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The mission of Idaho Entrepreneurs is to support and build an entrepreneurial culture at the University of Idaho and beyond. We provide resources and opportunities for start-ups, innovation, and outreach.
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The Mission of Idaho Entrepreneurs …is to support and build an entrepreneurial culture at the University of Idaho and beyond. • Startups • Innovation • Outreach (BTE, Extension, Legal Clinic, Incubators, …) • Tech Transfer
Goal: Convert Innovation to Economic Value • Idaho Entrepreneurs’ Speaker Series • The Idaho Pitch • Business Plan Competitions • Ideation Events: Science, Engineering, Natural Resources, … • Outreach:More robust outreach in multiple directions, Think Space / Innovation Lab • Biz for Scientists 2015
Today’s Agenda • Ideas • Feasibility • Business Models • Business Plans • Storytelling: Pitching an Idea
Try this Ideation Exercise • A lot of good ideas come from an irritation. Think about a problem, a pain that bothers you or something you think about that affects people or the environment. • Describe the pain, the problem. • Who has the problem? • Do you have a solution?
Dylan’s Idea • The Pain • Who has the Pain? • The Solution: TekMarch • But what about the market, the competition, the key resources and activities, costs, partners, …???
Influencing the Process of Product Innovation • Startups, growing a business, Intellectual Property, and Entrepreneurship are hard! • Knowledge Gaps • Market Uncertainty • Issues of Feasibility
Feasibility • Too often, we launch new ideas without thinking through what our market is, if we have the technical aspects covered, do we fully understand our costs, and do I really have the managerial and organizational skills to launch this business? • Preparing a feasibility study helps determine if there is sufficient demand and profit potential and business experience to make it work.
Overview of a Feasibility Study • Description of the project (and problem it solves) • Market feasibility • Technical feasibility • Financial/Economic feasibility • Org/Managerial feasibility • Results / Conclusion / Next Steps www2.ca.uky.edu/cmspubsclass/files/adreum/marketanalysis.ppt
A feasibility study is NOT a business plan. • Feasibility Study Business Model Business Plan • Feasibility is an investigating function – • “Is this idea/innovation/product/company viable?” • A Business Plan is a planning function to take the proposal from ‘Idea2Reality’ • “How do we do this?” • A Business Model is something different from both; • it’s the rationale for “how do we create and capture value?” A Feasibility Study leads to Business Model development which may lead to a Business Plan. But it all starts with an Idea!
Once we have an idea … • Is it viable? • Is it feasible? • If so, is there a business model that works in the marketplace where investment and sales are the currency. But even before that, we need to think about why!
Defining Your Business Model When management-types ask … "So what's your business model?" they really want an answer to a much more direct and basic question: "How do you plan to make money?"
Behind that question is a bunch of others • Who's your target customer? • What customer problem do you solve? • What value does your business deliver? • How will you reach, acquire, and keep customers? • How will you define and differentiate your offering, your value proposition? • How will you generate revenue? • What's your cost structure? • What's your profit margin?
Business Models Defined A business model describes the rationale of how an organization creates, delivers, and captures value. What is the business model for your startup?
Searching for a Business Model • Examples: • Fast Fermentation • BioCementTechnologies • MotoTrax • TimeStage • http://www.boardofinnovation.com/business-revenue-model-examples/
I. Customer Segments • For whom are we creating value? • Who are our most important customers?
I. Customer Segments • Customers are the heart of any business model. Without profitable customers, you won’t survive for long. • An organization must make a conscious decision about which segments to serve and which to ignore. • Once this decision is made, a business model can be designed around a strong understanding of specific customer needs.
Types of Customer Segments • Mass Market: Business models focused on mass markets don’t distinguish between Customer Segments. • Niche Market: Business Models targeting niche markets cater to specific, specialized Customer Segments. • Segmented: Some business models differentiate between market segments with slightly different needs and problems. • Diversified:An organization with a diversified business model serves two unrelated Customer Segments with very different needs and problems. • Multi-sided Platforms (or multi-sided markets): Some organizations serve two or more interdependent Customer Segments.
Your Key Customer • Who is your key ‘customer’? • Can you imagine others up or downstream from your primary ‘customer’?
II. Value Propositions • What value do we deliver to the customer? • Which one of our customer’s problems or needs are we solving? • What bundles of products/services do we offer to each Customer Segment?
Value Propositions (cont.) • Each Value Proposition consists of a selected bundle of products and/or services that caters to the requirements of a specific Customer Segment. • In this sense, the Value Proposition is an aggregation of benefits that a company offers customers. • Some value propositions may be innovative and represent a new or disruptive offer. Others may be similar to existing market offers, but with added features and attributes.
Value Propositions • Newness • Cell Phones or ‘ethical investment funds’ • Performance • Computers or Cars • ‘Getting the job done’ • Rolls Royce airplane engines • Design • Fashion, consumer products, or architecture • Brand or Status • Rolex or latest snowboard gear • Price • Southwest Air or ‘freemiums’ • Cost Reduction • Risk Reduction • Warranties, 3rd Parties. … • Accessibility • NetJets selling ‘time-share’ planes • Convenience / Usability • Apple sharing music across devices
Example: TekMarch Value Proposition TekMarchis an innovative solution to a problem with marching band music. Our product allows musicians to load parade and show music into their cellphones through our app and then link it to the TekMarch digital screen custom-mounted on their instruments. With TekMarch, the music is always in your pocket, always easily accessible -- but the real value-added is TekMarch’sability to hear and keep up with the music, eliminating the need to ever flip a page. TekMarch keeps players on the beat!
Your Value Proposition • What is the value proposition for your company? • What is the ‘bundle’ of benefits you offer to your customers?
III. Channels • The Channels building block describes how a company communicates with and reaches its Customer Segments to deliver a Value Proposition. • Communication, distribution, and sales Channels comprise a company’s interface with customers. • Channels are customer touch points that play an important role in the customer experience.
Your Channels? • How do you communicate your product/results to your customer segments to show that you deliver your value proposition? • What are your touch points, your interface with ‘customers’?
IV. Customer Relationships • What type of relationship does each of our Customer Segments expect us to establish and maintain with them? • How costly are they? • How are they integrated with the rest of our business model?
Categories of Customer Relationships • Personal Assistance: human interaction via point of sale, call centers, email, … • Dedicated Personal Assistance: customer rep assigned specifically to a customer. • Self-service: no direct relationship. Company provides the means for customers to help themselves. • Automated Service: more sophisticated form of self-serve; automated services tailored to individuals. • Communities: many firms utilize user communities to help each other, interact, and expand knowledge base. • Co-creation: Many now go beyond the traditional customer-vendor relationship to co-create value with customers. Amazon invites customer reviews; others invite customers to design products; youtube solicits content.
Your Relationships • You identified your customers but what kind of relationships do you maintain with them? • How do you communicate with them? • How much information / product do they want? • How close do they want to be? High-touch or more distant relationship?
V. Revenue Streams • For what value are our customers really willing to pay? • For what do they currently pay? • How much does each Revenue Stream contribute to overall revenues?
Your Revenue Streams • What are your revenue streams? One or multiple streams? • How secure are they? • How do you find new ones? And what will they need to give you more $$$? How do you ‘prove’ they should invest more in your operation?
VI. Key Resources • The Key Resources building block describes the most important assets required to make a business model work. Every business requires Key Resources. They are what we have to have. • They allow an enterprise to create and offer a value proposition, reach markets, maintain relationships with Customer Segments and earn revenues.
Key Resources (cont.) • Key resources can be physical, financial, intellectual, or human. • Key Resources can be owned, leased, or acquired from key partners. • Different Key Resources are needed depending on the type of business model.
Your Key Resources • What are the key resources in your operation? • Physical • Financial • Intellectual • Human
VII. Key Activities • The Key Activities building block describes the most important things a company must doto make its business model work. • Key Activities are required to create and deliver a Value Proposition, reach markets, maintain Customer Relationships, and earn revenues.
Key Activities (cont.) • Key Activities are different for different business model types. • For software maker Microsoft, Key Activities include software development. • For Walmart, Key Activities include supply chain management. • For consultant McKinsey, Key Activities include problem solving.
Your Key Activities • What are the key activities in your business? What is it you must do?
VIII. Key Partnerships • The Key Partnerships building block describes the network of suppliers and partners that make the business model work. • Companies increasingly create alliances to optimize their business models, reduce risk, or acquire resources.
