Etpl business model canvas workshop oct 2016
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Business model canvas workshop
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Semelhante a Etpl business model canvas workshop oct 2016
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Etpl business model canvas workshop oct 2016
- 1. October 2016 2016 Business model canvas workshop What do investors look for in a business plan? Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division
- 2. 2 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division About the facilitator • Wharton MBA • JP Morgan – Vice President - IB Technology, Global Markets Internet Marketing • Parallax Capital Management – Co-founder and MD - Venture Capital • Extream Ventures – Co-founder and MD - S$20 million VC fund • Expara – Founder and MD - IDM Ventures Incubator, fund, advisory, training • NUS – Adjunct Associate Professor, Business School, Entrepreneurship • Sasin – Visiting Professor, Venture Capital
- 3. 3 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Business model canvas workshop 12:00 PM Key elements for success - value proposition and innovation 1:30 PM Break 1:45 PM Key elements for success - competitive analysis and strategy 3:15 PM Break 3:30 PM Fund raising and financial plan 5:30 PM End
- 4. 4 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division From Idea to Investment • Key elements for success • Financial plan and fundraising
- 5. 5 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Key elements for success • Develop an innovative product – Innovation • Solve a problem for customers – Value proposition • Identify your customers – Market identification and analysis • Reach your customers – Marketing strategy • Compete when others enter - Sustainable competitive advantage • Make money – Business model and financial plan • Team – A team or B team
- 6. 6 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Problem Solution Key Metrics Cost drivers Revenue model Value proposition and innovation Sustainable competitive advantage Channels Customer segments Market size Customer archetype High concept Existing solutions Top 1-3 customer problems How are these problems solved today? Your solutions to customer problems Key numbers that tell if you are succeeding What is innovative about your solution? Why are you better than existing solutions? One sentence that says it all How will you create barriers to entry for followers? How will you get your product to customers? Who are your target customers? How big is your market and how fast is it growing? Characteristics of your key customers How do you generate revenue? What are your key cost drivers? Expara Business Model Canvas
- 7. 7 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Why is biotech unlike any other? • Lean startup does not apply to biotech • Can’t develop new drug, biologic or medical device, market it immediately to the public, and later make small adjustments • Most highly regulated industry • Development to fundraising can take three to 10 years • For companies that succeed, the revenues and profits far exceeds other sectors • Immensely gratifying • You have to sell the science
- 8. 8 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Key differences between tech and biomed plans Value of IP Regulatory approval Marketing strategy Time to market Business model Valuation model Exit strategy Risk Scale of financing Factors Bio-tech Med-tech Product Tool How different is it from tech plans? Low Somewhat High
- 9. 9 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Questions to answer • Innovation • Value proposition • Market identification and analysis • Marketing strategy • Sustainable competitive advantage • Financials
- 10. 10 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Don’t go too early or too late Measure of performance Measure of effort invested The technology adoption S curve
- 11. 11 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Value proposition and innovation 1. What is the painful problem you are solving for customers? How painful is that problem (cancer vs flu)? 2. What is your product and what is innovative about it? 3. What are the shortfalls of the current solutions? 4. How do you solve this problem and can you quantify your benefit? 5. How does your innovation enable you to accomplish this?
- 12. 12 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Diamond Rio versus iPod
- 13. 13 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Disruptive business model or disruptive tech • Diamond is the first mover in portable MP3 in 1998 • Apple enters in 2003 and captures 90% of the market • Business model innovation – hardware + software + service
- 14. 14 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Business model innovation: Gillette to Google • Gillette – razor and blade • Southwest Airlines – budget airlines • Dell Computer – mass customization • Charles Schwab – on-line broker • Amazon – ecommerce • eBay – peer to peer marketplace • Google – search-based advertising
- 15. 15 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Market identification and analysis 1. Who is your customer? 2. How big is your market and how fast is it growing? – Top-down approach – Bottom-up approach 3. What trends in your market are favourable for you? – Technological, social, demographic, regulatory 4. Who are your direct and indirect competitors? 5. How is your market segmented?
- 16. 16 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Top-down revenue projections Total addressable market Target market Target segment Market share
- 17. 17 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Bottom-up revenue forecasts
- 18. 18 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Marketing strategy 1. How is your product differentiated from your competitors’ product? Use a comparison matrix to illustrate. 2. What is your position in the market? Use a positioning map or Blue Ocean Strategy canvas to illustrate 3. What are your price, place, product, promotion and initial sales plans 4. What is your tagline?
- 19. 19 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Comparison matrix Competitor 1 Competitor 2 Competitor 3 Competitor 4 Your company Benefit 1 Benefit 2 Benefit 3 Benefit 4 Benefit 5 Benefit 6
- 20. 20 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Positioning map Portability Value Competitor 2 Your company Competitor 1 Competitor 3 Competitor 4
- 21. 21 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Blue Ocean strategy canvas www.blueoceanstrategy.com
- 22. 22 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division iPod strategy map
- 23. 23 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Sales and distribution • Great sales and distribution vs great product • Best sales is hidden • Products don’t sell themselves
- 24. 24 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Metrics for effective distribution • CLV: total net profit earned over the course of relationship with customer • CAC: cost to acquire a new customer • CLV>CAC
- 25. 25 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Sustainable competitive advantage 1. How will you compete with small followers? 2. How will you compete with large companies who decide to move into your space? 3. What is your IP strategy? 4. What are your competitive strategies to create barriers to entry?
- 26. 26 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division First-mover advantages and disadvantages • Reputation • Preempting positioning • Switching costs/Lock-in/Network effects • Unique channel access • Move down learning curve • Favorable access to inputs • Definition of standards • Institutional barriers – IP protection Advantages • Pioneering costs • Demand uncertainty • Changes in buyer needs • Specificity of investments to early generations • Technological discontinuities • Low-cost imitation Disadvantages
- 27. 27 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Established company strengths and weaknesses • Learning curve • Reputation effect • Cash flow • Economies of scale • Complementary assets Advantages • Difficult to innovate • They need to satisfy existing customers, partners and supply chain • Existing organizational structure is appropriate to current tasks • Risk aversion Weaknesses
- 28. 28 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Opportunities that favor new firms • Existing firms frozen in the headlights • Disruptive technologies and business models • Uncertainty: existing firms’ advantages in market research are neutralized; risk propensity • Technologies: Discrete versus systemic technologies, based on human capital, general purpose rather than specific • Bad customers: Enter market that is unattractive to existing competitors due to established cost structure
- 29. 29 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Regulatory approval for drug development Drug discovery and pre- clinical Phase I Phase II Phase III NDA/BLA 3.5 years 1 year 2 years 3 years 1-2 years Success rates: 30% 70% 70% 80% Financing required: $250K to $1.5M $2M to $20M $20M to $100M
- 30. 30 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division From Idea to Investment • Key elements for success • Financial plan and fundraising
- 31. 31 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division In the financial section of the business plan 1. Business model – Revenue model – Cost structure 2. Financial projections 3. Valuation 4. Funding required and equity offered 5. Use of Proceeds 6. Exit Strategy and ROI
- 32. 32 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Elements of a business model • Revenue models • Cost structures
- 33. 33 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Differences in business models Biotech Tool platform Hybrid Product - virtual Med tech Similar to tech Revenue drivers and cost drivers
- 34. 34 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Biotech- product business model Product One- product Platform Drug discovery Licensing Commercialization In-house Partner Pricing & positioningAlternative GenericsDiscount Premium Research & manufacturing In-house Virtual
- 35. 35 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Biotech business models Advantages Disadvantages Tool platform Generate revenues early Lower returns No need for regulatory approval Hybrid (best of both worlds? Balance of risk and return Spread of resources thinly Generate revenues early Lack of strategic focus Product High returns Scale of financing No revenue generation High risk Time to commercialization/time to exit?
- 36. 36 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Differences in valuation models Biotech Product: Simulation (incorporate DCF)/real option valuation Hybrid: DCF and simulation (incorporate DCF)/real option valuation) Tool Platform: Simulation (incorporate DCF)/real option valuation Med tech Similar to tech valuation models Discounted Cash flow (DCF)
- 37. 37 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Calculate investor’s ROI including dilution
- 38. 38 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Stages and sources of funds Founder’s Capital Seed/ Angel Series A, B, C Mezzanine Pre-Exit Exit VC hurdle rates 60-100% 40-60% 20% OM F,F&F Incubators corporations government Customers, suppliers, strategic partners VCs, Banks for VC loans R&D Establishment GTM/Rollout Accelerated Expansion Maturity Enablement growth
- 39. 39 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Value inflection points in biotech- product Early – Clearly articulated strategy – Team – The key IP – Initial proof-of-concept Later – IND-enabling studies – Clinical safety – Clinical proof-of-concept – Phase 3 – Market validation
- 40. 40 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Differences in exit strategy for biotech - product • Biotech companies can exit via IPO without revenues • Tesaro, Kythera and Intercept are companies that hit the public market during their phase III program in 2012 • Tetraphase also exited via a $75 million IPO in 2013
- 41. 41 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Cap table
- 42. 42 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Key elements of a term sheet • Board of directors • Protective provisions • Drag-along agreement • Conversion Control • Price-per-share • Valuation • Amount of financing • Liquidation preference • Vesting • Options pool • Anti-dilution • Pay-to-play Economics
- 43. 43 6XXXX Douglas Abrams Workshop organized by ETPL’ Investment and Spin-off Management Division Contact us • Douglas Abrams • Expara Pte. Ltd. • dka@expara.com • www.expara.com • 65-6323-3084, 65-9780-5381 (hp) • Block 71 Ayer Rajah Crescent, #02-10/11 Singapore 139951