Speaker: Dr. Ajay Agrawal, Peter Munk Professor of Entrepreneurship, The Rotman School of Management For more information: http://www.marsdd.com/Events/Event-Calendar/Ent101/2007/businessmodel-20071219.html

2. ` Building a Business Model Presented by: Dr. Ajay Agrawal, Peter Munk Professor of Entrepreneurship, The Rotman School of Management 19, December 2007

3. The Entrepreneur’s Three Key Questions December 19, 2007 Entrepreneurship 101 @ MaRS Professor Ajay Agrawal Rotman School of Management ©2007 Ajay Agrawal

5. What’s my business? ©2007 Ajay Agrawal

7. What’s my business model? ©2007 Ajay Agrawal

13. Importance of Complementary Assets Excludability Low Low High High ©2007 Ajay Agrawal Compete (stealth strategy, Christensen, disk drives; disrupts existing industry leadership) Cooperate? (strategy: invest in reputation for trading in ideas; e.g., Cisco; formal organizations, e.g., ASCAP in music, TLOs in universities, VCs; reinforces existing industry leadership) Either Strategy (strategy: entrepreneur’s choice, relative returns from competition v. cooperation?; e.g., Xerox developed complete vertical chain versus Nintendo’s widespread licensing of software development tools) Cooperate (strategy: demonstrate value, attract multiple bidders; biotech/pharma; reinforces existing industry leadership)

14. What’s my pricing strategy? ©2007 Ajay Agrawal

17. Extension: Demand Curve What is the optimal price? Profit? ©2007 Ajay Agrawal

22. Extension: Demand Curve What is the optimal price? Profit? ©2007 Ajay Agrawal

23. Optimal (Single) Price (Profit = 225) ©2007 Ajay Agrawal

24. Profit Increase by Price Discrim. (Profit = 300) ©2007 Ajay Agrawal

27. End ©2007 Ajay Agrawal