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8/13/2019 PAFI - 18 nov 13- François Mazoudier- Rev models
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Revenue Modelling
Theory & Real life case study
Founders Institute
Paris, France
18th Nov 2013
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MY LIFE DIGITS
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WE TRUST, BACK AND CO-INVEST WITH TOP TE
HIGH END, GLOBAL, ACTIVE NETWORK.
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BMCBusiness Modelling Canvas
www.businessm
Ale
ALEXANDER OSTERWALDER
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BMC | Business Modelling Canvas
www.businessm
Ale
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BMC
For what value are our customers r
For what do they currently pay?
How are they currently paying?
How much does each Revenue Str
overall revenues?
Through which Channels do
our Customer Segments
want to be reached?
How are our Channels
integrated?
Which ones work best?
Which ones are most cost-
efficient?
How are we integrating them
with customer routines?
What type of relationship
does each Customer
Segments expect us to
establish and maintain?
Which ones have we
established?
How are they integratedwith the rest of our
business model?
How costly are they?
What value do we
deliver to the
customer?
Which one of our
customer’s problems
are we helping to
solve?Which customer needs
are we satisfying?
What Key Activities do our
Value Propositions
require?
Our Distribution Channels?
Customer Relationships?
Revenue streams?
Who are our Key
Partners?
Who are our key
suppliers?
Which Key Resources
are we acquiring
from partners?Which Key Activities do
partners perform?
What Key Resources do
our Value Propositions
require?
Our Distribution
Channels? Customer
Relationships?
Revenue Streams?
What are the most important costs inherent in our
business model?
Which Key Resources are most expensive?
Which Key Activities are most expensive?
www.businessmodelgeneration.com Alexander Osterwalder
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www.se
• People
•
Technolog y
• Equipment
• Channels
• Partnershi
ps
• Brand
BMC for DummiesCustomer-value Proposition
Profit FormulaKey Resources Key Processes
• Job-to-be-done by customer
• Offering to satisfy need
• Customer satisfaction
• Revenue model (price X
quantity)• Cost structure - direct, indirect,
overhead, economies of scale
• Target unit margin - achievingdesired profit levels
• Resource velocity - throughput,inventory turnover, assetutilization
• People
• Technology
• Equipment
• Channels
• Partnerships
• Brand
•
Processes• Business Rules
• Success metrics
• Behavioural
norms
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Simple summary
Asset SaleSelling a product, or ownership rights to it
Usage feesUsually for using service, and now products to (CC)
Subscription fees
Continuous access to a service, and now products too (CC)
License feesPermitting others to use copyrighted property
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The basicsHow to choose your revenue model
Think about your revenue model during
your business planning stages.
VERY hard to change mid-flight.
Test and A/B test excessively, and all the
time. NEVER stop testing – clients change
all the time.
Don’t lock yourself into just one model –
you don’t have to.
You don’t really ever know what’s best,
nor do your customers.
Customer preferences and habits change
over time.
You can’t be everything to eve
Get one model working really
Keep tracking your results vs A
During planning you might ide
revenue models that could su
Test them to match the best o
customer segment and which
profitable.
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Real Life lesson(s): GoHello
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goHello
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Business case summary
Mob telco focused Fixed fee license per company
Massive USP, high user ratings, amazing R
Proven in Denmark 50+ happy companies, no churn.
€1.8m revenues.
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So what’s the problem
Mob telco focused
Fixed fee license per company
Massive USP, high user ratings,
amazing ROI
Proven in Denmark
50+ happy companies, no churn. €1.8m revenues.
Zero distribution cont
No growth with usage
Telco giveaway (real fodongles)
Denmark, where’s tha
Under 10% growth y/y
Negative EBITDA – higtax , expensive channechannel)
Low margin, not scalable. Not for VCs.
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Say no to TelCo
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Plenty of issues
RAISING CAPITAL SaaS unknown model (2006) and never
done in TelCo
DK (size, representative enough?)
VoIP hype vs GSM
Total lack of investor knowledge
UNTESTED FINANCIALS Same high costs, now from fixed yearly
income to contract-less seats per month.
rom €25k - €100k per deal to… €3.99
Cost of acquisition & scalability unknown.
Will SME buy online?
CHANNEL CONFLI Complex Channel mix
Direct under 10 sea
10-50 seats: telco+
Over 50 seats: telcocompetition
Telco threat to stop sellingrevenues, only SIM sales.keeping mPBX low/free
Army of VoIP and PBX reschange (golden goose kill
TEAM DK, UK, Asia: huge geo sp
ex Telco teams and senio
Simple compensation pla
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New model, new set of numbers €3.99 x 18,000 per year
2 year breakeven
Totally independent growth
Telco as any other Channel Cannot leave SIM sales to other networks
No privileges or deep discounts
Must perform
Must commit volumes
Large Asia Telco x 2 deals Hong Kong, Philippines
No PBX for SME possible before
20,000 unit commitments year1, 100% y/y f’cast
Company sold in 2009 2 offers
US buyers
12m SME
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Key Learnings
No two businesses alike
You don’t know, they don’t know either. Onlycustomers know what works for them.
Focus on ONE business model only, prove it o
THEN move on. Customers and buyers change patterns supe
DO IT, TRY IT or LOSE IT. life’s short.