tool): Entertainment Industry (Music): Listen to music


AGRICULTURE & MINING Industry SERVICE Industry

INFRASTRUCTURE/PLATFORM Management

MANUFACTURING Industry

PROFIT MODELS: STRATEGIES, TACTICS, AND PATTERNS How Businesses Really Make Money and Win Business Model Compe88ons in the Imita8on Economy


q Asset Sale

q Long Tail q Open Source Collabora'on q Dona'on q So`ware as a Service

q Two-‐sided Market

q Asset Sale

q Razor Blade (Bait & Switch)

q Subscrip'on Fee

q Crowdsourcing

q Lending/Ren'ng/Leasing

q Licensing

q Licensing

q Brokerage

q Usage Fee

q Asset Sale

q Adver'sing q Co-‐crea'on

q Usage Fee

q Mul'-‐sided Market Placorm

q Ad Network

q Outsourcing

q Ecosystem Management

q Direct Sale q  Indirect Sale

q Offline

q Online

q Discount

q Tiered Payment

q Auc'on

q Facilitated Network

q Brand Mul'plier

q Reverse Auc'on

q Customiza'on

q Cross-‐subsidiza'on q Franchise

q Product Leadership

q Automa'on (Self-‐service)

q Gamifica'on

q B2C q B2B

q Pre-‐Payment

q Fair Pricing

q Community (Hub)

q On Demand

q DIY

q Unbundling q Unbundling q Bundling q Free

GENERIC PROFIT MODELS

q P2P Placorm

q Landlord

q Leasing

q 2nd Hand

q  Luxury Spot (Differen'a'on)

q  Disrup'on Spot (Low Cost; Lean)

q  Blue Ocean (Value Innova'on)

q Creator

q Distributor q Broker

q  Sweet Spot

q Product Extension

q Opera'onal Excellence

q Frac'onaliza'on q Customer In'macy q Affiliates

What industry is the business (or customer) in? Who is the customer-‐protagonist (most dissa'sfied)? What is the customer Job-‐To-‐Get-‐Done? What is the profit model of the business (customer)? What are analogs and an'logs of the profit model?

q Shared Value

Case Study on The 3-‐Act Business Model Storyboard

An'que Toy Store

How a New An8que Toy Store Owner Made

An Annual Profit of $250,000

Generate and Test

QuanVfiable Hypotheses (AssumpVons)

That Are Based On

Generic Profitable Models

Past Reality Business Profit

Present Reality Business Profit

Future Reality Business Profit

3-‐Act Business Model (3BM) Plan for AnVque Toy Store

4 Pivot Ques'ons


Strategy



WHY pivot?

HOW to pivot?




(Desired Annual Profit: $250,000)

Business Model (3-‐Act)



Industry Ecosystem

Market Ecosystem


Macro-‐Economic Influencers

Key Trends & Complementors

AnVque Toy Store’s Mission/Vision/Purpose/Ideals/ Ideal Final Result For Business Profit


Strategy Short/Medium/Long-‐term

3-‐Act Business Model (3BM) Plan for AnVque Toy Store

4 Pivot Ques'ons

Disrup'on Spot

Luxury Spot

Strategic Choice

Sweet Spot Profit Model/ Strategy/

Value Proposi'on

Blue Ocean Profit Model/ Strategy/

Value Proposi'on

Luxury Spot (“Differen'a'on”) Profit Model/ Strategy/

Value Proposi'on

DisrupVon Spot/Lean (“Low Cost”) Profit Model/ Strategy/

Value Proposi'on

4 GENERIC PROFIT MODELS, WINNING STRATEGIES, AND VALUE PROPOSITIONS FOR ANTIQUE TOY STORE Trade-‐off Map of Cost vs. Revenue

(-‐): PAIN: Cost

(+): DELIGHT: Revenue

Key Profitable Model Unprofitable Model


Market Segment (Job-‐To-‐Get-‐Done/Goal; Product/Tool): Have fun/entertainment

ü 


Disrup'on Spot

Luxury Spot

Strategic Choice

Sweet Spot Customer Experience

Blue Ocean Customer Experience

Luxury Spot Customer Experience

DisrupVon Spot/Lean Customer Experience

SCENARIOS OF CUSTOMER EXPERIENCE AND (VALUE) FACTORS FOR ANTIQUE TOY STORE Trade-‐off Map of Customer Pain vs. Customer Delight

(-‐): PAIN: Cost; Size; Complexity; Inaccessibility; Delay

(+): DELIGHT:

Func'onality; Performance;

Quality; Brand;

Customiza'on

Key Valuable Experience Non-‐valuable Experience



Market Segment (Job-‐To-‐Get-‐Done/Goal; Product/Tool): Have fun/entertainment

ENVIRONMENT #VPGen. Dr. Rod King. [email protected] & hap://businessmodels.ning.com & hap://twiaer.com/RodKuhnKing

3-‐Act Business Model for AnVque Toy Store

Bird’s Eye View

Create Value Deliver Value Share (Capture) Value CORE JOBS:

SATISFY DEMAND CREATE DEMAND GENERATE PROFIT


VALUE PROPOSITION MODEL (ARENA)


Innovator’s Perspec8ve

Marketer’s Perspec8ve

Investor’s Perspec8ve




Inputs/Partners

Internal Resources Annual Salary of 2 Employees = 2 ($8/hr x 40x52) = $33,280 Rent = $30 per sq o; 3,100 sq o Total Rent = 30x3,100 = $93,000 Inv. = 10% of Sales =$50,000

Processes/AcVviVes

Product/Value ProposiVon q “An8que” Toys: Average price per toy: $25 Annual no. of toys to be sold = Sale/Price per item = 500,000/25 = 20,000

Channels & RelaVonships Adver8sing per Sale of Toy= $3 -‐> Total Adver8sing = Annual no. of sale x Ad per sale = 10,000x3 = $30,000

Customer/Job-‐To-‐Get-‐Done q Kids (Parent/Family) who want

non-‐electronic entertainment Average no. of items per sale = 2 Annual no. of sales = 20,000/2 = 10,000 (Monthly sale = 833 toys)

Cost (Pain) Annual Allowable Cost = Sale – Profit = $500,000 -‐ $250,000 = $250,000 (incl. con8ngencies)

Revenue (Delight) Annual Return On Sale = 50% = Profit/Sale -‐> Sale (Revenue) = Profit/0.50 = 250,000/0.50 = $500,000 (Pricing: $25 per item)

PROFIT (VALUE) Desired Annual Profit = $250,000 Desired Profit Margin = 50%

3-‐ACT BUSINESS MODEL For ANTIQUE TOY STORE

PROFIT MODEL


Source of Informa8on: McGrath, R.G.; MacMillan, I.C. (2009) Discovery-‐Driven Growth. MassachuseXs: Harvard Business Press.

“Reverse Income Statement”


Inputs/Partners q Famous Railroad Museum

(nearby proposed store) q Old fashioned toys

Internal Resources q Employees/Team q Store Facility q Office Equipment/Supplies q Culture/Brand

Processes/AcVviVes q Discover q Plan q Build q Measure q Learn

Product/Value ProposiVon q “An8que” Toys: old fashioned

toys like model trains and board game

q Play with unique toys back in 'me

Channels & RelaVonships q Offline q  In-‐store Purchases

Customer/Job-‐To-‐Get-‐Done q Kids (Parent/Family) q Have fun playing with non-‐

electronic toys: unique old fashioned toys

Cost (Pain) High Cost q Salary of Employees q Rent; Inventory q Office Supplies; U8li8es q Marke8ng/Adver8sing

Revenue (Delight) High Revenue q Asset Sale •  Engagement •  Acquisi'on; Ac'va'on •  Reten'on; Referral; Revenue

PROFIT (VALUE) q High Profit Margin

Dream Viability Tes8ng (DVT): Then, Design and Test Your Value Proposi'on Model

Source of Informa8on: McGrath, R.G.; MacMillan, I.C. (2009) Discovery-‐Driven Growth. MassachuseXs: Harvard Business Press.

Business Model Resources (Hypotheses)



PROFIT MODEL





PROFIT MODEL

ENVIRONMENT

Dream Viability Tes8ng (DVT): Bird’s Eye View

W: W

EAKN

ESSES (-‐)

S: STR

ENGTH

S (+)

O: OPPORTUNITIES (+)

T: THREATS (-‐)

Value & SWOT Analysis





PROFIT MODEL

E: Elim

inate

I: In

crease

C: Create

R: Reduce

“E.R.I.C.” Value Innova'on Tac'cs






Indu

stry Ecosystem

(IE): Sup

ply

Market E

cosystem

(ME): D

eman

d

Key Trends & Complementors (KTC): PESTLIED (-‐/+)

Macro-‐Economic Influencers (MEI): Global Economy

PROFIT MODEL

4 Global Environment Forces for External Fitness Analysis






PROFIT MODEL

Bargaining Pow

er of Sup

pliers

Bargaining Pow

er of C

ustomers

Threat of New Entrants

Threat of SubsVtute Products or Services

Porter’s 5 Forces for Industry Profitability & Fitness Analysis



REVENUE LIFECYCLE PROFILE (RLP) -‐ Simplified Diagram First, Visualize the Desired Profitability of Your Business Model


TIME

REVENUE

Birth of Idea/ Prototyping/TesVng/ Product-‐Market Fit

(Agility)

T1 (Full Product Launch)

T2 (Entry of

Main Compe'tor)

T3 (Compe''veness

Erosion)

Source of Informa8on: McGrath, R.G.; MacMillan, I.C. (2009) Discovery-‐Driven Growth. MassachuseXs: Harvard Business Press. Blank, S.; Dorf, B. (2012) The Startup Owner’s Manual. California: K & S Ranch, Inc.

Stability/

Steady State/Su

stainability

(Op'miza'on/Exploita

'on)

T4 (Product

Termina'on)

Customer CreaVon Company Building Customer Development

Customer ValidaVon

COST LIFECYCLE PROFILE (CLP) – Simplified Diagram First, Visualize the Desired Profitability of Your Business Model


COST

T1 (Full Product Launch)

T2 (Entry of

Main Compe'tor)

T3 (Compe''veness

Erosion)

TIME T4 (Product

Termina'on)

Source of Informa8on: McGrath, R.G.; MacMillan, I.C. (2009) Discovery-‐Driven Growth. MassachuseXs: Harvard Business Press. Blank, S.; Dorf, B. (2012) The Startup Owner’s Manual. California: K & S Ranch, Inc.

Customer Development

Customer ValidaVon

Customer CreaVon Company Building

Birth of Idea/ Prototyping/TesVng/ Product-‐Market Fit

(Agility)

The 3-‐Act Business Model Storyboard A Quick and Inexpensive Toolkit for Tes8ng the Viability of Ideas

WHAT to pivot?

TO WHAT to pivot?

HOW to pivot?

WHY pivot?

4 Pivot QuesVons


4 PIVOT QUESTIONS FOR THE 3-‐ACT BUSINESS MODEL (3BM) PLAN Pivot Management Story for Dream Valida'on Tes'ng


3-‐ACT BUSINESS MODEL (3BM) STORYBOARD: Visual Checklist

BUSINESS MODEL BUSINESS MODEL ENVIRONMENT VALUE

CREATION MODEL


PROFIT (SHARED VALUE) MODEL

Discover (Iden'fy/Define/List/ Analyze)

Plan (Design/Hypothesize/Generate/Brainstorm)

Build (Do/Test/Prototype/ Demo/Pilot/Execute)

Measure (Check/Evaluate/ Validate Impact: Delight/Pain)

Learn (Lessons/Insights/ To Do)

THE 5 STAGES OF USING THE 3-‐ACT BUSINESS MODEL STORYBOARD Discover. Plan. Build. Measure. Learn

THE 5 STAGES OF USING THE 3-‐ACT BUSINESS MODEL STORYBOARD Discover. Plan. Build. Measure. Learn


3-‐ACT BUSINESS MODEL (3BM) STORYBOARD: Visual Checklist

BUSINESS MODEL BUSINESS MODEL ENVIRONMENT VALUE

CREATION MODEL


PROFIT (SHARED VALUE) MODEL

Discover (Iden'fy/Define/List/ Analyze)

q  Team Members q  Core

Competences/Capabili8es

q  Key Processes/ Ac8vi8es q  Internal

Resources

q Market (Study/ Research/Trends/Segmenta8on)

q  Customer Personas q  Customer Obstacles/

Job-‐To-‐Get-‐Done q  Business Vision/Goal/

Job-‐To-‐Get-‐Done

q  Targeted Profit q  Profit Margin q  Revenue (Pricing) q  Cost q  Return on Assets q  Profit Model

Strategies/Tac8cs/ PaXerns

q  Industry Classifica8on & Size q  Industry (AXrac8veness/Value)

Analysis, Trends, and Opportuni8es q  Compe8tor Analysis (Nearest

Compe8tor Offers) & Strategy q  Partners/Collaborators q  Related Communi8es q  Lifecycle Investment Plan/Sponsors

Plan (Design/Hypothesize/Generate/Brainstorm)

q  Product/Service q  Processes q  Team/Culture q  Int. Resources

q  Value Proposi8on q  Customer Obstacles/

Job-‐To-‐Get-‐Done q  Channels/Landing Page

q  Profit Margin q  Revenue (Pricing) q  Cost q  Customer Behavior

q  “Unfair” Compe88ve Advantage q  Compe88ve Strategy & Tac8cs q Marke8ng Strategy & Tac8cs

Build (Do/Test/Prototype/ Demo/Pilot/Execute)






Measure (Check/Evaluate/ Validate Impact: Delight/Pain)






Learn (Lessons/Insights/ To Do)





Inputs/Partners

Internal Resources

Processes/AcVviVes




Cost (Pain)

Revenue (Delight)

PROFIT (VALUE)

PROFIT MODEL



Worm’s Eye View (Each sub-‐model consists of 3 panels)




Inputs/Partners q What material, informa'on,

and capital are needed prior to launching product?

q What partners/alliances are needed?

Internal Resources q Who are team members? q What hard assets (equip-‐

ment/infra’) will are needed prior to launching product?

q What technology is needed?

Processes/AcVviVes q What are development

ac8vi8es that must be completed prior to launching product/service/tool?

Product/Value ProposiVon q What product/service/tool will

customer use and/or buy? q Why will customer buy product/

service/tool?

Channels & RelaVonships q How will product/service/tool

be delivered to customer? q What sort of rela8onship will

business have with customer? q How will customer be engaged,

acquired, and retained?

Customer/Job-‐To-‐Get-‐Done q What customer will use and/or

buy product/service/tool? q What job is customer trying to

get done? What are obstacles? q What is customer pain? q What is customer delight?

Cost (Pain) q At what price will customer

buy product/service/tool? q What effort will customer

expend in buying product? q What is customer acqu. cost? q What is annual total cost?

Revenue (Delight)) q How soon will customer buy? q How many and o`en will

customer buy? q How will customer pay? q What will be annual total

revenue?

PROFIT (VALUE) q What will be the annual

profit margin? q What will be the annual

profit?

3-‐ACT BUSINESS MODEL …………………………………………………..

PROFIT MODEL

Dream Viability Tes8ng (DVT): Ques'ons

Note: The above ques8ons are based on John Mullins and Randy Komisar’s book, “Geyng to Plan B”


VALUE CREATION MODEL (“Build”)

VALUE PROPOSITION MODEL (“Discover”; “Plan”)

Inputs/Partners q Materials/Supplies q  Informa8on q  Investment Capital q Strategic Alliances/Partners q Co-‐creators/Contractors

Internal Resources (Physical/Intellectual/Emo'onal/Spiritual Resources) q Employees q Machinery/Infra’ Facili8es q Technology/IP q Brand/Culture

Processes/AcVviVes q Discover q Plan q Build q Measure q Learn

Product/Value ProposiVon q Value Proposi8on Requirements q Value Proposi8on Statement q Product/Service/Tool: Features

Channels & RelaVonships q Online Channels q Offline Channels

Customer/Job-‐To-‐Get-‐Done q Customer-‐Protagonist q Stage (Arena); Conflict Zone q Cri8cal Problem q Task/Job-‐To-‐Get-‐Done/Quest q Constraints/Obstacles q Success Criteria (Outcomes)

Cost (Pain) q Cost of Customer Acquisi8on q Total Cost q Opera'ng Cost q Working Capital

Revenue (Delight) q E: Engagement q A: Acquisi8on q A: Ac8va8on q R: Reten8on q R: Referral q R: Revenue

PROFIT (VALUE) q High Profit Margin (Price):

Low Volume; Low Velocity q Low Profit Margin (Price):

High Volume; High Velocity q Gross Margin q Customer Life8me Value

PROFIT MODEL (“Measure”)

Dream Viability Tes8ng (DVT): Checklist 3-‐ACT BUSINESS MODEL

(“Learn”)


VALUE CREATION MODEL: COST REDUCTION

VALUE PROPOSITION MODEL: REVENUE INCREASE

Inputs/Partners q Co-‐crea8on; Social Media q Open Source Collabora8on q Crowd-‐funding/sourcing q Frac8onaliza8on/Co-‐owner q  Investor/Sponsor/Donor q Mergers & Acquisi8ons

Internal Resources (Physical/Intellectual/Emo'onal/Spiritual Resources) q Creator; Broker; Landlord q Peer-‐to-‐Peer Pla|orm q Facilitated Network q Patents (“Fences”; Barriers)

Processes/AcVviVes q Opera8onal Excellence; JIT q Automa8on (Self-‐service/DIY) q Gamifica8on; Digitaliza8on q Ecosystem Management q Problem Solving; Consul8ng q Compe88ve Strategies

Product/Value ProposiVon q Asset Sale/Direct Sale q Product Leadership/Extension q Used/2nd Hand Product; Bargain q Customiza8on (Value Factors) q Bundling/Unbundling q Product/Sooware as a Service

Channels & RelaVonships q Offline/Online; (In)direct Sale q Franchise; Licensing; Affiliates q Distributor; Disintermediator q Ad Network; Brand Mul8plier q Aggrega8on/Disaggrega8on q Auc8on/Reverse Auc8on

Customer/Job-‐To-‐Get-‐Done q Customer In8macy/Loyalty q B2B; B2C q Long Tail; Community (Hub) q Two-‐sided Market (Segments) q Mul8-‐sided Market (Pla|orm) q Luxury/Mass Market/Niche

Cost (Pain) q Outsourcing; Specializa8on q Group Deals q Lending/Ren8ng/Leasing q Cross-‐subsidiza8on q Frac8onaliza8on/Co-‐owner

Revenue (Delight) q Pre-‐payment; Amor8za8on q Discount; Dynamic Pricing q Razor Blade (“Bait & Switch”) q Usage Fee; Subscrip8on Fee q Tiered Payment; Freemium q Dona8on; Free

PROFIT (VALUE) q Shared Value (Profit) q Transient Compe88ve Adv. q Sustainable Compe88ve Adv. q Red Ocean; Low Cost/Margin q Blue Ocean; Luxury Spot q Disrup8ve Innova8on Spot

PROFIT MODEL: PROFIT INCREASE

Dream Viability Tes8ng (DVT): Paserns/Tac'cs 51 BUSINESS PROFIT PATTERNS

(Business Model Choices for Compe''ve Advantage)




3-‐ACT BUSINESS MODEL STORYBOARD Bird’s Eye View (Business Model Chain: Macro-‐Logic)


delivers

requires

drives

requires





delivers

requires

drives

requires

3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Business Model Tree – Hierarchical Decomposi'on of Macro-‐Logic)




Inputs/Partners

Internal Resources

Processes/AcVviVes

Cost (Pain)

Revenue (Delight)

PROFIT (VALUE)





delivers

requires

drives

requires

3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network: Meso-‐Logic)




Inputs/Partners

Internal Resources

Processes/AcVviVes

Cost (Pain)

Revenue (Delight)

PROFIT (VALUE)





delivers

requires

drives

requires

3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network: Meso-‐Logic)




require(s) sa'sfy/ies

require(s) sa'sfy/ies

Inputs/Partners

Internal Resources

Processes/AcVviVes

require(s) affect(s)

require(s) deliver(s)

Cost (Pain)

Revenue (Delight)

PROFIT (VALUE)

requires

drive(s)

delights




PROFIT MODEL CLASSIFICATION SYSTEM (PMCS) -‐ By Industry (Categories of Products/Services) How Businesses Really Make Money and Win Business Model Compe88ons in the Imita8on Economy


GENERIC POFIT MODELS

What industry is the business (or customer) in?




PROFIT MODEL CLASSIFICATION SYSTEM (PMCS) -‐ By Sector of Industry (Categories of Products/Services) How Businesses Really Make Money and Win Business Model Compe88ons in the Imita8on Economy


GENERIC PROFIT MODELS

q Healthcare, Life Sciences, and Pharmaceu'cals

q Chemicals Manufacturing

q Autos, Trucks, Trains, Ships, and Other Vehicles

q Consumer Products Manufacturing

q Aerospace & Defense

q Food, Beverage, and Tobacco Manufacturing

q Mining, Metals, Energy, U'li'es, and Environmental Services

q Agriculture, Forestry, Fishing, and Hun'ng

q  Insurance

q Food Services & Lodging

q Construc'on & Eng.

q Healthcare

q Banking, Fin. Markets & Services

q Consumer, Educa'on, Real Estate and Public Services

q  IT Services

q Business & Consul'ng Services

q Retail q Media & Entertainment

Note: The above descrip8on of sectors is based on the IBBCS; see hXp://www.industrybuildingblocks.com/Industry-‐Groups.php

q Travel

What industry is the business (or customer) in? Who is the customer-‐protagonist (most dissa'sfied)? What is the customer Job-‐To-‐Get-‐Done? What is the profit model of the business (customer)? What are analogs and an'logs of the profit model?




Business Model (3_Act)



Industry Ecosystem

Market Ecosystem


Macro-‐Economic Influencers

Key Trends & Complementors

Mission/Vision/Purpose/Ideals/ Ideal Final Result For Business Profit


Strategy Short/Medium/Long-‐term


4 Pivot Ques'ons





Strategy



WHY pivot?

HOW to pivot?


4 Pivot Ques'ons

Is Your Dream Business Idea Viable?
