Introduction to Japan Business Model Competition　

Business Model CompetitionJBMC-Nigata

October 24,2015Waseda University

International University of JapanDr. Takeru Ohe

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Dr. Takeru OheChairman, JBMC Executive Committee

· He sits on the boards of Cognex Japan K.K., a machine vision manufacturer, and My Vision, a nonprofit organization specializing in entrepreneurship education for youth.

· He taught Entrepreneurship at Waseda University, Business School and served as managing director of the Waseda University Incubation Center. Currently he serves as an advisor to Research Promotion Division of Waseda University and visiting professor at the International University of Japan.

· Ph.D. in Experimental Physics from the University of Maryland and an MBA from Columbia University Graduate School of Business.

· Dr. Ohe has initiated various successful programs: “Born ASEAN” program, Consulting Based Learning for ASEAN SMEs program, Teaching Incubation Center program at Waseda University. Waseda Venture Kids program and etc.05/03/2023 (C) Takeru Ohe 2

Table of Contents

1. Business Model Competition is not a Business Plan Contest

2. Uncertainty and Experiment3. Judging criteria4. Preparation for BMC5. JBMC

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BUSINESS MODEL COMPETITION IS DIFFERENT FROM BUSINESS PLAN CONTEST

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The IBMC is not a business plan competition.

• Over 85 percent of new businesses fail within a few years, often because they try to plan their way to success.

• The International Business Model Competition represents a radical departure from the past and the crest of a new paradigm in entrepreneurship.

• The IBMC is not a business plan competition. 05/03/2023 (C) Takeru Ohe 5

Business Model Competition evaluates the process of checking of assumptions

Business Model Competition(BMC)

• The objective is to help start the business

• Most of time spent meeting potential customers or searching markets– Customer segmentation – Value propositions – The most important thing is

revenues• The simple profit statement is

good enough

Business Plan Contest　(BPC)

• The objective is to write an elaborate and logical plan

• Most of hours are spent in front of the PC to get secondary data

• A lot of time is spent to prepare financial statements

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The IBMC rewards students for: 1. Identifying and tracking key business model hypotheses (use the

Business Model Canvas)2. Testing and validating those hypotheses with customers (get

outside the building)3. Pivoting and iterating their business model based on customer

interactions

• Submissions for the competition focus on the process and learning a team goes through as they test their unexamined hypotheses in the field and develop validated business models.

• The goal is validated learning about the business model assumptions and failing early is a success compared to failing late.

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UNCERTAINTY AND EXPERIMENT

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How to compete: the wave of transient advantage of uncertainty world

Return

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Source: The End of Competitive Advantage (P13) Rita Gunther McGrath, HBRP 2012

Launch Ramp up Exploit Reconfigure Disengage

Uncertainty for startups

• There is uncertainty for any business due to being in the uncertain world.

• There is additional uncertainty for any new business since there are many unknown for startups.

• To promote a new business, you must deal with uncertainty and take advantage of the uncertain environment.

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Experimental Methodology for Business Management

• As experimental physics has led to the advancement of physics, "experimental management” can lead to the development of Business management.

• "Experimental management" which was developed for new business must be applied at once to the main lines of the company due to uncertainty in the ultra-competitive world.

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Experimenting

Five skills of disruptive innovators

New ideas are often created during verifying ideas, business concepts and business models through experiments

and prototypes.

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JUDGING CRITERIA OF BMC

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JUDGING CRITERIA

1. Did the team use the Business Model Canvas or similar tool to identify and track hypotheses? 2. Did the team clearly state their hypotheses (assumptions)? 3. Did the team identify the most crucial assumptions to test first (the ones that will kill their business)? 4. Did the team design, low cost, rapid, but reliable tests of these hypotheses? 5. Did the team conduct the tests in a reliable manner?

a. Number of tests - # should be adjusted for industry, product type (web vs physical product), and business type (B2B vs B2C)

b. Quality of tests - interviews are high quality, surveys & focus groups are much lower quality (you don’t know which questions to ask) unless interviews have been conducted first

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• 6. Did the team clearly state what they learned, how it validated an assumption or not, and if that informed any changes/pivots?

• 7. If changes were made, was the pivot the team made to support by evidence or did they fail to pivot when the evidence clearly stated it?

• 8. If appropriate, has the team developed a prototype or minimum viable product (MVP)? Does the team understand the assumptions they are tested with a prototype or MVP? Is the prototype or MVP appropriate to answer those assumptions?

– We want to reward prototypes over full products unless the product is the result of many prototypes tested with customers—in other words, we want to reward testing assumptions before building and building from prototypes up to products. We do not want to reward just building products too early based on untested assumptions.

• 9. Is the team solving a significant problem (defined in terms of money or impact)?*

• 10. Does the team have significant evidence that the solution is validated (includes letters of intent, purchase contracts, sales, and partners)?*

– * these two criteria serve as tiebreakers – NOTE: Because web-based businesses are easier to test, these companies can often pivot faster. We

tend to treat physical products, services, and web/software as slightly different categories in the judging, then pick the best of these categories to compete.

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Resource: Business Model Generation, Osterwalder, A. & Pigneur, Y. (2010)

4.Customer Relationships

3. Channels

2.Value Propositions

7. Key Activities

6. Key Resources(Intellectual property, Assets)

8.Key Partners

5.Revenue Stream

9.Cost structure

Business Model Canvas

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1.Customer Segments

HOW TO PREPARE FOR THE COMPETITION2013 BEST BUSINESS MODEL “OWLET”SOURCE: VALUE PROPOSITION DESIGN, OSTERWALDER, A. & ETC., WILEY (2014)

The owlet is a wireless monitor measuring your baby's heart rate and oxygen. The data is sent to your smartphone and will alert you if there's an emergency.

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Owlet; constant progress with systematic design and testing

• Wireless monitoring of babies' blood oxygen, heart rate and sleep data.

• The owlet is a smartphone compatible baby monitor. But for added safety and security, Owlet is designed to function independently of your Apple device. The Smart Sock and the Base Station connects through low power Bluetooth. If your iOS device dies, or home internet goes out, your Base Station will still alert you if your baby stops breathing. For convenience, the Base Station will upload your infant’s heart rate and oxygen levels to the cloud. You, and anyone with permission, can view your baby’s levels from anywhere in your home, Grandma’s house, or even the office.

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Source: Value Proposition Design, Osterwalder, A. & etc, Wiley (2014)


3. Channels

2.Value Propositions

7. Key Activities


8.Key Partners

5. Revenue Stream9. Cost structure

Owlet Business Model: version 01. Initial Idea: an opportunity (Monitoring pulse oximetry could be easier

without the cord between the device and the monitor display)

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1.Customer Segments

Pulse oximetry monitor

Nurses

Hospitals Hospitals

Salesmen

Test 1ANurse Interviews

Items

1 Hypothesis Wireless pulse oximetry is more convenient

2 Metric Percentage of positive feedback

3 Test Interview nurses

4 Data Of 58 interviews, 93 percent prefer the wireless monitoring

5 Validate results Validated

6 Period and cost 1 week, $0

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Test 1BHospital Administrator Interviews

Items

1 Hypothesis Wireless pulse oximetry is more convenient

2 Metric Percentage of positive feedback

3 Test Interview hospital feedback

4 Data 0 percent ready to pay more for wireless. Ease of use is not a pain, it not cost effective.

5 Validate results Un-validated


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Resource: Value Proposition Design, Osterwalder, A. & etc., Wiley (2014)


3. Channels

2.Value Propositions7.

Key Activities


8.Key Partners


Owlet Business Model: version 2Pivot: Change the customer segment from nurses and hospitals

to worried parents


1.Customer Segments7.

Key Activities8.Key Partners

Baby alarm Parents

Baby store

< $200 price

Test 2Parent Interviews

Items

1 Hypothesis Parents are ready to adopt and buy a wireless baby alarm

2 Metric Percentage of adopting parents

3 Test Interview months

4 Data Of 105 interviews, 96 percent adopt the wireless monitoring “Awesome. I want to buy now!”


6 Period and cost

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Test 3MVP Landing page

(minimum viable product)

Items

1 Hypothesis A smart sock is convenient and easy to use for monitoring

2 Metric Number of positive comments

3 Test An MVP, with a video an a website

4 Data 17,000 views, 5500 shares of facebook, 500 positive comments by parents, distributors, and research organizations



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Test 4A/B Price test

Items

1 Hypothesis Rental versus sale at $200+ sale price

2 Metric Percentage for a sale price

3 Test A/B testing, 3 rounds on the website

4 Data 1170 people tested, $299 the best price


6 Period and cost 8 weeks, $30

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3. Channels

2.Value Propositions7.

Key Activities


8.Key Partners


Owlet Business Model: version 3With a more minimal, less risky product, and infant health tracker (heart rate, oxygen levels, and sleep patterns), but without alarm, for another customer

segment; the less worried parents


1.Customer Segments7.

Key Activities8.Key Partners

Baby alarm

FDA clearance

<$200 price

Infant health tracker

Baby stores

Worried parents

Less worried parents

Baby stores

Test 5Interview/Proposition: Owlet ChallengeItems

1 Hypothesis Less worried parents are ready to adopt and buy a wireless baby health tracker, without alarm

2 Metric Percentage of parents adopting the no-alarm tracker

3 Test Interview at retail locations, having to choose between Owlet tracker and other similar systems (video, sound, and movement)

4 Data Of 81 people interviewed, 20%adopted the Owlet tracker


6 Period and cost 3 weeks, $0

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Testing step-by-Step

• Your customers are the judge, jury, and executioner of your value proposition, so get outside of the building and test your ideas with the customer deployment and lean start-up process. Make sure you start with quick and cheap experiments to test the assumption underlying your ideas when uncertainty is at its maxim.

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JBMC NIGATA, JBMC AND IBMC

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IBMC Founders, Host Schools, Judges

The IBMC is currently co-hosted by Brigham Young University, Harvard University, and Stanford University.2013 Host - Harvard University2014 Host - Brigham Young University2015 Host - Brigham Young University2016 Host – Stanford University (Plan)

The Founders:Nathan Furr (Ph.D., Stanford; Entrepreneurship Professor, BYU)Steve Blank (Entrepreneurship Professor, UC Berkley; Lecturer, Stanford)John Richards (Entrepreneurship Professor, BYU)Scott Petersen (Director, Center for Entrepreneurship & Technology, BYU)

The judges of the 2015 IBMC Prof. Steve Blank (Stanford University) Prof. Nathan Furr (Bringham &　 Young University) Dr. Alexander Osterwalder etc.

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The Japan Business Model Competition(JBMC)

• JBMC was founded in 2013 by – Prof. Takeru Ohe (Waseda University adviser, IUJ ), – Dr. Makoto Sarata (ASTEM)– Mr. Satoshi Okuda (Primestyle) in 2013.

• JBMC is one of feeder competitions for IBMC, and the winner of JBMC automatically will be sent to the IBMC.

• The 3rd Japan Business Model Competition will be held on February 27 and 28. 2016 in Tokyo.

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2nd JBMC Finalists (2015 March)

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Business Model University

3 "Dream Pharos" Cloud notebook between parents and nursery

Japan Advanced Institute of Science and Technology

"Next .I " Decoration kit for lunch Keio University

Tailored health analysis system Tokyo University

"Dream Come True" new SNS Keio UniversityJapanese Language and culture lessons through Youtube Waseda University

1 Log System for low back pain Kyoto University

Customer service system for beauty salons Tokyo University

2 Total hair care system based on gene analysis Tokyo UniversityAssist device system with dispensable actuator Waseda University

Social "fitting room" platform International University of Japan

英語日本語韓国語

Ministry of Economy, Trade and Industry"Innovator nurturing world-class?

20 people will be dispatched to Silicon Valley Dispatch

• Toshiba – Service to create a nail that was decorated on the

basis of the 3D scan of nails. • Nikon Corporation

– Smartphone application to help select vegetables that seen when the vegetables of nutrients and freshness take pictures

• FutureArchitect– Clothing rental services for visiting Japan, foreigners

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References

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Contacts

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Home Page:japan-bmc.com/Facebook: https://www.facebook.com/japan.bmcMail:　　 [email protected]: http://www.businessmodelcompetition.com/

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Education

Introduction to Japan Business Model Competition

Introduction to Japan Business Model Competition　