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BOOTSTRAPYOUR BUSINESS MODEL
Business Agility on the Back of a Napkin
1@berniemaloney
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2
Let’s start here…
SO, WHAT IS ABUSINESS MODEL?
@berniemaloney
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SO, WHAT IS ABUSINESS MODEL?
Better yet…
3@berniemaloney
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EXPLAIN YOUR BUSINESS(MODEL) TO A NEIGHBOR
Exercise
2 min each in pairs
4@berniemaloney
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HOW MANY COULD ACCURATELYDESCRIBE THEIR NEIGHBOR’S BUSINESS?
5@berniemaloney
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OR, WAS YOUR EXPERIENCE LIKE THIS?
6@berniemaloney
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NO BUSINESS PLAN SURVIVES FIRST CONTACT WITH A CUSTOMER
Steve Blank
7@berniemaloney
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PLANS ARE WORTHLESS,BUT PLANNING IS EVERYTHING
Dwight D. Eisenhower
8@berniemaloney
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HOW COULD WEDRINK OUR OWN CHAMPAGNE?
Build
Measure
Learn
9@berniemaloney
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ANY PROBLEM CAN BE MADE CLEARER WITH A PICTURE
Dan Roam
10@berniemaloney
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Dan also wrote an earlier, worthwhile book: The Back of the Napkin
11@berniemaloney
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HOW CAN A BUSINESS BE PICTURED?
http://youtu.be/QoAOzMTLP5s
12@berniemaloney
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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
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WHY IS A MODEL SIGNIFICANT?
14@berniemaloney
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WHY IS A MODEL SIGNIFICANT?DESIGN THINKING
15@berniemaloney
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DESIGN THINKING
• Freezing an idea early risks falling in love with it
• Refining an idea quicklyrisks become attached (sunk cost)
• Objective:Defer judgment & emphasize crude prototypes to help avoid these pitfalls
• Example:IDEO - an illustration of Design AND Agilehttp://youtu.be/M66ZU2PCIcM
16@berniemaloney
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WHY IS A MODEL SIGNIFICANT?
17@berniemaloney
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Build
Measure
Learn
18@berniemaloney
Lean Startup / Eric Ries: Build-Measure-Learn
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A MODEL MIGHT LOOK GREAT ON PAPER…
19@berniemaloney
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… REMEMBER IT’S A SET OF HYPOTHESES
guess
20@berniemaloney
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Build
Measure
Learn
21@berniemaloney
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COST PER TEST / LESSONS = ?
22
http://www.automobilesreview.com/uploads/2012/09/Mercedes-Benz-SLS-AMG-Coupe-Electric-Drive-651.jpg
@berniemaloney
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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
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HOW ABOUT AN EXAMPLE?
24@berniemaloney
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HOW ABOUT AN EXAMPLE?
25
Better yet…
@berniemaloney
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BUS 15 @ STANFORD
26
Experiencein ProductManagement& 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…
GuestSpeakers
Curious aboutProd Mgt &/orAgile
Very Early Entrepreneurs
Live Class
Relationship
Channel Experienced &want increased results
Live Class
direct
Personal(vs automated)
Resources
Activities
BrandRoomsEquipment
Marketing
Experience
@berniemaloney
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BUS 15 @ STANFORD
27
Experiencein ProductManagement& 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…
GuestSpeakers
Curious aboutProd Mgt &/orAgile
Very Early Entrepreneurs
Live Class
Relationship
Channel Experienced &want > resultsLive Class
direct
Personal(vs automated)
Resources
Activities
BrandRoomsEquipment
Marketing
How could inspect/adapt be applied?
Experience
@berniemaloney
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HOW ABOUT…?
28
Experiencein ProductManagement& 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…
GuestSpeakers
Curious aboutProd Mgt &/orAgile
Very Early Entrepreneurs
Live Class
Relationship
Channel Experienced &want > resultsLive Class
direct
Personal(vs automated)
Resources
Activities
BrandRoomsEquipment
Marketing
Experience
Experienceat Stanford
@berniemaloney
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OTHER VALUES OF THE BM CANVAS
• Ecosystems Win
– Microsoft Office
– iTunes
– Search + Ads
• Canvas Maps an EcosystemFits a single visual field = shifts brain processes
• Looks at Market & Opportunityover chasing a competitor’s ‘tail lights’
29@berniemaloney
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Ready for a Group Exercise?
30
Partners Offer Key Customers
What we ‘get’What it ‘costs’
Relationship
ChannelResources
Activities
@berniemaloney
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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
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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
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INSIGHTS: CREATING A BUSINESS MODEL
@berniemaloney 33
http://www.garabatosydibujos.com/wp-content/uploads/2015/01/conocer.jpg
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This is a crude prototype
34
Partners Offer Key Customers
What we ‘get’What it ‘costs’
Relationship
ChannelResources
Activities
@berniemaloney
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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
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THERE ARE NO FACTS IN THE BUILDING…SO GET OUT AND TALK TO CUSTOMERS
Steve Blank
36@berniemaloney
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CUSTOMER DEVELOPMENT
CustomerDiscovery
CustomerValidation
CustomerCreation
CompanyBuilding
pivot
37
Source: Steve BlankThe Four Steps to the Epiphany
@berniemaloney
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TWO PHASES
CustomerDiscovery
CustomerValidation
CustomerCreation
CompanyBuilding
pivot
Search Execution
38@berniemaloney
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ENLIGHTENED TRIAL & ERROR SUCCEEDS OVER THE PLANNING OF LONE GENIUS
Peter Skillman
39@berniemaloney
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APPLY THE SCIENTIFIC METHOD: RUN EXPERIMENTS
test
40@berniemaloney
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WITH VALIDATION, ITERATE (PIVOT) MODEL AND RUN FURTHER EXPERIMENTS
valid
41@berniemaloney
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PIVOTING:LEARNING CHEAPLY FROM FAILURE
42@berniemaloney
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Build
Measure
Learn
43@berniemaloney
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THE WAY TO SUCCEED IS TO DOUBLE YOUR FAILURE RATE
Thomas Watson
Founder of IBM
44@berniemaloney
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HP MEDIASMART (RETAIL) TVS
45
AmericanBrand
CircuitCity
Cost-plus Mat’l; Design; Supply Chain; Placements
Asian TV BrandYou know
Partners Offer Key Customers
RevenuesCostsJust enough to break even at intro,Not enough to sustain price drops
CinemaNow
Best Buy
Relationship
Channel
Direct
Direct B2C
Indirect B2B2C
Resources
Activities
GlassTV KnowHow
MicrosoftInternetContent
Asian TV BrandNew to USA
Netflix
RetailElectronics
Leading EdgeInternet TV
KnownBrand
IPTV VisionaryAdopters
Manufacturing
Set Devel’mnt
Licensing
Volume Retail
futureproofing
@berniemaloney
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HP COMMERCIAL TVS
46
AmericanBrand
HP Sales
Cost-plus Mat’l; Design; Supply Chain;
Asian TV BrandYou know
Partners Offer Key Customers
RevenuesCostsSustainable Margin
CDW
Relationship
Channel
Direct B2B
Indirect B2B2B
Resources
Activities
GlassTV KnowHow
Asian TV BrandNew to USA
CommercialSuppiers
KnownBrand
Manufacturing
Set Devel’mnt CompetivePrice
Direct HPAccounts
@berniemaloney
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VIZIO TVS (2006)
47
AmericanBrand
Costco
Competitive Mat’l; Design; Supply Chain;
Asian TV BrandYou know
Partners Offer Key Customers
RevenuesCostsSustainable MarginSustainable Volume
Relationship
Channel
Direct
Direct B2C
Indirect B2B2C
Resources
Activities
GlassTV KnowHow
Asian TV BrandNew to USA
WarehouseClubs
ValuePricingManufacturing
Set Devel’mnt
ValueBuyers
@berniemaloney
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LAYERING IN MARKET RESEARCH
48
Partners Offer Key Customers
RevenuesCosts
Relationship
ChannelResources
Activities
RetailElectronics
Leading EdgeInternet TV
IPTV VisionaryAdopters
ValueBuyersCommercial
Suppiers
ValuePricing
1Ks
100s@1Ks
10s@1Ks
1M+
@berniemaloney
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PIVOTS ARE BUSINESS MODEL CHANGES WITHOUT CRISIS
Steve Blank
49@berniemaloney
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CustomerDiscovery
CustomerValidation
CustomerCreation
CompanyBuilding
pivot
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Test & Adapt the model until you can prove it works
@berniemaloney
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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
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Build
MeasureLearn
Release
Measure
Earn $
Noted by Jeff Patton (Aug ‘12 DFWScrum)52@berniemaloney
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CustomerDiscovery
CustomerValidation
CustomerCreation
CompanyBuilding
pivot
Search Execution
53
MVP PMF
@berniemaloney
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EXERCISE: BUSINESS MODEL CREATION
• Form Teams
• Product: Biodegradable Bag(ok for fertilizer)
• 5 minutes:Create (at least 1) business model
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Want a model comparison?
@berniemaloney
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BASIC SANITATION
55
Image Source: http://www.whale.to/a/bangladesh.html
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ACCESS TO SANTIATION
• 4 out of 10 people lack even simple latrines(2.6 billion people)
• A solution?
56@berniemaloneyhttp://greenupgrader.com/files/2009/04/peepoo6.jpg
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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
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WHO / WHERE ELSE COULD USE THIS?
58
Partners Offer Key Customers
What you ‘get’What it ‘costs’
Relationship
ChannelResources
Activities
@berniemaloney
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MULTIPLE MODELS FOR 1 PRODUCT
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This is a crude prototype of a business
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Partners Offer Key Customers
What we ‘get’What it ‘costs’
Relationship
ChannelResources
Activities
@berniemaloney
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MULTIPLE MODELS FOR 1 PRODUCT
61@berniemaloney
Want another Group Exercise?
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EXERCISE: BUSINESS MODEL CREATION
• Form Teams
• Product: Coffee
• 7 minutes:Create a business modelAND 3 “systems” Testsof PMF
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http://www.thecoffeebeanshop.com/images/CoffeeBeanCloseup6beansR.jpg
@berniemaloney
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BUSINESS MODEL CANVAS
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Partners Offer Key Customers
What you ‘get’What it ‘costs’
Relationship
ChannelResources
Activities
Source:http://www.businessmodelgeneration.com/downloads/business_model_canvas_poster.pdf
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INSIGHTS: CREATE + TEST A BUSINESS MODEL
@berniemaloney 64
http://www.garabatosydibujos.com/wp-content/uploads/2015/01/conocer.jpg
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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?
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http://upload.wikimedia.org/wikipedia/commons/4/4f/Pike_Place_Market_-_Starbucks_circa_1977A.jpg
@berniemaloney
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http://www.alfredhoesliag.ch/typo3temp/pics/20bc77213a.jpg
@berniemaloney
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ALTERNATIVE: LEAN CANVAS
68
http://practicetrumpstheory.com/the-10x-product-launch/
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http://practicetrumpstheory.com/the-10x-product-launch/
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BUSINESS VALUE CANVAS
70
Partners Offer Key Customers
What you ‘get’What it ‘costs’
Relationship
ChannelResources
Activities
@berniemaloney
gains
pains
customerjobs
gaincreators
painrelievers
products & services
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EXTENDING THE BUSINESS MODEL CANVAS
71@berniemaloney
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BUSINESS TO CONSUMERB2C
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BUSINESS TO BUSINESS TO CONSUMERB2B2C
73@berniemaloney
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OR AN ENTIRE VALUE CHAIN
74@berniemaloney
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OR MULTIPLE MODELS FOR 1 PRODUCT
75@berniemaloney
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ARE PRODUCTS THIS EASY TO ITERATE?
76@berniemaloney
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WHICH ONE(S) BEST FIT MARKET?
77@berniemaloney
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CustomerDiscovery
CustomerValidation
CustomerCreation
CompanyBuilding
pivot
78
Each Experiment amounts toan (Agile) Iteration of
the Businessthe Ecosystem
@berniemaloney
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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
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FAIL OFTEN,IN ORDER TO SUCCEED SOONER
IDEO
80@berniemaloney
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FINUt Prosim. Namaste.
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@berniemaloney 82
Bernie Maloney, CSPPE, CSM, CSPO
bit.ly/speedmygenius
Agile CoachAccelerating Genius
Turning Strategies into ResultsFrom Startup to Beyond $100M