1. Business Model Canvas
- A one sheet summary of your venture -
Krishnan + Nag, IIMA CIIE, Sep „12

2. Story of the $5billion start-up

3. Cautionary tale

4. 1987 1990 1997 1998
$5.2b investment
Iridium Spun out Launch Bankrupt
15 rockets
founded of
72 satellites
Motorola

5. Target price: $7/min Viable price: $0.5/min
Target users: 42million Actual users: 30,000
1987 1990 1997 1998
$5.2b investment
Iridium Spun out Launch Bankrupt
15 rockets
founded of
72 satellites
Motorola

6. Traditional start-up model
Build product Big-Bang
Develop concept Build product Alpha /test
Alpha beta Customer
test Launch after
Shipment
Get funding and offering Market test
3 years
Write business plan
Build the product Test / fix Ship / fix
Planning / collateral PR / plan launch Launch /
Demand gen.
Initial sales rep Build sales team /
selling

7. “Big Up Front Design”
Develop concept Build product
Build product Alpha /test
Alpha beta Customer
Big-Bang
Get funding and offering test
Market test Shipment
Launch
Unbridled False sense of Rude Resetting Predictable
enthusiasm security awakening expectations disaster

8. The traditional methods of start-ups aren‟t working
90-95% of new ventures fail to meet projections
(assumptions up front, market contact at the end)

9. Story of the Rs. 500 start-up

10. Who is this legendary entrepreneur?
Karsanbhai Patel
Nirma

11. How do you compete with a Rs. 200cr brand?
Answer: Start on a bicycle!

12. Lessons from Karsanbhai and Nirma
Start with a strong vision, but start small
Clear value-prop for untapped segment
Constantly validate all assumptions in the market
Iterate and learn

13. 2 stages of start-ups
Search Scale
Focus on Focus on
Experimentation Execution
Source: Steve Blank

14. Finding your business model
Limited planning, more experimentation and exploration

15. Search Principle # 1: Business Model Canv
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS
PROPOSITION
KEY
RESOURCES CHANNELS
COST STRUCTURE REVENUE STREAMS
Source: “Business Model Generation”, Osterwalder & Pigneur

16. Search Principle #2: Minimum Viable Product
Minimum + Viable
Fertile area for new products
Minimum Viable
Too-basic products Incumbent
no one wants products

17. Excel competitor: Minimum Viable ?

18. Minimum Viable ?

19. Minimum Viable Product for Google Docs
Value
prop

20. Search Principle #3: Focus on exploration
Ideas
(BMC)
Learn Build
Minimise the total
time through the loop
Data
Offering
Measure

21. How it all fits together
Agile software development

22. BMC examples…

23. What are the children carrying?
Godrej ChotuKool

24. Vision: “Refrigeration for rural India”
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES PROPOSITION RELATIONSHIPS SEGMENTS
R&D Through
Microfinance PR retailers Indian
institutions Advertising Economical, households
effective, with income
Sarpanchs portable
KEY of
RESOURCES cooling CHANNELS Rs.10,000/m
solution o whom
Frugal Rural retailers
Village traditional
engineering (constraints of
electricity, ambassadors refrigerators
experts
space, cost don‟t serve
solved)
COST STRUCTURE REVENUE STREAMS
Factory, raw material, SG&A Unit sales

25. Competitive BMCs
vs.

26. Flipkart
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS
PROPOSITION
KEY
RESOURCES CHANNELS
COST STRUCTURE REVENUE STREAMS

27. Flipkart: “Online shopping for all Indians”
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS
• Supply chain optimisation PROPOSITION
Through email, online
Publishers • Delivery optimisation chat and database • Urban Indian
• SEO marketing
• Convenience book lovers
• Auto recommendations
• Wide selection
• Cheaper • Internet-
• Trust (CoD) connected
KEY people with no
RESOURCES CHANNELS
credit cards
• Delivery staff Web
• Technology • First-time
capability online
shoppers
COST STRUCTURE REVENUE STREAMS
Book sales
Technology, warehouses, deep discounts

28. Crossword
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS
PROPOSITION
KEY
RESOURCES CHANNELS
COST STRUCTURE REVENUE STREAMS

29. Crossword: “The best browsing
experience”
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS
• Sourcing PROPOSITION
In store, Crossword
• Publishers • Visual merchandising club
• Franchisees • Urban Indian
• Book reading sessions
• Shopper‟s Stop • Browsing book lovers
• Crossword Literary
(parent co) Award experience
• Instant gratification • Companies
KEY • Stationery
RESOURCES CHANNELS
buyers
• Real estate • Store
• Phone • Casual mall
• Web visitors
• Institutional
COST STRUCTURE REVENUE STREAMS
• Book • Coffee
Real estate, cost of inventory
sales • Trinkets
• Advertisin
g

31. Amul: “High-quality butter when you
desire it”
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS
• Brand building PROPOSITION
• Transactional
• Anand milk • R&D into preservation • Through mass
union • Mass market
media (customer:
• Gujarat milk • Guarantee of high
federation quality (brand) housewife)
• Access and
availability • Restaurants
KEY and institutions
• Convenience CHANNELS
RESOURCES
• Emotional value
• Anand milk union • Retail trade
• Direct (for
institutional sales)
COST STRUCTURE REVENUE STREAMS
• Product sales
Factory, equipment, inventory

32. Mid Day: “Evening gossip companion”
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS
• Brand building PROPOSITION
• Distribution • Transactional • Mumbai
• PTI, AP etc. • Deep multi-year
• Newsgathering English-
high-touch
• Light speaking mass
• Improving ABC numbers relationships market
entertainment
in key demographics after/during a busy • Office-goers
day • Commuters
KEY
• “2nd newspaper” CHANNELS
RESOURCES Advertisers +
• Journalists • Mumbai-wide • Railway platforms Agencies:
reach of readers in • Kirana shops • Mass market
• Salespeople with a relaxed context • Mumbai
media-planning in a unique time • Direct • Classified
knowhow window • Discount
COST STRUCTURE REVENUE STREAMS
• Retail offtake (5%)
Newsroom, newsprint
• Advertising (95%)

34. Khan Academy: “Education for everyone”
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS
• Pedagogy research PROPOSITION
Deep personalisation
• Gates • Content creation (automated) • School/college
Foundation • Content delivery
• Hardware • Comprehensive age students
• Business model
makers? world-class with
discovery
• Governments? lessons for free inadequate
• Volunteer access to
KEY school/college
translators • Personalised, self- CHANNELS
RESOURCES
directed learning
• Content creators • PC/tablet • Working
• Recommendation • Smartphone people with
engines etc. • Featurephone specialised
• Salman Khan – learning needs
personal brand
• School/college
students
COST STRUCTURE REVENUE STREAMS* seeking
• Certifications? • Placements? reinforcement
Hardware, bandwidth, content creation
• Advertising
*this could be a multi-sided market: students, advertisers, recruiters

35. Pivot / Course correction

36. Acknowledgements
www.businessmodelgeneration.com www.steveblank.com

37. Summary: why BMCs are important
Elevator pitch
Maximise time from mentors
Make minimum viable offering, learn, pivot, iterate
The foundation for your business plans

38. Continue the conversation…
knataraj@thoughtworks.com, nag@thoughtworks.com
LinkedIn: krishnan-natarajan, knagarjun