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Business Modeling
to
Reduce Risk
Identify risks. Systematically.
©: spidercho, dpreview.com
What is this usually used for?
© Clockwork Orange, Wikimedia Commons
Of course,
to sit…
© File Upload Bot (Kaldari), Wikimedia Commons
…or sometimes,
to stand on.
Source: archiproducts.com
But what, if the table is too low?
Source: casa-diseno.com
…or too high?
Source: addyunknown.blogspot.com
…or the stool is
just too small?
Source insidethetravellab.com
…or just simply
broken?
WHAT THE FUNK? Source colourbox.com
Tools are just that: tools. Not more, not
less. You still do need to use your brains.
Source: annebrogdonportfolio.blogspot.com
Words of caution:
Don‘t let your Startup Tool be a (S)tool!
Agenda
2. Value Proposition
3. Lean Adaptation
4. Identify Risks
1. Business Model
2. Value Proposition
3. Lean Adaptation
4. Identify Risks
Business Model
Source: www.hangthebankers.com
„[…] abstract
representation of
the business logic
of a company.“ The Business Model Ontology (Diss.),Osterwalder and Pigneur, 2004
Def.:
A business model describes the rationale
of how an organization creates, delivers,
and captures value. Business Model Generation, A. Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self published, 2010
Def.:
Or in English: A business model describes
how your company makes money. What’s a startup? First Principles, Steve Blank, Blog article, www.steveblank.com (Retrieved Oct 26, 2012)
What signals to follow?
Source: http://journeytojoy-timberwolf123.blogspot.de/
Source: http://metroland.net Divide & Conquer
Source: melvenue.de
A snapshot of reality.
Source: artur.borzecki, flickriver.net
3. Lean Adaptation
4. Identify Risks
1. Business Model
Value Proposition
© Alex Osterwalder, Flickr.com
All graphics © Alex Osterwalder, Flickr.com
Goal: product-market fit
What jobs is she trying to get
done? (functional, social, emotional etc…)
What pains does she have? (Emotions, cost, situations, risks…)
What gains is she hoping for? (functional, social, emotional, costs etc…)
All graphics © Alex Osterwalder, Flickr.com
On which products/services is
your VP based? (in-/tangible, digital/virtual, financial, …)
How are they pain killers? (Emotionen, Kosten, Situationen, Risiken …)
How are they delivering gains? (funktional, sozial, emotional, Kosten …)
© Alex Osterwalder, Flickr.com
Connection of Canvas and Lean?
2. Value Proposition
4. Identify Risks
1. Business Model
Lean Adaptation
Business Model Canvas ∩ Lean Startup → Lean Canvas.
It‘s all about empathy and developing a
customer-centric point of view.
Source: qualiaforlife.wordpress.com
Customers don‘t care about your
solution. They care about their problems. Dave McClure, 500 Startups
Source: girlzinweb.com
Problem Solution
Key Metrics
Unfair Advantage
(Existing Alternative) (High-level concept) (Early Adopter)
Running Lean (2nd Edition), Ash Maurya, O‘Reilly, 2012
(Existing Alternative) (High-level concept) (Early Adopter)
Running Lean (2nd Edition), Ash Maurya, O‘Reilly, 2012
(Existing Alternative) (High-level concept) (Early Adopter)
2. Value Proposition
3. Lean Adaptation
1. Business Model
Identify Risks
Def.:
A startup is a human institution designed
to create a new product or service
under conditions of extreme uncertainty. The lean startup, Eric Ries, Crown Business, 2011
Uncertainty and risk are
different things.
You can be uncertain about a
lot of things that aren‘t risky.
Def.
Uncertainty: The lack of complete
certainty, that is, the existence of more
than one possibility.
Risk: A state of uncertainty where some
of the possibilities involve a loss,
catastrophe, or other undesirable
outcome.
How to Measure Anything: Finding the Value of Intangibles in Business, Douglas Hubbard, John Wiley & Sons, 2007.
RISK PRODUCT
CUSTOMER
MARKET
Getting the product right.
Building a path to customers.
Building a viable business.
3 main categories:
© zerega, thepersonalgenome.com
Running Lean (2nd Edition), Ash Maurya, O‘Reilly, 2012
(Existing Alternative) (High-level concept) (Early Adopter)
P
P
M
M
M C
C
Source: ordersixty6.blogspot.com Priorities
- some men have them, other men don‘t.
Incorrect prioritization = waste
Create multiple canvases for each
specific customer segment (users vs.
paying etc.).
User
Customer
Advertiser
…
Key take-away (1/8)
Mirror them with others to get feedback.
Use feedback for the assessment of risks.
Source: graphics99.com
Key take-away (2/8)
Rank your business models.
4
3
2
1
Key take-away (3/8)
Ash Maurya‘s weighting order:
Customer pain level (problem)
Ease of reach (channels)
Price/gross margin (rev./cost)
Market size (customer segments)
Technical feasibility (solution)
Key take-away (4/8)
Rank your business models.
Prioritize risks based on stage of product.
Is there one-risk-that-matters at a give
point in time? (compare: one-metric-that-matters).
lifecycle
Key take-away (5/8)
Source: www.ashmaurya.com/2013/03/lean-analytics-the-one-metric-that-matters-and-other-provocations/ Adaptation of „The Stages of Lean Analytics“ Graphic
P
M
M
C
C
P
C
Key take-away (6/8)
Cost/Benefit Ranking
Canvas 1 Canvas 2 …
Risk Prioritization:
worst
2nd-worst
3rd-worst
…
Key take-away (7/8)
3 dimensions of risk identification.
Create Multiple
Canvases
Rank Canvases
(Cost/Benefit)
Determine Life-Cycle
Stage
Prioritize Risks(Stage)
Take Action!
Key take-away (8/8)
Risk identification process.
Learn & improve
Thank you!
Questions?
Julius Parrisius
Website: juliusparrisius.wordpress.com
E-Mail: [email protected]
Twitter: @JRParrisius
