University of DaytonFLYER PITCH Competition Business Models for your entry www.GO.UDAYTON.EDU/UDBPC
Quick Def: Ecosystem • It is all the steps required to get a product to market. • From manufacturing to warehouse to retail to the customer to installation and training • Example: Apple has spawned an entire ecosystem that supports the iPhone • Retailers, apps, accessories
A Business Model explains how you make money on a solution • Each piece of the ecosystem has costs/revenues—which are yours?
Five main areas of a Business Model Content Creation/Design Physical Creation End Customer Sales & Support Admin Content/Service Distribution
All five get done—you don’t have to do all five! • It’s called a “make/buy” decision; you can do it yourself or outsource it to someone • “Fully integrated” doing all five steps yourself • “Boutique” doing just one step • Search: Lay out the make buy at each step and change one at a time—it should lead to 20 different business models
Decisions to make in a Business Model • Produce, License or outsource? • Bundle or stand-alone? • Sell directly to end customers or to Goodyear? • Sell directly or to retailers (or even wholesalers) • On-line, Bricks and Mortar? • Can we outsource the admin of the company?
We have been using the word sell, any other models to think about? • Lease stems to Goodyear? • Give them away—someone else’s promotion? • Sell ads (weak on this idea) • Let customers re-sell them on to friends • Charge someone else for them
Look for products in a market failure • Buyers and sellers cannot come together for some reason • You bring them together • Create a marketplace • Buy from sellers, transport to buyers • Consignment • Hired gun for buyers • Sell expertise in grading quality of stuff to be bought • Arrange logistics between buyer and seller • Arrange financing • Ask these questions of your product/service too!
Heroin Business Model • Give away the product for now, then charge later
Bundled goods • King Gillette gave away razors and sold blades • HP sells printers at a loss and marks up toner • Toner cloner
What makes for a good business model in the judge’s eyes? • Simple enough business you can make it work • Adds value in the ecosystem so others members of the ecosystem benefit • Not a commodity product • Same crafts at 100 booths at the Pork Festival • Overcomes market failure problems • Serves a niche
Advice in your application • Be clear what steps you perform and which you outsource • Show where you intend to charge for revenue • Talk about any additional revenues or variations on sales