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BOOTSTRAP
YOUR BUSINESS MODEL
Business Agility on the Back of a Napkin
1@berniemaloney
2
Let’s start here…
SO, WHAT IS A
BUSINESS MODEL?
@berniemaloney
SO, WHAT IS A
BUSINESS MODEL?
Better yet…
3@berniemaloney
EXPLAIN YOUR BUSINESS
(MODEL) TO A NEIGHBOR
Exercise
2 min each in pairs
4@berniemaloney
HOW MANY COULD ACCURATELY
DESCRIBE THEIR NEIGHBOR’S
BUSINESS?
5@berniemaloney
OR, WAS YOUR EXPERIENCE LIKE THIS?
6@berniemaloney
NO BUSINESS PLAN SURVIVES FIRST
CONTACT WITH A CUSTOMER
Steve Blank
7@berniemaloney
PLANS ARE WORTHLESS,
BUT PLANNING IS EVERYTHING
Dwight D. Eisenhower
8@berniemaloney
HOW COULD WE
DRINK OUR OWN CHAMPAGNE?
Build
Measure
Learn
9@berniemaloney
ANY PROBLEM CAN BE MADE
CLEARER WITH A PICTURE
Dan Roam
10@berniemaloney
Dan also wrote an earlier, worthwhile book:
The Back of the Napkin
11@berniemaloney
HOW CAN A BUSINESS BE
PICTURED?
http://youtu.be/QoAOzMTLP5s
12@berniemaloney
BUSINESS MODEL CANVAS
13
Partners Offer Key Customers
What you ‘get’What it ‘costs’
Relationship
ChannelResources
Activities
Source:
http://www.businessmodelgeneration.com/downloads/business_model_canvas_poster.pdf
@berniemaloney
WHY IS A MODEL SIGNIFICANT?
14@berniemaloney
WHY IS A MODEL SIGNIFICANT?
DESIGN THINKING
15@berniemaloney
DESIGN THINKING
• Freezing an idea early
risks falling in love with it
• Refining an idea quickly
risks become attached (sunk cost)
• Objective:
Defer judgment & emphasize crude prototypes to
help avoid these pitfalls
• Example:
IDEO - an illustration of Design AND Agile
http://youtu.be/M66ZU2PCIcM
16@berniemaloney
WHY IS A MODEL SIGNIFICANT?
17@berniemaloney
Build
Measure
Learn
18@berniemaloney
Lean Startup / Eric Ries: Build-Measure-Learn
A MODEL MIGHT LOOK GREAT ON
PAPER…
19@berniemaloney
… REMEMBER IT’S A SET OF HYPOTHESES
guess
20@berniemaloney
Build
Measure
Learn
21@berniemaloney
COST PER TEST / LESSONS = ?
22
http://www.automobilesreview.com/uploads/2012/09/Mercedes-Benz-SLS-AMG-Coupe-Electric-Drive-651.jpg
@berniemaloney
COST PER TEST / LESSONS = ?
23
http://image.internetautoguide.com/f/auto-news/2010-mercedes-amg-sls-crash-test-videos/31178790/mercedes-sls-amg-crash-test-video-germany-tuv.jpg
@berniemaloney
HOW ABOUT AN EXAMPLE?
24@berniemaloney
HOW ABOUT AN EXAMPLE?
25
Better yet…
@berniemaloney
BUS 15 @ STANFORD
26
Experience
in Product
Management
& Agile
Silicon Valley
Prepare outline; develop materials;
coordinate efforts; time to teach…
Stanford
Partners Offer Key Customers
What we ‘get’What it ‘costs’
Feedback; fresh perspective; resume
enhancer; honorarium; contacts…
Guest
Speakers
Curious about
Prod Mgt &/or
Agile
Very Early
Entrepreneurs
Live Class
Relationship
Channel Experienced &
want increased
results
Live Class
direct
Personal
(vs automated)
Resources
Activities
Brand
Rooms
Equipment
Marketing
Experience
@berniemaloney
BUS 15 @ STANFORD
27
Experience
in Product
Management
& Agile
Silicon Valley
Prepare outline; develop materials;
coordinate efforts; time to teach…
Stanford
Partners Offer Key Customers
What we ‘get’What it ‘costs’
Feedback; fresh perspective; resume
enhancer; honorarium; contacts…
Guest
Speakers
Curious about
Prod Mgt &/or
Agile
Very Early
Entrepreneurs
Live Class
Relationship
Channel Experienced &
want > resultsLive Class
direct
Personal
(vs automated)
Resources
Activities
Brand
Rooms
Equipment
Marketing
How could inspect/adapt be applied?
Experience
@berniemaloney
HOW ABOUT…?
28
Experience
in Product
Management
& Agile
East Bay Area
Prepare outline; develop materials;
coordinate efforts; time to teach…
Berkeley
Partners Offer Key Customers
What we ‘get’What it ‘costs’
Feedback; fresh perspective; resume
enhancer; honorarium; contacts…
Guest
Speakers
Curious about
Prod Mgt &/or
Agile
Very Early
Entrepreneurs
Live Class
Relationship
Channel Experienced &
want > resultsLive Class
direct
Personal
(vs automated)
Resources
Activities
Brand
Rooms
Equipment
Marketing
Experience
Experience
at Stanford
@berniemaloney
OTHER VALUES OF THE BM CANVAS
• Ecosystems Win
– Microsoft Office
– iTunes
– Search + Ads
• Canvas Maps an Ecosystem
Fits a single visual field = shifts brain processes
• Looks at Market & Opportunity
over chasing a competitor’s ‘tail lights’
29@berniemaloney
Ready for a Group Exercise?
30
Partners Offer Key Customers
What we ‘get’What it ‘costs’
Relationship
ChannelResources
Activities
@berniemaloney
EXERCISE: BUSINESS MODEL CREATION
• Form Teams
• Product:
Biodegradable Bag
(ok for fertilizer)
• 5 minutes:
Create (at least 1)
business model
31
http://www.naparecycling.com/uploads/plastic%20bag.png
@berniemaloney
BUSINESS MODEL CANVAS
32
Partners Offer Key Customers
What you ‘get’What it ‘costs’
Relationship
ChannelResources
Activities
Source:
http://www.businessmodelgeneration.com/downloads/business_model_canvas_poster.pdf
@berniemaloney
INSIGHTS: CREATING A BUSINESS MODEL
@berniemaloney 33
http://www.garabatosydibujos.com/wp-content/uploads/2015/01/conocer.jpg
This is a crude prototype
34
Partners Offer Key Customers
What we ‘get’What it ‘costs’
Relationship
ChannelResources
Activities
@berniemaloney
EXERCISE: BUSINESS MODEL CREATION
• Form Teams
• Product:
Biodegradable Bag
(ok for fertilizer)
• 5 minutes:
Create (at least 1)
business model
35
How could you “unit test” the product?
@berniemaloney
THERE ARE NO FACTS IN THE BUILDING
…SO GET OUT AND TALK TO
CUSTOMERS
Steve Blank
36@berniemaloney
CUSTOMER DEVELOPMENT
Customer
Discovery
Customer
Validation
Customer
Creation
Company
Building
pivot
37
Source: Steve Blank
The Four Steps to the Epiphany
@berniemaloney
TWO PHASES
Customer
Discovery
Customer
Validation
Customer
Creation
Company
Building
pivot
Search Execution
38@berniemaloney
ENLIGHTENED TRIAL & ERROR
SUCCEEDS OVER THE PLANNING OF
LONE GENIUS
Peter Skillman
39@berniemaloney
APPLY THE SCIENTIFIC METHOD:
RUN EXPERIMENTS
test
40@berniemaloney
WITH VALIDATION, ITERATE (PIVOT)
MODEL AND RUN FURTHER EXPERIMENTS
valid
41@berniemaloney
PIVOTING:
LEARNING CHEAPLY FROM FAILURE
42@berniemaloney
Build
Measure
Learn
43@berniemaloney
THE WAY TO SUCCEED IS TO
DOUBLE YOUR FAILURE RATE
Thomas Watson
Founder of IBM
44@berniemaloney
HP MEDIASMART (RETAIL) TVS
45
American
Brand
CircuitCity
Cost-plus Mat’l; Design; Supply Chain;
Placements
Asian TV Brand
You know
Partners Offer Key Customers
RevenuesCosts
Just enough to break even at intro,
Not enough to sustain price drops
CinemaNow
Best Buy
Relationship
Channel
Direct
Direct B2C
Indirect B2B2C
Resources
Activities
Glass
TV KnowHow
Microsoft
Internet
Content
Asian TV Brand
New to USA
Netflix
Retail
Electronics
Leading Edge
Internet TV
Known
Brand
IPTV Visionary
Adopters
Manufacturing
Set Devel’mnt
Licensing
Volume Retail
future
proofing
@berniemaloney
HP COMMERCIAL TVS
46
American
Brand
HP Sales
Cost-plus Mat’l; Design; Supply Chain;
Asian TV Brand
You know
Partners Offer Key Customers
RevenuesCosts
Sustainable Margin
CDW
Relationship
Channel
Direct B2B
Indirect B2B2B
Resources
Activities
Glass
TV KnowHow
Asian TV Brand
New to USA
Commercial
Suppiers
Known
Brand
Manufacturing
Set Devel’mnt Competive
Price
Direct HP
Accounts
@berniemaloney
VIZIO TVS (2006)
47
American
Brand
Costco
Competitive Mat’l; Design; Supply Chain;
Asian TV Brand
You know
Partners Offer Key Customers
RevenuesCosts
Sustainable Margin
Sustainable Volume
Relationship
Channel
Direct
Direct B2C
Indirect B2B2C
Resources
Activities
Glass
TV KnowHow
Asian TV Brand
New to USA
Warehouse
Clubs
Value
PricingManufacturing
Set Devel’mnt
Value
Buyers
@berniemaloney
LAYERING IN MARKET RESEARCH
48
Partners Offer Key Customers
RevenuesCosts
Relationship
ChannelResources
Activities
Retail
Electronics
Leading Edge
Internet TV
IPTV Visionary
Adopters
Value
BuyersCommercial
Suppiers
Value
Pricing
1Ks
100s
@1Ks
10s
@1Ks
1M+
@berniemaloney
PIVOTS ARE BUSINESS MODEL
CHANGES WITHOUT CRISIS
Steve Blank
49@berniemaloney
Customer
Discovery
Customer
Validation
Customer
Creation
Company
Building
pivot
50
Test & Adapt the model
until you can prove it works
@berniemaloney
HOW TO PROVE IT WORKS?
• MVP
– Minimum Viable Product
– Sale of a Product (it’s viable!)
• PMF
– Product Market Fit
– Is it the right customer segment?
– Is the segment sustainable?
– Is the product / model sustainable?
51@berniemaloney
Build
Measure
Learn
Release
Measure
Earn $
Noted by Jeff Patton (Aug ‘12 DFWScrum)
52@berniemaloney
Customer
Discovery
Customer
Validation
Customer
Creation
Company
Building
pivot
Search Execution
53
MVP PMF
@berniemaloney
EXERCISE: BUSINESS MODEL CREATION
• Form Teams
• Product:
Biodegradable Bag
(ok for fertilizer)
• 5 minutes:
Create (at least 1)
business model
54
Want a model comparison?
@berniemaloney
BASIC SANITATION
55
Image Source: http://www.whale.to/a/bangladesh.html
@berniemaloney
ACCESS TO SANTIATION
• 4 out of 10 people lack even simple latrines
(2.6 billion people)
• A solution?
56@berniemaloney
http://greenupgrader.com/files/2009/04/peepoo6.jpg
PEEPOO BAG
• Single use toilet bag
• Self sanitizing
• Low production cost
• Biodegradable – turns into fertilizer
• (initially) targeted at poor people
• People already pay for sanitation
57@berniemaloney
WHO / WHERE ELSE COULD USE THIS?
58
Partners Offer Key Customers
What you ‘get’What it ‘costs’
Relationship
ChannelResources
Activities
@berniemaloney
MULTIPLE MODELS FOR 1 PRODUCT
59@berniemaloney
This is a crude prototype of a business
60
Partners Offer Key Customers
What we ‘get’What it ‘costs’
Relationship
ChannelResources
Activities
@berniemaloney
MULTIPLE MODELS FOR 1 PRODUCT
61@berniemaloney
Want another Group Exercise?
EXERCISE: BUSINESS MODEL CREATION
• Form Teams
• Product:
Coffee
• 7 minutes:
Create a business model
AND 3 “systems” Tests
of PMF
62
http://www.thecoffeebeanshop.com/images/CoffeeBeanCloseup6beansR.jpg
@berniemaloney
BUSINESS MODEL CANVAS
63
Partners Offer Key Customers
What you ‘get’What it ‘costs’
Relationship
ChannelResources
Activities
Source:
http://www.businessmodelgeneration.com/downloads/business_model_canvas_poster.pdf
@berniemaloney
INSIGHTS: CREATE + TEST A BUSINESS MODEL
@berniemaloney 64
http://www.garabatosydibujos.com/wp-content/uploads/2015/01/conocer.jpg
EXERCISE: BUSINESS MODEL CREATION
• Form Teams
• Product:
Coffee
• 5 minutes:
Create (at least 1)
business model
65
http://www.thecoffeebeanshop.com/images/CoffeeBeanCloseup6beansR.jpg
@berniemaloney
Want a model comparison?
66
http://upload.wikimedia.org/wikipedia/commons/4/4f/Pike_Place_Market_-_Starbucks_circa_1977A.jpg
@berniemaloney
67
http://www.alfredhoesliag.ch/typo3temp/pics/20bc77213a.jpg
@berniemaloney
ALTERNATIVE: LEAN CANVAS
68
http://practicetrumpstheory.com/the-10x-product-launch/
69
http://practicetrumpstheory.com/the-10x-product-launch/
BUSINESS VALUE CANVAS
70
Partners Offer Key Customers
What you ‘get’What it ‘costs’
Relationship
ChannelResources
Activities
@berniemaloney
gains
pains
customer
jobs
gain
creators
pain
relievers
products
& services
EXTENDING
THE BUSINESS MODEL CANVAS
71@berniemaloney
BUSINESS TO CONSUMER
B2C
72@berniemaloney
BUSINESS TO BUSINESS TO CONSUMER
B2B2C
73@berniemaloney
OR AN ENTIRE VALUE CHAIN
74@berniemaloney
OR MULTIPLE MODELS FOR 1 PRODUCT
75@berniemaloney
ARE PRODUCTS THIS EASY TO ITERATE?
76@berniemaloney
WHICH ONE(S) BEST FIT MARKET?
77@berniemaloney
Customer
Discovery
Customer
Validation
Customer
Creation
Company
Building
pivot
78
Each Experiment amounts to
an (Agile) Iteration of
the Business
the Ecosystem
@berniemaloney
IF YOU DON’T WORK UNDER TIME
CONSTRAINTS, YOU COULD NEVER GET
ANYTHING DONE. IT’S A MESSY
PROCESS, IT COULD GO ON FOREVER.
Dave Kelley
79@berniemaloney
FAIL OFTEN,
IN ORDER TO SUCCEED SOONER
IDEO
80@berniemaloney
FIN
Ut Prosim. Namaste.
@berniemaloney 81
@berniemaloney 82
Bernie Maloney, CSP
PE, CSM, CSPO
bit.ly/speedmygenius
Agile Coach
Accelerating Genius
Turning Strategies into Results
From Startup to Beyond $100M

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