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Learning Objectives

Learning Objectives. Explain what a business model is and what it accomplishes. Discuss the process for developing a business model. Explore the testing of a business model through feasibility analysis. “Understanding the 21st Century” Consumer” Janice Roberts. Business Model Components.

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Learning Objectives

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  1. Learning Objectives • Explain what a business model is and what it accomplishes. • Discuss the process for developing a business model. • Explore the testing of a business model through feasibility analysis. “Understanding the 21st Century” Consumer” Janice Roberts

  2. Business Model Components Table 4.1

  3. Why Business Models Fail • Flawed logic • Limited strategic choices • Imperfect value creation and capture assumptions • Incorrect assumptions about the value chain

  4. Developing a Concept for a New Business • A business concept is a concise description of an opportunity that contains four essential elements: • The customer definition • The value proposition • The product/service • The distribution channel “The Internet is Under-Hyped” FLOODGATE Fund Partner Ann Miura-Ko

  5. The Entrepreneur's Story • A compelling story has a beginning, middle, and end. • How they identified or created the opportunity • Challenges they overcame • Where they are now

  6. Building a Business Model • Stage 1: Identify position in value chain • Stage 2: Calculate how to create value for the customer • Stage 3: Identify revenue sources • Stage 4: Determining expenses and cost drivers • Stage 5: Develop the competitive strategy • Stage 6: Test the model through feasibility analysis

  7. Building a Business Model Figure 4.1

  8. Analyzing the Feasibility of a Business Model • All opportunities involve uncertainty, which is characterized by varying degrees of risk. • Risks can be identified and dealt with. • Uncertainty means outcomes are unknown so subjective probabilities must be applied.

  9. Analyzing the Feasibility of a Business Model (cont’d) • Feasibility and the Business Plan • Split view amongst entrepreneurs on the value of the business plan. • The Outcomes of Feasibility Analysis • Determination of whether the business model appears feasible • Preparing for Feasibility Analysis • Critical success factors • The Feasibility Tests • Areas to be analyzed “The New Business Model” Guy Kawasaki -Garage Technology Ventures

  10. Feasibility Analysis: Testing the Business Model Figure 4.4

  11. Quick Screen for Multiple Options • Quick screen ideas before undertaking a thorough feasibility study on any one of the concepts: • Start with a concept statement • Examine the industry • Identify the market – customer & competitors • Identify how the product/service benefits the customer • Examine founding/management team capabilities • List all resources needed by the business

  12. New Venture Action Plan • Create a concept statement for a new venture. • Develop a business model for the venture. • Craft a story that explains the business and is compelling to others. • Prepare to conduct a feasibility analysis on the business model. “Rapid Business Model Testing” Ann Miura-Ko - FLOODGATE

  13. New Venture Action Plan… And In Class Exercise • Create Your Own Personal Creativity Action Plan. • Practice generating ideas and problems using the techniques provided in the chapter • NOW…In Class Exercise with Your Ideas… • The Exercise -“Developing Creative Skills.” (making connections with your ideas) • Instructions on next PowerPoint ** The video shows tremendous creativity >>> “Matching Your Product to Customers” Bespoke Innovations Co-Founder Scott Summit

  14. In Class Exercise Instructions From Your Homework (the Discussion Posting) – • Each person selects 1 of their ideas/innovations… • Form Groups of 3…(3 ideas per group) • Each person passes an idea to the left…(and so on) • Each person adds something to extend the idea • You should end up with 3 ideas, each with 2 extenders • Then, select the best idea of the group and present • Don’t take to long…avoid analysis paralysis • Don’t be shy, think out of the box and think big Let Begin…Form Groups Please…

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