Investing Business Model Revision

Revision for validation test.

What is a business model?

How a company creates value for itself while delivering products or services for it’s customers.

How many boxes does a business model have?

9

What question are you attempting to answer in the ‘Value Proposition’ box?

What are you building, and for who? Not about your idea or product, but about solving a problem or a need. What pain are you solving, and what gain are you creating?

What is the purpose of the ‘Customer Segments’ box?

Figuring our your customers detail such as: geographic, social characteristics, and demographics - find out the archetype or persona of your customers.

Why can you only have a hypothesis about your customer segments on day 1?

Because you have not seen what type of customers actually want your product or service.

Define distribution channels for the ‘Channels’ box

How to get your product to your customers. Figure out how to sell - through physical channels or online channels, or both?

What is the point of the Get, keep, grow model as part of the ‘Customer Relationships’ box?

Figuring out how get or acquire customers, then how to keep them and get them to do something, and then how to grow the customers and have them return and spend more.

What will you include in the ‘Revenue Streams’ box?

Asks the question: ‘what value is the customer paying for’. How will you capture the value - through a direct sale, or premium model, subscription? What is the cost of your product? You must interact with a lot of customers to figure this out.

What is included in the ‘Key Resources’ Box?

What do you need for the business model to work - what assets are important? For example finance/capital, physical manufacturing plant, specialised machines, vans, cars for delivery, intellectual property, workers.

Define ‘Key Partners’ and provide examples of what to include in the box.

Ask the questions: What are we acquiring from partners, what activities are they going to perform, and when. Partnerships needed in year 1 differ from the ones needed later on. Some examples are: strategic alliances, joint ventures, suppliers, and buyers.

What should be included in the ‘Key Activities’ box?

What are the most important things the company must do for the business to make the business model work? Are you in production, problem solving, supply chain management, etc.

Finally, what goes in the ‘Costs’ Box?

What are the entire costs to operate the business model? What are the most important costs you need to worry about? What are the most expensive resources? What key activities are most expensive? What are the fixed and variable costs?