Entrepreneurship Final

Section 1: Business Model Canvas Overview

Q: What is the Business Model Canvas (BMC)?

A strategic management tool that outlines how a business creates, delivers, and captures value using 9 building blocks

Section 1: Business Model Canvas Overview

Q: What are the 9 building blocks of the BMC? 

Customer segments, value proposition, channels, customer relationships, revenue streams, key resources, key activities, key partnerships and cost structure

Section 2: Customer Segments 

Q: What are customer segments?

the different groups of people or organizations a business aims to reach and serve 

Section 2: Customer Segments

Why are customer segments important?

because customers are the heart of every business model - without profitable customers no company can survive

Section 2: Customer Segments

What are examples of types of customer segments? 

Mass market (broad, general needs) 

Niche market (specific needs of a small segment) 

Segmented Market (slight variations in needs)

Diversified Market (multiple unrelated segments)

Multi Sided platforms (serve two or more interdependent groups) 

Section 2: Customer Segments

What questions should you ask when identifying customer segments? 

Who are we creating value for? Who are our most important customers? 

Section 3: Value Proposition

What is a value proposition?

the bundle of products and services that create value for a specific customer segment

Section 3: Value Proposition

Why is the value proposition important?

it defines why customers choose one company over another the core of competitive advantage

Section 3: Value proposition

What elements can create value? 

newness, performance, customization, design, brand/status, price, cost reduction, risk reduction, accessibility, convenience

Section 3: Value proposition

What should you identify when defining a value proposition?

the customer problem being solved and the need being satisfied

Section 4: Channels

what are channels? 

the means by which a company communicates with and reaches its customer segments to deliver the value proposition

Section 4: Channels

what are the types of channels?

direct (sales force, website, own stores) and indirect (partner stores, wholesalers)

Section 4: Channels

what are the five channel phases? 

Awareness - evaluation - purchase - delivery - after sales

Section 4: Channels

why are channels important? 

they are customer touch points that shape the customer experience 

Section 5: Customer Relationships 

What are customer relationships? 

the types of relationships a company establishes with each customer segment

Section 5: Customer relationships 

why are customer relationships important?

they drive customer acquisition, retention, and upselling

Section 5: Customer relationships

what are examples of customer relationships?

personal assistance, dedicated personal assistance, self service, automated services, communities, co creation

Section 6: Revenue Streams

what are revenue streams?

the cash a company generates from each customer segment (must subtract costs to get profit)

Section 6: Revenue streams

what are two types of revenue streams?

transaction revenues (one time payments)

recurring revenues (ongoing payments for ongoing value)

Section 6: Revenue streams

what are examples of pricing mechanisms?

fixed pricing (list price, product feature dependent, customer segment dependent) and dynamic pricing (negotiation, yield management, real time market)

Section 6: Revenue streams

what are common revenue models?

asset sale, usage fee, subscription fee, lending/renting/ leasing, licensing, brokerage fee, advertising

Section 7: Key resources

what are key resources? 

the most important assets requires to make a business model work 

Section 7: key resources

what are the types of key resources? 

physical (buildings, vehicles, machines)

intellectual (brands, patents, databases)

human (employees, expertise) 

financial (cash, lines of credit, stock options)

Section 8: Key activities

what are key activities?

the most important things a company must do to make its business model work 

section 8: key activities

what are the three main categories of key activities?

production (design, make, deliver product)

problem solving (consulting, creative solutions) 

platform/ network maintenance (software, matchmaking platforms)

Section 9: Key partnerships

what are key partnerships?

the network of suppliers and partners that make the business model work

section 9: key partnerships

why do companies form partnerships?

optimization/economies of scale, reduction of risk and uncertainty, acquisition of resources or activities 

section 9: key partnerships

what are the types of partnerships?

strategic alliances (non competitors)

coopetition (partnerships between competitors)

joint ventures (new businesses)

buyer supplier relationships 

Section 10: Cost Structure

what is the cost structure?

all the costs incurred to operate a business model

Section 10: cost structure

what are the types of business model cost structures? 

cost driven (focus on minimizing costs, eg. low price airlines)

value driven (focus on value creation, premium services)

Section 10: cost structure

what are characteristics of cost structures? 

fixed costs, variable costs, economies of scale, economies of scope

Section 11: Customer development & MVPs

what is customer development? 

the process of testing and validating assumptions about customers and markets through real interactions 

Section 11: Customer development & MVPs

what is a minimum viable product (MVP)?

the simplest version of a product that allows a startup to test a key hypothesis with minimal resources

Section 11: Customer development & MVPs

what is the goal of an MVP? 

to validate or invalidate fundamental assumptions quickly and cheaply

Section 11: Customer development & MVPs

what are examples of MVPs?

Zappos shoe website experiment

dropbox’s explainer video

landing page sign ups to test interest

Section 11: Customer development & MVPs

what are the types of MVPs? 

concierge MVP - manually deliver service

wizard of OZ MVP - humans behind fake automation

explainer video MVP - demonstrate value prop via video

piecemeal MVP - combine existing tools 

pre order MVP - offer product for sale before it exists

Section 11: Customer development & MVPs

what key metrics are tracked for MVPs? 

activation rate, retention, conversion, and learning outcomes

Section 12: Pivoting

what is a pivot? 

a structured course correction designed to test a new fundamental hypothesis about a product, strategy, or growth engine

Section 12: pivoting

why do startups pivot? 

because feedback or data shows the current path is not working

section 12: pivoting

is pivoting failure? 

no its a learning driven adjustment to find a more viable direction

section 12: pivoting

what are the main types of pivots? 

customer segment pivot - targeting a new customer group

customer need pivot - solving a different problem 

platform pivot - changing between product and platform

value capture pivot - changing revenue model 

technology pivot - adopting better tech to solve same problem 

Section 13: build measure learn loop

what is the build measure learn loop?

the core cycle of lean startup methodology build an MVP, measure customer response and learn whether to pivot or persevere

section 13: build measure learn loop

what is validated learning? 

learning based on data proving that your idea solves a real problem for real customers 

section 13: build measure learn loop 

what’s the difference between pivot and persevere?

pivot: change direction based on learning

persevere: continue current course with validation 

SECTION 14: TECHNOLOGY ADOPTION LIFE CYCLE

What is the Technology Adoption Life Cycle?

A model describing how different groups adopt innovations over time.

SECTION 14: TECHNOLOGY ADOPTION LIFE CYCLE

What are the five adopter categories?

Innovators (2.5%), Early Adopters (13.5%), Early Majority (34%), Late Majority (34%), Laggards (16%).

SECTION 14: TECHNOLOGY ADOPTION LIFE CYCLE

Who are Early Adopters and why are they critical?

They are influential first users who validate the product and help bridge the gap (“the chasm”) to mainstream markets

SECTION 15: MARKET SEGMENTATION & POSITIONING

What is Market Segmentation?

Dividing a market into distinct groups of customers with common needs or characteristics.

SECTION 15: MARKET SEGMENTATION & POSITIONING

Why is segmentation important for startups?

It helps focus limited resources on the most promising market segment first.

SECTION 15: MARKET SEGMENTATION & POSITIONING

What is Positioning?

Designing your offering and image to occupy a distinct, valued place in the mind of the target customer

SECTION 15: MARKET SEGMENTATION & POSITIONING

What’s the purpose of positioning?

To clarify why your product is unique and relevant, and shape customer perception.

SECTION 15: MARKET SEGMENTATION & POSITIONING

Examples of positioning?

• Volvo → “Safety”

• A startup → “Most affordable,” “Most user-friendly,” “Most premium”

SECTION 16: BUSINESS MODEL PATTERNS

What is a Freemium Model?

Offer a basic version for free; monetize through ads or premium upgrades (e.g., Spotify, Dropbox).

SECTION 16: BUSINESS MODEL PATTERNS

What is a Free (Ad-Supported) Model?

Users pay nothing; advertisers or third parties fund the service (e.g., Google, Facebook)

SECTION 16: BUSINESS MODEL PATTERNS

What is a Bait & Hook Model?

Offer a low-cost initial product, profit from ongoing consumables (e.g., razors and blades, printers and ink).

SECTION 16: BUSINESS MODEL PATTERNS

What is an Add-On Model?

Low base price with optional paid upgrades or extras (e.g., airlines charging for luggage, meals, seats).

SECTION 16: BUSINESS MODEL PATTERNS

What is a Subscription Model?

Customers pay regularly for continued access (e.g., Netflix, Spotify).

SECTION 16: BUSINESS MODEL PATTERNS

What is the Sharing Economy Model?

Users access rather than own goods/services through a platform (e.g., Airbnb, Turo)

SECTION 17: STARTUP FUNDING SOURCES

What are the two main types of financing?

Debt financing (borrow and repay) and equity financing (sell ownership for capital).

SECTION 17: STARTUP FUNDING SOURCES

What is Bootstrapping?

Using personal funds or reinvested revenue to grow — keeps control but limits speed.

SECTION 17: STARTUP FUNDING SOURCES

What is Friends & Family funding?

Early, informal investments from personal connections — flexible but risky personally.

SECTION 17: STARTUP FUNDING SOURCES

What are Convertible Loans?

Loans that convert to equity later when valuation is set (common early-stage funding).

SECTION 17: STARTUP FUNDING SOURCES

What are Angel Investors?

Wealthy individuals investing personal funds early in exchange for equity and mentorship.

SECTION 17: STARTUP FUNDING SOURCES

What is Venture Capital?

Institutional investment in high-growth startups, usually for equity and partial control.

SECTION 17: STARTUP FUNDING SOURCES

What is Private Equity?

Large investments in mature companies to improve value before exit — often majority control.

SECTION 17: STARTUP FUNDING SOURCES

What are Bank/SBA Loans?

Traditional or government-backed small business loans; repaid with interest.

SECTION 17: STARTUP FUNDING SOURCES

What is Crowdfunding?

Raising small amounts from many people online; can be reward-based or equity-based.

SECTION 18: INCUBATORS VS. ACCELERATORS

What are Incubators?

Long-term programs that nurture early-stage ideas, provide workspace and mentorship, but usually don’t fund directly.

SECTION 18: INCUBATORS VS. ACCELERATORS

What are Accelerators?

Short, intensive programs for startups ready to scale — provide mentorship, seed funding, and end with Demo Day.

SECTION 18: INCUBATORS VS. ACCELERATORS

Key difference between Incubators and Accelerators?

• Incubators: early concept stage, no funding, long-term.

• Accelerators: growth-focused, equity-based, short-term.