1. So, what is a business model,
and how do I build one?
Presentation to BA World - Ottawa
November 2010
Michael Lachapelle
2. 3
Objectives
core characteristics of a
business model
9 essential questions to ask
yourself about a business model
2 approaches to building a
business model
11. How you make
money
(Intervista Training)
The theory
of your
business
(Peter Drucker)
Stories to
explain how the
enterprise works
(John Magretta)
The profit
formula
How your
processes
work
What do you mean when you say “Business Model”
Some see it at a high-level Some see it at a low-level
Some as a combined elements
Strategy and
organization
Technology
enabling
transactions
12. If not those things, then what is a “Business Model”
It is a way to look at the key elements of
how a business:
creates value
delivers value to its customers/clients
captures return value
in a systematic way.
15. The ask:
$500,000 for 20% equity
Company valued at $2.5M
The pitch:
6 months to market
first year sales - 350
only adjustable type of chair
no competitor
lighter, more agile
almost half the cost
The Dragon’s Den and the wheelchair
39. Finding a repeatable pattern to tell the story & analyse the business model
Alexander
Osterwalder
Mark
Johnson
40. www.businessmodelgeneration.com
The Business Model Canvas
For what value are our customers really willing to pay?
For what do they currently pay?
How are they currently paying?
How much does each Revenue Stream contribute to
overall revenues?
Through which Channels do
our Customer Segments
want to be reached?
How are our Channels
integrated?
Which ones work best?
Which ones are most cost-
efficient?
How are we integrating them
with customer routines?
What type of relationship
does each Customer
Segments expect us to
establish and maintain?
Which ones have we
established?
How are they integrated
with the rest of our
business model?
How costly are they?
For whom are we
creating value?
Who are our most
important
customers?
How do we
differentiate our
Customer Segments
What value do we
deliver to the
customer?
Which one of our
customer’s problems
are we helping to
solve?
Which customer needs
are we satisfying?
What Key Activities do our
Value Propositions
require?
Our Distribution Channels?
Customer Relationships?
Revenue streams?
Who are our Key
Partners?
Who are our key
suppliers?
Which Key Resources
are we acquiring
from partners?
Which Key Activities do
partners perform?
What Key Resources do
our Value Propositions
require?
Our Distribution
Channels? Customer
Relationships?
Revenue Streams?
What are the most important costs inherent in our
business model?
Which Key Resources are most expensive?
Which Key Activities are most expensive?
Alexander Osterwalder
41. www.businessmodelgeneration.com
The Business Model Canvas
For what value are our customers really willing to pay?
For what do they currently pay?
How are they currently paying?
How much does each Revenue Stream contribute to
overall revenues?
Through which Channels do
our Customer Segments
want to be reached?
How are our Channels
integrated?
Which ones work best?
Which ones are most cost-
efficient?
How are we integrating them
with customer routines?
What type of relationship
does each Customer
Segments expect us to
establish and maintain?
Which ones have we
established?
How are they integrated
with the rest of our
business model?
How costly are they?
For whom are we
creating value?
Who are our most
important
customers?
How do we
differentiate our
Customer Segments
What value do we
deliver to the
customer?
Which one of our
customer’s problems
are we helping to
solve?
Which customer needs
are we satisfying?
What Key Activities do our
Value Propositions
require?
Our Distribution Channels?
Customer Relationships?
Revenue streams?
Who are our Key
Partners?
Who are our key
suppliers?
Which Key Resources
are we acquiring
from partners?
Which Key Activities do
partners perform?
What Key Resources do
our Value Propositions
require?
Our Distribution
Channels? Customer
Relationships?
Revenue Streams?
What are the most important costs inherent in our
business model?
Which Key Resources are most expensive?
Which Key Activities are most expensive?
Alexander Osterwalder
Q1Q2
Q3
Q4
Q5
Q6
Q7
Q8
Q9
42. Customer-value Proposition
Profit Formula
Key Resources Key Processes
www.seizingthewhitespace.com
The Four-Box Business Model Framework
Mark W. Johnson
• Job-to-be-done by customer
• Offering to satisfy need
• Customer satisfaction
• Revenue model (price X
quantity)
• Cost structure - direct, indirect,
overhead, economies of scale
• Target unit margin - achieving
desired profit levels
• Resource velocity - throughput,
inventory turnover, asset
utilization
• People
• Technology
• Equipment
• Channels
• Partnerships
• Brand
• Processes
• Business Rules
• Success metrics
• Behavioural
norms
43. Customer-value Proposition
Profit Formula
Key Resources Key Processes
www.seizingthewhitespace.com
The Four-Box Business Model Framework
Mark W. Johnson
• Job-to-be-done by customer
• Offering to satisfy need
• Customer satisfaction
• Revenue model (price X
quantity)
• Cost structure - direct, indirect,
overhead, economies of scale
• Target unit margin - achieving
desired profit levels
• Resource velocity - throughput,
inventory turnover, asset
utilization
• People
• Technology
• Equipment
• Channels
• Partnerships
• Brand
• Processes
• Business Rules
• Success metrics
• Behavioural
norms
Q1 Q2
Q3
Q4Q5
Q6 Q7
Q8
Q9
44. The Business
Model Canvas
The 4-box
Framework
Individual
components
Composite
component
s
Simple Detailed
Adaptable Focussed
Open Guided
Q - how are these approaches different
45. 3
Objectives
A business model describes and contains the
core elements of how a business creates,
delivers and captures value
9 essential questions:
2 approaches:
Business model canvas
4-box framework
What is our customer’s job-to-be-done
What need of theirs are we satisfying
How will we interact with them
How and how much will they pay
What are the key things to be done
What are the key resources we need
Who will help
How do we help our customers
48. If you wish to use material from this
presentation please observe the
rules of creative commons licensing.
Content and development support provided by:
Dr. Alexander Osterwalder, PhD
Web site: www.businessmodelalchemist.com/
Content and development support provided by:
Dr. Alexander Osterwalder, PhD
Web site: www.businessmodelalchemist.com/
For further information, discussion you can contact me at:
(w) mike.lachapelle@tbs-sct.gc.ca
(h) michaell@magma.ca
For further information, discussion you can contact me at:
(w) mike.lachapelle@tbs-sct.gc.ca
(h) michaell@magma.ca
For more information on the business model canvas - and a pdf download of 70
pages of the book go to:
Business Model Generation book: www.businessmodelgeneration.com
For more information on the business model canvas - and a pdf download of 70
pages of the book go to:
Business Model Generation book: www.businessmodelgeneration.com
For more information on the the 4-box business model framework go to:
Seizing the White Space | Business Model Innovation for Growth and Renewal:
http://www.seizingthewhitespace.com/
For more information on the the 4-box business model framework go to:
Seizing the White Space | Business Model Innovation for Growth and Renewal:
http://www.seizingthewhitespace.com/