Entrepreneurship Lesson 6
Agenda • Topics: • Review Entrepreneurship • Building a Business • Creating your Business Model • Case Study: Angry Birds • Activity: Create your team’s Business Plan
What does it take to build aprofitable business? Review page 18 of the workbook for a list of terms. Elements of a business plan: Value Proposition Market Size Revenue Streams Cost structure Distribution Channels
Case Study: Angry Birds Angry Birds – a mobile phone application puzzle game
Value Proposition What value do we deliver to the customer? Which one of your customer’s problems are you helping to solve?
Angry Birds:Value for users Angry Birds frees people from boring situations and provides entertainment
Value Proposition Example Value propositions look like this: For target customer who statement of the need or opportunity, (product/service name)is product categorythat statement of benefit.
Market Size You want to build a business where there are enough people who would buy the product to make you money. These can be both paying and non-paying customers.
Angry Birds:Market Size Entertainment through games Multiple versions available Accessible on different platforms
Revenue Streams • Paid Apps • Advertising and • In-game purchases
Angry Birds: Revenue Streams Advertising Paid application In-app purchase Angry Bird merchandise
Cost Structure Think-Pair-Share What are the most important costs in your business? If you were to turn this app into a real business, what else would you have to pay for?
Angry Birds: Cost Structure • The game took $122,880 to program in total • Pay a cost to platforms • Operations: • Rent for office building • Raw materials for merchandise • Salaries for Employees • Computers and Development Software • Source: http://www.wired.co.uk/magazine/archive/2011/04/features/how-rovio-made-angry-birds-a-winner?page=all
Distribution Channels How are you reaching your customers? Which ones work best? Which are the most cost-efficient?
Angry Birds:Distribution Channels December 2009, Angry Birds hit the App Store Apple App Store, Android Market, Angry Birds Website, Facebook platform, Roku platforms Stores for Angry Bird merchandise
Business Model Summary Value Propositions Market Size Revenue Streams Cost structure Distribution Channels
Activity: Business Model Record your ideas in pages 19-20 of the workbook • In your workbook, write down the following: • What is your target market? • How big is your market? • What will your revenue streams be? • Cost Structure? • Distribution Channels?
Task List Complete the business model for your app. You’ll need it to finalize your business plan. Continue to work on the functionality of each individual screen in your prototype, starting with the easiest components.
Name_____________________________ Project____________________________ ➊ ➍ ➌ ➒ ➋ Top 3 problems Top 3 features Single, clear, compelling message Why you are different & worth buying. Can't be easily copied or bought. Target Customers ➑ ➎ Path tocustomers Activity that drives retention/revenue. Alternatives ➐ ➏ Customer Acquisition Costs Distribution Costs Hosting People, etc. Revenue Model Lifetime value Revenue Gross Margin
Business Model Canvas • WHAT is the Problem You’re Trying to Solve • WHO Has the Problem • HOW • How do you solve this problem? • How big is the market? • How are you going to reach the customer? • How do you drive demand? • How will you make money?
Resources • 10 Qualities of Successful Entrepreneurs (and How to Nurture Them in YOU)http://www.heartofgoldgirls.com/2013/01/10-qualities-of-successful-entrepreneurs-and-how-to-nurture-them-in-you-3/ • Starting a Business in 2014 (Yes, YOU!)http://www.heartofgoldgirls.com/2013/12/getting-start-ground-2014/ • 5 Essential Rules for App Idea Generationhttp://www.codenutz.com/5-essential-rules-for-app-idea-generation/ • 10 Practical Techniques for Generating App Ideashttp://www.codenutz.com/10-techniques-generating-app-ideas/ • Creating a Business Model Canvas For An Apphttp://www.codenutz.com/creating-lean-canvas-app/ • Marketing Your App With a Website: How to Get Startedhttp://blog.sensortower.com/blog/2013/07/24/marketing-your-app-with-a-website-how-to-get-started/?utm_content=bufferb7e6a&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer