This document summarizes a session on business model generation from a 10-week entrepreneurship course taught at Solvay Brussels School of Economics and Management. The session discusses defining customer segments, crafting a value proposition, selecting distribution channels, designing customer relationships, determining revenue streams, outlining key activities, identifying core resources, evaluating potential partners, and structuring costs. The business model canvas tool is introduced as a framework to conceptualize these key elements of a business model. Students are guided to design multiple business model options for their final course assignment.

1. www.solvayentrepreneurs.be
HOW TO DESIGN MY BUSINESS MODEL?
SESSION 4 (out of 10)
BUSINESS
MODEL
GENERATION
This session is part of a 10-weeks course
given to master students of the SOLVAY
BRUSSELS SCHOOL OF ECONOMICS
AND MANAGEMENT by professor Olivier
WITMEUR.

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• How to capture value?
• How to generate value?
QUESTIONS AGENDA RESOURCES
• Back to the previous session
• Introduction to Business
Model Generation
+ Exercises
• Your road to the final
assignment (intro)
• The business model canvas
Desired Outcomes of the Session

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BACK TO THE DESIGN
THINKING SESSION
#1

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Previous session was about Problem-Solution fit
How do people
feel?
What are their
problems/needs
(pains and gains)
Features of the
solution
Design of the
product or service
DESIGN CHALLENGE
EMPATHY MAP
BRAINSTORMING
PROTOTYPING & TESTS

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Another view on the design thinking process
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* Adapted from Tim Brown

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An alternative to empathy map: AEIOU Framework
Activities
– What are people doing?
Environment
– How are people using the environment
– What is the role of the environment
Interactions
– Do you see any routines?
– Do you observe special interactions between people? Between people & objects?
Objects
– What’s there and being used or not used?
– Describe engagement with objects
Users
– Who are the users? What are their roles?
– Look for extreme users
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Source: Doblin, Inc. by Rick Robinson and Stef Norvaisis

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BUSINESS MODEL
GENERATION
#2

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One bestseller…
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Definition
A business model is a conceptual tool that contains a set of elements and their relationships and allows
expressing a company's logic of earning money.
It is a description of
– the value a company offers
– to one or several segments of customers and
– the architecture of the firm and its network of partners for creating, marketing and delivering this
value and relationship capital,
– in order to generate profitable and sustainable revenue streams.
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4
MAIN
QUESTIONS

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4 Main questions = 4 Areas of the framework
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How?
How much?
Who?What?
The bundle of products &
services that create value
The different groups of people
or organizations an enterprise
aims to reach and serve, + the
tactic to reach them & to
develop relationships with them
The configuration of
resources, competences,
activities and partnerships to
create & deliver the value
The cash a company generates
from each Customer Segment
All costs incurred to operate a business model

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9
BUILDING
BLOCKS

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Customer segments
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Defining a Segment, often a Niche
Type of segments
• Mass Market
• Niche Market
• Segmented
• Diversified
• Multi-sided platform
• …
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Value Proposition
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Value Proposition
VP creates value for a Customer Segment through a distinct mix of elements catering to that segment’s
needs. Values may be quantitative or qualitative
Examples:
– Newness ... ?
– Performance … ?
– Customization … ?
– Design, Brand / Status … ?
– Price, Cost Reduction …
– Risk Reduction … ?
– Accessibility, Convenience, stability … ?
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Typical Value Propositions / Positionning
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* Treacy & Wiesema (1994) The Discipline of Market leaders

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Channels
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Channels
• Own vs Partners
• Direct vs Indirect
Examples
– Sales team
– Point of Sales, Shops…
– Two-tier retail
– Integrators, VAR’s (Value Added Resselers)
– Websites: dedicated or extisting market places
– OEM (Original Equipment Manufacturers)
– Franchise
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Customers Relationship
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Customers Relationship
• Personal assistance; human interaction, real customer representative, on- site at the point of sale, call
centers, e-mail, …
• Dedicated personal assistance: dedicating a customer representative specifically to an individual client.
• Self-service: no direct relationship with customers. It provides all the necessary means for customers to
help themselves.
• Automated services: customer self-service with automated processes.
• Communities: Increasingly, companies are utilizing user communities to become more involved with
customers/prospects and to facilitate connections between community members.
• Co-creation: More companies are going beyond the traditional customer-vendor relationship to co-
create value with customers.
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Get, Keep, Grow framework
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Channels + Customer Relations
=
Get-Keep-Grow
(see sessions on start and growth strategies)

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Revenues Mix
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Mixing Revenues
• Product sales
• Usage fees (e.g. Saas)
• Service fees
• Long term subscription / Renting
• Flat vs variable prices
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Key Activities
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Linking Value Proposition and Core Activities
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* Treacy & Wiesema (1994) The Discipline of Market leaders

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Key Resources
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VRIN Resources
Valuable (value generating)
Rare
Inimitable (isolating mechanism)
Non substituable (no subtitutes)
Example
– Know How, Patent…
– Brand
– Location
– Agreement
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Key Partners
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Typical partners
Specialized suppliers
Technology / IP owner
Franchiser
Financial partners
Key people
…
(can be a customer, a channel …)
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Cost structure
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Cost Dynamics
Opex vs Capex
Fix vs Variable costs
Direct vs Indirect Costs
Economy of scale?
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9 blocks to represent a business model
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* A. Osterwalder & Y. Pigneur, 2010

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‘The’ official Business Model Generation Canvas
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Back to the strategy course!
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Value Chain theory Blue Ocean Strategy
Strategic and
marketing
segmentation
Resources-based view
Strategic Alliances
Sourcing

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Typical (difficult) questions
Transactional vs Recurring revenues
Product vs Service
Niche vs Mass market
Capex vs Partnerships
Pick the right customer segment
Open vs Closed
Personal vs Automated
Physical vs Virtual
Direct vs Indirect sales
Fixed vs Variable costs
Tailor-made vs Mass production
…
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Different ways to start new venture
37
Starting from one idea
… but looking for a problem to solve
Starting from the customer
You know his/her problem
Starting from a unique resource
IP, Know-how, location…
Knowing of to optimize P&L

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DESIGN your business Model
Generate multiple options and test scenario.
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Make it also as creative as possible.
• Use brainstorming method
• What if …
– No internet
– Only mobile
– No frontiers
– …
• Post it are very flexible
• Drawing > Writing
• Diverge – Converge logic
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Example: Apple iPod/iTunes Business Model
Nespresso Business Model
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Additional comments
There are multiple other templates for designing business models / strategy.
The BMG tool has limitations, incl.
– Block definition is debatable.
• You sometimes have to merge or spilt some of them à Feel free to adapt
– Nothing about the environment
– Very little about the organization of the company
– Static tool? Use colors to explain development stages
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YOUR ROAD TO THE
NEXT ASSIGNMENT
#2
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The main steps towards your final project.
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VALUE
PROPOSITION
BUSINESS
MODEL
ROADMAP
Key activities,
resources & partners
Revenues model &
costs structure
Problem-Solution fit
Product-Market fit
Market sizing
Competition
Stages & milestones
Get-Keep-Grow
Risks & scenario
FINANCE
P&L, cash and
balance sheet
Financing
CREATE
TEST
LEARN
YOU

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NEVER STOP
WONDERING
&
ASKING!

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A real passion for entrepreneurship education and entrepreneurs.
• Student entrepreneurs: 2x
• Full time entrepreneur: once, in a team of 5
• Coach: 500+ projects over the last 20 years
• (Advisory) Board member in multiple new ventures
• Policy making: 2x
• Director of Solvay Entrepreneurs
• PhD in entrepreneurship in 2008
• … never as an investor
My wife (as Colombo), no kids, one dog (Vicky).
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Olivier Witmeur (Belgian, 46)

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Solvay entrepreneurs is the entrepreneurship center of the Université Libre de
Bruxelles. We support entrepreneurs through the development of their venture, from
an idea to a successful and sustainable business.
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Solvay Entrepreneurs

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