Startup Business Model - Business Yard - Business...

Understand the startup Cycle

Opportunities, Needs & Challenges

Prepared by:

Ahmed A. BARI

Startup Business Model

WHY DO YOU WANT TO START A BUSINESS?

Prepared By: Ahmed BARI

Startup Basic Needs

• Your own unique insights

• Large market opportunity

• Value Proposition (Good Product/Service)

• Ability to build a highly differentiated product (start by MVP)

• High qualified team

• Financial capability

• Capability to sell

• Be Realistic


STARTUP Start Decision

Research Phase Prepared By: Ahmed BARI

Start with a BIG idea

What’s your big idea?

• BIG Idea = Value Proposition & Market need

• More than a “me too” product or service

• Bill Gross – 42% of failures due to lack of market need

• Big idea also means targeting a huge market

• Capability to build a differentiated product

• Deep understanding of what exactly is the differentiator of your offering

Same – New/Better– Special/Different

Think aboutIdea weight in your startupIs your idea the main success factor?How to protect your idea?How to develop your idea? When?


Idea Generation


How you can get a great idea

Your own unique insight

Something that you have deeply

learnt/observed/experienced about

Market/Customer

Problem/Solution

Innovation

New Goods/Service (By2olak)

New Market/Customer (Uber)

New Business Model (Groupon)

Market Needs

Un-satisfaction

Shortage Problem

New Need

Hidden Needs

Do not imitate … InnovateThink Globally – Act Locally

Idea-generation tools1.Searching for shortage, dissatisfaction

Observing domestic and foreign markets (open eyes)

2.Recognizing mistakes, failures

From failure to the solution

3.Finding market niche, blue ocean

Where is a need for new invention with low competition

4.Studying trends

Political, economic, social, ecological, legal trends, Industry reports and trends


Idea Life Cycle


Business Model

A schematic model that helps us

gain the complete picture of an

organization business from a

high-level perspective.

A business model describes the

rationale of how an organization

creates, delivers and captures

value.

Any Problem can be made

clearer with a picturePrepared By: Ahmed BARI

Business Model Canvas


9 BMC basic building blocks

Customer segments: Who are the group of customers?

Value proposition: What is the offer for each customer segment?

Channels: How to reach each of the customer segments?

Customer Relationships: How to relate with customers over time?

Revenue streams: How to earn revenues?

Key resources: What assets are required to run the business?

Key activities: What are the important activities/processes?

Partner network: Who are the key partners and suppliers?

Cost structure: What are the important costs?


BMC Examples (How to read BMC?)


1- Customer Segmentation

Different groups of people or organizations an

enterprise aims to reach and serve …

CUSTOMER GROUPS …

Mass market (e.g., consumer electronics)

Niche market (e.g., supplier-buyer relationship)

Segmented (e.g., Baby industry)

Diversified (e.g., cloud computing)

Multi-sided (e.g., credit card)ups of people or organizations an enterprise aims to reach and serve

1


2- Value Proposition

A positioning statement that explains what benefits

you provide for WHO and How you do it uniquely well

Values may be…

Quantitative (e.g., Price, Speed of Service)

Qualitative (e.g., Design, Customer Experience)

Functional (e.g., Solve problem, Facilitate Task, Usability)

Social (e.g., Look Good, Gain Power, Status, Brand)

Emotional (e.g., Feel Good, Satisfaction, customization)Prepared By: Ahmed BARI

Customer Development vs. Product Development

Getting to know your customer

(even) better

Developing products & services

that have a much better fit with

the jobs and problems of these

customers

Instead of pushing a technology,

product or service that your

customers don’t use


Value Proposition Canvas

DESIGN Observe

Goal: Achieve Product to Market Fit

Absence of fit will lead to failure,

even for products with great technologies

or great products for the wrong customers.

Start from Customer Side to define his main

requirements (Customer Jobs)

Pains // NEED (Ranking // Weight – Frequency)

Gains // WANT (Ranking // Weight – Frequency)

Focus Group – Interviews - Questionnaire - Surveys

// Unhappy

a value proposition describes the benefits

customers can expect from a bundle of

products and services

Value Map Customer Profile



“Google is the world’s largest search engine that allows internet users to find relevant information quickly and easily.”

What is it?

For whom?

Values?

“Google is the world ’ s largest search engine that automatically provides

advertisers with potential customers tailored to the ad content, increasing click-

through rates and conversion rates.”

For _________________ (insert target customer)

Who _________________ (insert their need/problem)

We have developed _____________ (insert what it is)

That helps __________ _______ (list values)Prepared By: Ahmed BARI


Multiple FIT Fit Level Competition


3- Channels (Communications)

how an organization communicates with and reach

its customer segments to deliver a value proposition

Channels provide customer with…

An opportunity to KNOW, STUDY and evaluates the proposed value

The Facility to buy their chosen products & services

The value proposition.

After Sale Services.

Channels & Customer Relationships are directly linked to the HOW the

organization links to its customer segment.Prepared By: Ahmed BARI

Channels Phases

You should find the right

balance between the different

types of channels to integrate

them in a way to create a great

customer experience, and to

maximize revenue


Channels Types

FREE CHANNEL PAID CHANNEL SALES CHANNELMARKETING SALES


4- Customer Relationships

Types of relationships an organization establishes with

specific customer segments ….

Range from Personal to Automated … (GET – KEEP – GROW)

Types of customer relationship

Personal assistance (human interaction)

Dedicated personal assistance (customer representative)

Self-service (no direct relationship with customer)

Automated (self-service with automated processes)

Communities (connections between community members)

Co-creation (beyond the traditional customer-vendor

relationship to co-create values with)Prepared By: Ahmed BARI

5- Generate Revenue Streams

Asset sale

Usage fee

Subscription fees

Lending/Renting/Leasing

Licensing

Brokerage fees

Advertising

1.Transaction revenues resulting

from one-time customer payments

2.Recurring revenues resulting

from ongoing payments to either

deliver a Value Proposition to

customers or provide post-

purchase customer support

Price on Value NOT Cost Prepared By: Ahmed BARI

6- Key Resources

What infrastructure and resources do you need to

deliver what you promise?

Key Resources can be categorized as

follows

Physical (tools, space , locations, supply

Intellectual (license – Know How …etc.)

Personnel (qualifications, in-house or sub)

Financing

1

2 3

5

6

4

1

2 3

5

6


7- Key Activities

What major activities (deliverables) must be

produced – when and by who?

• dependencies

• responsibilities

Key Activities can be

categorized as follows

Production

Problem Solving

Platform/ Network

12 3

4

5

6

7


8- Key PartnersStrategic alliances between non-competitors

Partners such as Suppliers – Developers – Distributors

- Investors … etc.

Competition: strategic partnerships between competitors

Joint ventures to develop new businesses

Buyer-supplier relationships to assure reliable supplies

3 motivations for creating partnerships

Optimization and economy of scale

Reduction of risk and uncertainty

Acquisition of particular resources and activities

12 3

4

5

6

7


9- Cost Structure

What are the critical elements of

the cost structure?

Fixed costs

Variable costs

Resource, activity, partner costs

Infrastructure, operational, cost of

sales

Payroll costs, benefits, bonus structure,

taxes

What are the costs of each element

of the business model?

12 3

4

5

6

7


Staircase of Startup Success


Business Plan (Research Phase)

Prepared

for and by the founders to make a conscious decision on starting a new venture

for the investor to convince financing institutions or private investors

Note

It is a startup roadmap

Should consider startup KPIs

Should be updated


TIME

Idea weight in the startup

Idea is NOT the main success factor

If the Idea finding time is Perfect, Idea is Perfect (CHANGE Concept)

Idea vs. Time Too Early / Market does not need Early / Spend a lot in Marketing to explain the idea On Time / Perfect– Idea is known , Customers realize their needs, Not so

much Competitors Too Late / There are many competitors in the market and the niche

customer already gotExample: Youtube – Airbnb


Failure Reasons

Lack of Qualifications & Experiences

Research Phase Implementation Phase Operation Phase Organization CHANGE


STARTUP Fetal Mistakes Idea is not always the winner … “it’s not about innovation, it’s about implementation,”

“Great entrepreneurs are really good at implementing small changes to existing ideas.”

Stop hiring people like yourself

Technical success is not the main success

No Need for new partners or co-founder

No Need for VCs funds

Marketing (Online – Offline)

Sustainability vs. Growth

Start with a solution Then try to find the customer/market

Customer Development vs. Product Development

Product-market fit – MVP (Prototype)

Be Realistic ….

Knowing how long to persevere

When to give upPrepared By: Ahmed BARI

Success Equation

Success Equation =

SUM (Success Factors) - SUM (Failure Reasons)

There is no recipe for success, just some well known ingredients

No Guru can you make you successful

All you learn from ‘Startup Gurus’ is their experiences

Everyone has to walk their own path

All what someone could help is, give you a new perspective


THANK YOU

Ahmed A. BARIwww.linkedin.com/in/ahmedbari

http://www.linkedin.com/in/ahmedbari

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