tag:blogger.com,1999:blog-3983951918434996132024-02-20T16:35:50.548-08:00Startup ModelingTaking entrepreneurs from 0 to 1!Anonymoushttp://www.blogger.com/profile/00941483969538885294noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-398395191843499613.post-76973928076883391732015-06-04T16:05:00.000-07:002015-06-04T16:16:47.736-07:00The REAL EntrepreneursFeeling inspired... :-)<br />
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When I think of an entrepreneur, I either think of someone who made a big exit, a talked about IPO or is a real-estate investor. Don't know why, but that's the connotation I have.<br />
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Over the past few years, friends of mine, who have gone through various Tel Aviv accelerators, struggled, kicked, pushed and shoved their way through to a seed investment and a round A. I am humbled by their perseverance, tenacity and sheer will power to get it through. This includes 1 or 2 pivots, hustling their way through bridge investments or angel investors. Truly amazing.<br />
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But I'm not here to talk about that now. I'm here to talk about some other guys and gals. Every time I meet these people, I am at awe and yesterday was no different. These guys rock. They are the corner stone of entrepreneurship in my mind. These guys hustle and push through almost any barrier, political, physical, financial or whatever.<br />
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If they need something or a budget for something and don't get it, they get a sponsor for it. They GET STUFF DONE!<br />
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They run the programs we all like, they find those first-timer entrepreneurs, run those hackathons, run demo days, promote collaboration between cities, countries and organizations and do they do this with little to no budget. Truly amazing. Best Ops people around!<br />
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<b>The REAL Entrepreneurs!</b></h2>
Yesterday I met <a href="https://www.linkedin.com/profile/view?id=278579798" target="_blank">Tair Kowalsky</a>, Head of the <a href="https://www.facebook.com/herzliyaacceleratorcenter?fref=ts" target="_blank">Herzliya Accelerator Center (HAC)</a>. I was blown away by the sheer passion, energy and desire to create and grow a local entrepreneurship center in Herzliya. What a pleasure.<br />
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<img height="361" src="https://scontent-fra3-1.xx.fbcdn.net/hphotos-xap1/v/t1.0-9/10917278_811592562221623_6187779019999134385_n.jpg?oh=1ade79328fe2b2fdd3932ecf2090c826&oe=56035E38" width="640" /><br />
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Herzliya is a beautiful small city in the northern part of the Tel Aviv district with approx. 110,000 people.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjIryLTd-wRaSLD-WDFd3GyiVes43asrjjeNDV179aDS21q3oxqFy4YDG0DoaTCKtz31hRPeVF-g1e44QbpMLZaW00en-Wt5Wu68crgyMlaN5p7FpY9hLInnwgKvUiGL74tItpLYL4qtK5Z/s1600/MWSnap201.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em; text-align: right;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjIryLTd-wRaSLD-WDFd3GyiVes43asrjjeNDV179aDS21q3oxqFy4YDG0DoaTCKtz31hRPeVF-g1e44QbpMLZaW00en-Wt5Wu68crgyMlaN5p7FpY9hLInnwgKvUiGL74tItpLYL4qtK5Z/s1600/MWSnap201.png" /></a><a href="http://www.haaretz.com/polopoly_fs/1.563817.1387184268!/image/3882221854.jpg_gen/derivatives/landscape_640/3882221854.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" src="http://www.haaretz.com/polopoly_fs/1.563817.1387184268!/image/3882221854.jpg_gen/derivatives/landscape_640/3882221854.jpg" height="231" width="400" /></a><br />
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HAC and Me</h2>
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I'm always looking for ways to help out with entrepreneurs and startups. I love working with them one-on-one and also share some of my passion re: startup business modeling and go-to-market strategy. There are so many things one needs to consider when starting or pushing through the early stages of a new venture. I am sure I can help them out.</div>
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I met with Tair, hoping to collaborate with the upcoming wave of entrepreneurs. Exciting times.</div>
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Entrepreneurship Starts at Home</h2>
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Thinking about it now, this is just awesome.</div>
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Israel is the '<b>Startup Nation</b>' alright and now it finally hit me. There are SO MANY entrepreneurship programs, funding, classes, events, lectures, workshops etc. that it blows my mind. It's bound to generate many ventures and startups. On top of that you have all these accelerators, incubators and HUBs.</div>
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I mean think about it, there is so much support for people trying to create something valuable or actually trying to change the world. So much money is poured into these organizations. Actually, there are so many non-profit programs and institutions as well, so people can go ahead and start something from almost anywhere in Israel. This is just beautiful.</div>
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Now I was born in <b>Haifa, </b>which is the north of Israel. Not the far north, but north enough ;-), they too, have a <b>Youth Center</b>. <a href="http://www.haifa24.co.il/">http://www.haifa24.co.il/</a>. Young individuals in Haifa are considered to be between the ages of 18 and 40. I now live in <b>Ramat Gan</b> with my wife and 2 year old dog. Just last month, they opened a new Youth Center as well called the <b>2nd Floor </b><a href="http://www.koma2.co.il/">http://www.koma2.co.il/</a>. Exciting times. I will follow up and see how we can start-up an entrepreneurship HUB or center in Ramat Gan as well.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjsjhQcys1pZYud3H7pwA9pzKbXYNi9Hky6dKTpUAKlM4Wlxrl7W0M6kiZ-b4ATPPGARVHeI5rFaZwqN1HpThkS46on8K5Q7wIfWXKfGhxMXexCz2XV-4KH-ccCch0wX38a2TuNRpfSi6Ma/s1600/MWSnap204.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="281" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjsjhQcys1pZYud3H7pwA9pzKbXYNi9Hky6dKTpUAKlM4Wlxrl7W0M6kiZ-b4ATPPGARVHeI5rFaZwqN1HpThkS46on8K5Q7wIfWXKfGhxMXexCz2XV-4KH-ccCch0wX38a2TuNRpfSi6Ma/s640/MWSnap204.png" width="640" /></a></div>
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<b>Ramat Gan </b>is another city bordering Tel Aviv to the east. It has approx. 150,000 people.</div>
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<img alt="Ramat Gan skyline, with the Moshe Aviv Tower and Diamond Exchange District" src="http://upload.wikimedia.org/wikipedia/commons/thumb/9/93/Tel_Aviv_20.05.11_006.jpg/800px-Tel_Aviv_20.05.11_006.jpg" height="480" width="640" /></div>
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Until next time...Anonymoushttp://www.blogger.com/profile/00941483969538885294noreply@blogger.com0tag:blogger.com,1999:blog-398395191843499613.post-21732893475801063742015-05-07T17:59:00.000-07:002015-05-08T09:23:56.228-07:00What Would Uber's Business Model Look Like if Travis Used the Lean Canvas?<div style="text-align: left;">
The story of Uber is an amazing one. Where experience and knowledge brings great success. Don't be fooled though, with great success, comes great changes along the way. Little did Travis Kalanick know, how this would turn out.</div>
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<img height="250" src="https://d1a3f4spazzrp4.cloudfront.net/web-fresh/home/heros/home-hero-3-1440-900.jpg" width="400" /></div>
<div style="text-align: center;">
<i>Source: <a href="https://www.uber.com/fr/" target="_blank">Uber</a></i></div>
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In my latest lectures, I use Uber as an example to illustrate the lean canvas. I figured it's time to dig deep into Uber's written history and put things right.<br />
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So here goes.<br />
<br />
First, a refresher of the Lean Canvas which I'll use as a guide for the break-down.<br />
<div style="text-align: center;">
<img src="http://www.ashmaurya.com/wp-content/uploads/2012/02/leancanvas-608x516.png" height="339" width="400" /></div>
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<br />
<b>Back to the Future</b><br />
Okay, so we have a Delorian and Marty McFly lives around the corner from our house. Perfect!<br />
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<img src="http://ecx.images-amazon.com/images/I/91mRbaBaGML._SL1500_.jpg" height="265" width="400" /></div>
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Let's turn the dial back to late 2008, reach 88 miles per hour (142 km an hour) :-) and watch the magic happen. Whenever I say this line in my head, I get a huge grin on my face... you know what I mean.<br />
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It's a cold and rainy night in Paris in the late 2008. Two entrepreneurs visiting the <a href="http://leweb.co/" target="_blank">LeWeb</a> digital innovation conference sat together until 5am bouncing ideas on what should be the next big thing. These guys were <b><a href="https://www.linkedin.com/in/garrettcamp" target="_blank">Garrett Camp</a></b> and <b><a href="https://www.linkedin.com/pub/travis-kalanick/0/6/3" target="_blank">Travis Kalanick</a></b>.<br />
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<b>Garret </b>co-founded <b>StumbleUpon</b> - a website/content discovery platform, bought by Ebay in March 2007 for $75m dollars. <b>Travis </b>founded <b>Red Swoosh</b> - a P2P (peer to peer) client-side platform, whicwh was sold sold to Akamai in April 2007 for $20m.<br />
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Garrett's great idea was to try and fix the taxi problem in San Francisco.<br />
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<b>Uber's FIRST Lean Canvas</b><br />
<b><br /></b>
<b>1. Problem</b><br />
<u>Passengers</u><br />
Getting stranded on the streets of San Francisco<br />
Hailing a cab with your hand<br />
You have to stand outside, rain, wind, snow, sleet<br />
Calling a taxi dispatch requires waiting 20 minutes<br />
Lots of friction and time wasted making a cab transaction (cash, no credit card etc)<br />
<br />
<u>Drivers</u><br />
Drivers are often out of work<br />
Relying on a centralized dispatch for customers<br />
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<b>2. Customer Segments</b><br />
<u>Passengers</u><br />
Passengers who likes to travel in style<br />
Comfort is important<br />
Convenience is critical<br />
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<i>-- Early adopters --</i><br />
Tech scene people (entrepreneurs, investors, advisors, start-up employees etc)<br />
* Reasons: (1) Leverage the network effect in the launch city (San Francisco), (2) Fueling word of mouth growth through the Bay Area early adopting techset<br />
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<u>Drivers</u><br />
Average cab driver in the Bay Area<br />
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<b>3. Unique Value Proposition (USP)</b><br />
<u>Passengers</u><br />
Roll in style, comfort and convenience<br />
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<div style="text-align: center;">
<img src="http://ventureburn.com/wp-content/uploads/2013/09/Uber2.jpg" height="189" width="400" /></div>
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<u>Drivers</u><br />
Additional source of income<br />
Reliable ordering and transaction services<br />
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<b>4. Solution</b><br />
<u>Passengers</u><br />
A limo timeshare service called "UberBlacks"<br />
An iPhone app for ordering limos<br />
An Android app for ordering limos<br />
An SMS ordering service<br />
A Website<br />
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<i>-- Top features --</i><br />
Charging via CC<br />
Driver rating<br />
Mileage tracking<br />
Trip history<br />
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<div style="text-align: center;">
<img height="344" src="https://s.yimg.com/cd/resizer/2.0/FIT_TO_WIDTH-w500/449be151bb6c58c6846bd121d84ae31157ef2987.jpg" width="400" /></div>
<div style="text-align: center;">
<i>Source: <a href="https://www.yahoo.com/tech/uber-delivering-fellow-startups-mattresses-in-new-york-95845980359.html" target="_blank">Yahoo</a></i></div>
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<u>Drivers</u><br />
An iPhone app for receiving orders and fullfilling them<br />
An Android app for receiving orders and fullfilling them<br />
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<b>5. Channels</b><br />
<u>Passengers</u><br />
Founders friends<br />
PR<br />
Sponsoring tech events<br />
Free rides for VC event attendees (they are highly likely to share their experience with tech friends)<br />
Early adopter blogs<br />
Early adopter social media<br />
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<u>Drivers</u><br />
Direct sales<br />
Word of mouth<br />
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<b>6. Revenue Streams</b><br />
<u>Passengers</u><br />
Cost per ride ($8 base rate, $5 additional for every mile, $15 minimum)<br />
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<u>Drives</u><br />
% of fare<br />
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<b>7. Cost Structure</b><br />
Wages (GM, CEO)<br />
Technology and infrastructure (App, web, SMS: maintenance)<br />
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<b>8. Key Metrics</b><br />
Daily active riders<br />
Total daily rides made<br />
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<div style="text-align: center;">
<img src="http://blogs-images.forbes.com/briansolomon/files/2015/05/uber-stats-5.png" height="284" width="400" /></div>
<div style="text-align: center;">
<i>Source: <a href="http://candydirectnews.com/the-numbers-behind-ubers-exploding-driver-force/" target="_blank">candydirectnews</a></i></div>
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<b>9. Unfair Advantage</b><br />
Founders are successful entrepreneurs (each had exited a company)<br />
Access to immediate funds (via founders)<br />
<br />
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<b>Conclusion</b><br />
If we model Uber's idea using the Lean Canvas, we see a very simple solution to a very common need / problem. This first iteration of the canvas is of course the <b>first version</b>. What is required now is to continue drilling down deeper into specific niches and sub-segments and refine the solution and proposition accordingly.<br />
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One additional thing to point out is that the canvas is a tool for modeling <b>Business Models. </b>Obviously, there might be several business models, and if we look at uber.com today, we can see a variety of models addressing different needs for different segments. But you have to start somewhere.<br />
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<b>Go-To-Market Strategy</b><br />
Let's now reverse engineer the go-to-market strategy Uber followed to reach where it's at today. I'll start off with what I call "<b><i>From Phase 0 to Phase 1</i></b>". Phase 0 refers to day 0 of the creation of the start-up and phase 1 refers to the launch day of the newly tested and qualified product or service.<br />
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<b>Phase 0 - Planning</b><br />
In this phase, it's essential to truly test the following <b>four </b>building blocks. The pilot will only end when these 4 building blocks are determined.<br />
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1 - There is a <b>real problem</b> <b>or need</b><br />
2 - The <b>product or service solves </b>the problem or provides value to a need<br />
3 - An <b>attractive market </b>exists (profitable, growing, big enough etc)<br />
4 - Key business model components are proven (e.g. monetization / pricing etc)<br />
<b><br /></b>
<b><br /></b>
<b>Phase 0 - Testing (Pilots)</b><br />
A key component of Phase 0<b> </b>is the testing of multiple use cases. These tests are often called <b>Pilots. </b>Pilots exist to define, develop and refine early-stage products or services to better understand their position in the given market and to mature the product towards the official launch of the product. These multiple pilots are often referred to as part of the <b>Lean Startup </b>method.<br />
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<u>Test #1</u><br />
The first test was conducted by both founders in San Francisco. They split the costs of a rented Mercedes S Class car with a driver and a parking spot in a garage. They drove around, 'faking' the real product.<br />
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The goal was to determine the probability of the main Hire a cab via your phone use case.<br />
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<u>Test #2</u><br />
This test was conducted on a tiny, controlled niche in New York city. The test included 3 cars cruising 3 areas in NY (SOHO, Chelsea and Union Square). Both the product's key features and the pricing were tested.<br />
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It is also important to note that Uber employs a fixed <b>6 weeks pilot period </b>which they used consistently around the world before officially launching in a new city.<br />
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<i>-- The test timeline --</i><br />
- March 2009, Garrett Camp, the co-founder with the idea, started working on a prototype<br />
- August, 2009, Travis joins as chief incubator - responsible for taking the idea from product to prototype<br />
- January 2010, test run in New York: 3 cars cruising 3 areas (SOHO, Chelsea, Union Square)<br />
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<b>Phase 1 - Launch</b><br />
The launch was scheduled for May 31st in San Francisco. To manage the launch and the ongoing operations during phase 1, Travis hired a General Manager. During the launch, additional marketing tactics were tested and discoverd. They are outlined below.<br />
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<div style="text-align: center;">
<img src="http://cdn1.tnwcdn.com/wp-content/blogs.dir/1/files/2013/06/162507527-645x250.jpg" height="155" width="400" /></div>
<div style="text-align: center;">
<i>Source: <a href="http://thenextweb.com/asia/2013/06/13/uber-job-ads-suggest-private-car-hire-service-will-launch-in-taiwan-china-korea-and-new-zealand-next/" target="_blank">TheNextWeb</a></i></div>
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During the launch phase, acquisition metrics are carefully monitored as it's the most critical success factor for this phase. In Uber's case, they tracked the effects of WOM (word of mouth marketing channel) and found that every 7 rides generated 1 wom user (14.3% WOM acquisition).<br />
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In addition, they were able to categorize WOM 'accelerants' (as Travis calls them). These accelerants are based on specific life events and locations which accelrates standard WOM. Examples:<br />
* <b>Restraurants and Nightlife</b> - Hit the 'Uber' button at the end of dinner to get home safely<br />
* <b>Weather Events</b> - when you don't want to be outside (in heavy rain - 1 new rider for every 3 rides)<br />
* <b>Sports Events - </b>getting out of an event is impossible<br />
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<i>-- The launch timeline --</i><br />
- March 1st, first day of Ryan Graves, the newly hired GM (found through Craigslist)<br />
- May 31st, 2010 - Official San Franciscolaunch<br />
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<i>-- Launch stats --</i><br />
December, 2010:<br />
3,000 to 6,000 users<br />
10,000 and 20,000 rides (Key Metric)<br />
1,000 active riders (Key Metric)<br />
<br />
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<b>Phases 2 Onwards - Growth</b><br />
When a company successfully completes phase 1, which includes establishing the company in the target market with a defined product and a defined offering, the focus shifts towards growth. Uber's growth was focused on international expansion as quickly and effectively as possible. Here's their timeline:<br />
<br />
<b>Aug 2009* - $200k Angel investment by founders</b><br />
<b>Oct 2010* - $1.3m</b><br />
<b>Feb 2011* - $11m</b><br />
<b>Dec 2011* - $37m (international expansion)</b><br />
Dec 2011 - Paris<br />
Mar 2012 - Canada<br />
July 2012 - London<br />
Sep 2012 - Australia Pilot (6 weeks)<br />
Nov 2012 - Australia<br />
Jan 2013 - Singapore<br />
<b>Aug 2013* - $258m (thru Google Ventures - expedited international growth)</b><br />
Aug 2013 - Seoul<br />
Oct 2013 - Capetown Pilot Started (6 weeks)<br />
Sep 2013 - First sports deal (NFL safe rides for players)<br />
Sep 2013 - Johannesburg, SA<br />
Oct 2013 - Capetown<br />
<b>Jun 2014* - $1.2b</b><br />
July 2014 - Beijing<br />
July 2014* - Nationwide <b>UberX </b>rollout in India<br />
Aug 2014 - Bangalore, India<br />
Aug 2014 - Warsaw, Poland<br />
Oct 2014 - Montreal, Canada<br />
Nov 2014 - Denmark<br />
<b>Dec 2014* - $1.2b (Qatar Investment Authority)</b><br />
<b>Dec 2014* - $600m (Baidu - Alibaba)</b><br />
<b>Jan 2015* - $1.6b (Goldman Sachs)</b><br />
Jan 2015 - Nairobi, Kenya<br />
<b>Feb 2015* - $1b</b><br />
<b><br /></b>
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Fascinating journey isn't it? :-)<br />
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Stay tuned for more insights.Anonymoushttp://www.blogger.com/profile/00941483969538885294noreply@blogger.com0tag:blogger.com,1999:blog-398395191843499613.post-26990585697620890432015-04-13T09:00:00.000-07:002015-04-13T09:00:03.650-07:005 mistakes everyone makes when building their Lean Canvas<div class="MsoNormal" dir="LTR" style="direction: ltr; margin-bottom: 0.0001pt; unicode-bidi: embed;">
<span style="font-family: inherit;">I love running workshops. It's a passion of
mine. You start off with setting the theme, or topic for discussion, and then
you let the magic happen.</span></div>
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<span style="font-family: inherit;">Last week, I was called in for a 2nd workshop on
the Lean Canvas. The workshop was held in Nazareth which is in the north of
Israel. Now, I live in the center of Israel, in a small city called Ramat Gan.
Nazareth is about 100 km north of Ramat Gan and on a normal day, this shouldn't
take longer than an hour and a half drive. But, as the workshop was scheduled
to start at 6pm, I had to leave about 3 hours earlier to allow time for the
heavy traffic. almost 3 hours!? That's crazy.<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvA451QL83y-lG4VYbuRspqT9vJytHNyXY0lEz6veoWDC9ZjRHg-EA-ItXWrVm3MHUUOpPxIIFCZjEz4h7tpZVq5Blo62uW7uosocW0Qj_4TNDzQ84_ewhTxkr7tIoIyjRfFG7hsZe1Cea/s1600/FullSizeRender+(8).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: inherit;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvA451QL83y-lG4VYbuRspqT9vJytHNyXY0lEz6veoWDC9ZjRHg-EA-ItXWrVm3MHUUOpPxIIFCZjEz4h7tpZVq5Blo62uW7uosocW0Qj_4TNDzQ84_ewhTxkr7tIoIyjRfFG7hsZe1Cea/s1600/FullSizeRender+(8).jpg" height="480" width="640" /></span></a></div>
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<i><span style="font-family: inherit;">Photo: Downtown Nazareth. A beautiful place with
G-R-E-A-T Shawarma!</span></i></div>
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<span style="font-family: inherit;">For the past 2 years I've been giving back to
the Israeli entrepreneurship eco-system by giving free lectures on Business
Models and both the Business Model Canvas and the Lean Canvas. Did I already
say that the Lean Canvas is my favorite? :-) I explained why in my <a href="http://www.startupmodeling.com/2015/04/the-left-brain-right-brain-business.html"><span style="color: blue; mso-bidi-font-size: 11.0pt;">previous post</span></a>.<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<b><span style="font-size: 18pt;"><span style="font-family: inherit;">Lean Canvas first timers</span></span></b></h2>
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<span style="font-family: inherit;">Back on topic. Last week. I had a group of about
8 aspiring entrepreneurs who all have great embryonic ideas. I've met these
guys before, about 2 weeks ago when I first exposed them to the Lean Canvas
technique. This time, the plan was to go through their homework and together as
a group, refine one canvas prepared by one of the entrepreneurs and drill down
to a specific segment.<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;">One of the guys, Maroon, had a great venture
idea in the travel industry. Now there is another over saturated market, but
nevertheless, a challenge. <b>How do we niche an early
idea? How do we make an idea into a compelling proposition?</b><span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;">In this post, I will address some of the
misconceptions that came up during the workshop. This is important for anyone
looking to describe their business model using the Lean Canvas.<o:p></o:p></span></div>
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<span style="font-family: inherit;">Ok, a quick refresher on the Lean Canvas. The
Canvas has 9 sections, each addresses key aspects of the business model.<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg7j8bKO32LHGYcYizSH3O4VjDsYm55NmacbiJAyL8LojYXf47wPmOhJdPlpVY_uZSLSo0KkOGSiMHpAzw1hsLTajbysi9q2VN_YObqAGGpC7Qvp7ikTI9yAThvASp84m4CeNaUvGqunnhp/s1600/ExampleLeanCanvasCutted.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: inherit;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg7j8bKO32LHGYcYizSH3O4VjDsYm55NmacbiJAyL8LojYXf47wPmOhJdPlpVY_uZSLSo0KkOGSiMHpAzw1hsLTajbysi9q2VN_YObqAGGpC7Qvp7ikTI9yAThvASp84m4CeNaUvGqunnhp/s1600/ExampleLeanCanvasCutted.png" height="366" width="400" /></span></a></div>
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<span style="font-family: inherit;">In this post, I want to focus on the 5 main
mistakes made while filling out this canvas.<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<b><span style="font-size: 18pt;"><span style="font-family: inherit;">1. Customer Segments contain
real company names</span></span></b></h2>
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<span style="font-family: inherit;">It's natural to think about specific companies
when you think about customer segments. However, this section includes only
segments and sub-segments. A <b>market segment</b> is an identifiable group of individuals,
families, businesses or organizations that <b>share one or more
characteristics or needs</b>. The basic criteria of a market segment are:<o:p></o:p></span></div>
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<span style="font-family: inherit;"><b>* Homogeneity -</b><b> </b>common needs within the segment<o:p></o:p></span></div>
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<span style="font-family: inherit;"><b>* Distinction -</b><b> </b>unique from from other groups<o:p></o:p></span></div>
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<span style="font-family: inherit;"><b>* Reaction -</b><b> </b>similar response to marketing and promotional
offers<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;">In addition to the definition of a market
segment, there is a process called <b>market segmentation</b> which is a strategic process whereby a broad market is
divided into smaller, clearly defined market segments. It is important to
distinguish a <b>5 main types of
marketing segmentation practices</b>:<o:p></o:p></span></div>
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<span style="font-family: inherit;"><b>A - Geographic Segmentation</b> - a first step in international marketing
and includes segmentation by countries, cities, states, religions,
neighborhoods etc. This is normally followed by <b>Demographic Psychographic Segmentations.</b> You should understand your geographic
segmentation early on when defining your business model. As an example, if
you're planning on developing a mobile app that uses geo-location features to
discover or acquire users, you would be segmenting based on local
neighborhoods. Take <a href="http://gett.com/"><span style="color: blue; mso-bidi-font-size: 11.0pt;">Gett</span></a> (GetTaxi).
Their core segmentation is based on major metropolitan cities where short
distance daily commuters is in high proximity and demand. Tools such as <a href="http://www.google.com/analytics/"><span style="color: blue; mso-bidi-font-size: 11.0pt;">Google Analytics</span></a> or other analytical tools provide real-time and
historic statistics on these stats out-of-the-box.<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;">In your canvas, you might want to be as broad as
San Francisco or as specific as within a 2km radius of local neighborhoods in
large metropolitans.<o:p></o:p></span></div>
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<span style="font-family: inherit;"><b>B - Demographic Segmentation -</b><b> </b>the 2nd step in segmenting is by age, gender,
occupation, educational level etc. Assuming your start-up addresses a specific
local market, say San Francisco, you would then want to further segment this
market into the various age groups, genders etc.<o:p></o:p></span></div>
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<span style="font-family: inherit;">Taking the Gett example above, we could specify
the segment as busy professionals, predominately males, aged 25-40 in large
metropolitans, working in the city center or within a 3km radius of it.<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><b>C - Behavioral Segmentation</b> - this practice divides consumers based on
purchase patterns, frequency of purchase, usage patterns and brand loyalty. The
best example here are the Apple loyal fans. Apple had created a strong consumer
brand-loyalty which on its own represents a market segment. Another good
example is a home-exchange network, a website such as <a href="http://homeexchange.com/"><span style="color: blue; mso-bidi-font-size: 11.0pt;">homeexchange.com</span></a>. This segment addresses people that are
open to and familiar with exchanging their homes with others on a frequent
basis. Yet another example are people that prefer and often choose to buy and
eat organic food.<o:p></o:p></span></div>
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<span style="font-family: inherit;"><b>D - Psychographic Segmentation</b><b> </b>- segmentation based on lifestyle and
personality. The perfect examples for this is the GoPro camera which primarily
targets the Extreme sports lovers. These days, GoPro had diversified and now
targets additional segments, such as party-gowers.<o:p></o:p></span></div>
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<span style="font-family: inherit;"><b>E - Segmentation by Benefits</b> - segmentation by benefits sought after by
consumers. Easier way to explain this is by thinking of what is important to
you when you think about your car. Is energy efficiency important? safety? low
consumption?<o:p></o:p></span></div>
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<span style="font-family: inherit;"><b>F - Cultural Segmentation</b> - used to classify markets according to
cultural origin. Cultural origins provide strong insights into consumer
customs, perceptions and general behavior.<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;">When writing your customer segments, keep these
practices in mind, it will help you get a good start on your segments and a
better understanding of your target audience.<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<b><span style="font-size: 18pt;"><span style="font-family: inherit;">2. The Solution section
includes the product's benefits</span></span></b></h2>
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<span style="font-family: inherit;">The Solution section must include the specific
solution components. For instance, if your end product is a mobile app, then
"Mobile App" should be described in this section.<o:p></o:p></span></div>
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<span style="font-family: inherit;">It's easy to get confused with the Value
Proposition section as people tend to describe the solution by its benefits. This
is not the case here. You should also try and include up to 3 of your top
features of the product or service you're offering. This will help clarify what
it is all about.<o:p></o:p></span></div>
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<span style="font-family: inherit;">Let's use the Gett example from above. The Gett
company offers a Mobile App solution which includes Taxi ordering from you
mobile, Auto-receipt generation and forwarding by email and a rating system for
drivers.<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<b><span style="font-size: 18pt;"><span style="font-family: inherit;">3. Unfair Advantage
section contain weak advantages</span></span></b></h2>
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<span style="font-family: inherit;">This one is one of my favorites. The unfair
advantage refers to something that will not only make you stand out from the
crowd but also something that will be VERY hard to reproduce by existing or new
competitors. It is very important to not confuse this section with I would call
'standard' advantages.<o:p></o:p></span></div>
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<span style="font-family: inherit;">Example. If you're planning on creating a travel
planning app that includes local guides providing content and selling travel
packages in the app, you might consider adding "Local Guides" as your
unfair advantage. However, this is not the case. Partnering up with local
guides for your venture could be easily done for another. Getting local guides
involves using effective business development activities.<o:p></o:p></span></div>
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<span style="font-family: inherit;">The idea behind unfair advantage is that you
need to specify something unique and solid that will keep your competition
behind as long as possible. Here are some guidelines on what an unfair
advantage could be:<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><b>* Official / Exclusive Distributor</b> - normally achieved by signing an
agreement with an overseas exporter to solely represent and sell its goods and
services<o:p></o:p></span></div>
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<span style="font-family: inherit;"><b>* Patent -</b><b> </b>a patent is a great example of how to establish
and maintain a competitive edge in the marketplace<o:p></o:p></span></div>
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<span style="font-family: inherit;"><b>* Domain knowledge expert</b> - attracting and in some cases hiring a domain
knowledge expert such as a professor in a particular field can provide solid
competitive leverage. From personal experience, while operating my
start-up <b>5skills,</b><b> </b>I was able to locate a professor who conducted a very extensive
research in the field of matching job seekers to jobs. This would have been a
great addition to the start-up as far as being competitive in the online
recruiting industry. Unfortunately, the strict research implementation
requirements proposed by the university, would have changed the product
offering significantly. As a result, this partnership dissolved.<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><b>* Celebrity -</b><b> </b>last but most definitely not least, using a
celebrity association to boost the brand awareness and credibility, is a sure
way of getting ahead in the early days. A great example I love using is a
start-up called <a href="http://www.feex.com/"><span style="color: blue; mso-bidi-font-size: 11.0pt;">Feex</span></a>.
Feex finds and reduces your retirement fees using crowd-sourced management fees
comparisons. One of Feex's founders is <a href="https://www.linkedin.com/pub/uri-levine/0/89/853"><span style="color: blue; mso-bidi-font-size: 11.0pt;">Uri Levine</span></a> who was
one of the founders of <a href="https://www.waze.com/"><span style="color: blue; mso-bidi-font-size: 11.0pt;">Waze</span></a>.
During the early days of Feex, you could have seen many promotions on Facebook,
mainly in Israel, with the title "Uri Levine's new start-up". This is
a perfect example of utilizing a celebrity or another well known figure to
boost the start-ups awareness in the marketplace.<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;"><img src="http://blogs.estadao.com.br/link/files/2012/12/uri_levine_250.jpg" /><span style="font-size: 13.5pt;"> <o:p></o:p></span><img src="http://blog.feex.com/wp-content/uploads/2013/09/Uri-262x300.jpg" /></span></div>
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<span style="font-family: inherit;"><span style="font-size: 13.5pt;"><a href="http://blogs.estadao.com.br/link/rota-alternativa/"><span style="color: blue; mso-bidi-font-size: 11.0pt;">Source</span></a> (left
photo),</span><span style="font-size: 13.5pt;"> </span><span style="font-size: 13.5pt;"><a href="http://www.feex.com/blog/i-can-lose-money-on-my-own/"><span style="color: blue; mso-bidi-font-size: 11.0pt;">Source</span></a> (right
photo)<o:p></o:p></span></span></div>
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<b><span style="font-size: 18pt;"><span style="font-family: inherit;">4. Channels describe
common channels</span></span></b></h2>
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<span style="font-family: inherit;">The Channels section must include specific
channels that can attract the right segments with the proposed unique value
proposition. Including only the common channels like social networks, blogs,
online advertising is not enough and will make the business model weak.<o:p></o:p></span></div>
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<span style="font-family: inherit;">You should really focus on finding niche-based
channels, these have always proved to be the most effective in targeting the
right audience (segments) with the right proposition. Example. Using the travel
mobile app example mentioned earlier, let's assume that the start-up would like
to attract 2 main segments, travelers and local guides.<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;">Let's refine the travelers segment. Let's
break-down the travelers into a primary segment of young (ages 25-35), single
professionals that travel for long quick weekend getaways in major cities in
Europe between 6-8 times a year. Now, you have to ask yourself, how do I reach
this audience? If we're talking about young single professionals, we can assume
they work in offices, perhaps some of them might work for big corporates? It
would be fair to assume that some of these guys go to the gym 1-2 times a week,
drink coffee in a cafe each morning and love going to the pub on Friday nights.<o:p></o:p></span></div>
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<span style="font-family: inherit;">As you can see, we were able to narrow down the
channels to very specific and effective ones very quickly. It'll be easy to
extract channels such as gym billboard and newsletter, HR department in large
corporates, coffee shops (using flyers and business cards), Pubs (billboards,
beer coasters etc). You can also target specific web-sites, blogs and
individuals to help promote the start-up idea. Use your imagination here and
after trying a few options, you will be able to find solid channels you can use
to reach your audience.<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<b><span style="font-size: 18pt;"><span style="font-family: inherit;">5. Key Metrics describe
too broad metrics</span></span></b></h2>
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<span style="font-family: inherit;">The <b>Key Metrics</b> section
is one of my favorites. This normally would require you to think carefully and
decide what are the key 1 or 2 metrics you would need to track to ensure the
business is growing. <o:p></o:p></span></div>
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<span style="font-family: inherit;">One common mistake many entrepreneurs make here,
is describe a metric like <b>Traffic</b> or <b>New Users</b>.
This on the surface is a valid metric to track, but I would always argue it's
not one of the key metrics to track. Example.<o:p></o:p></span></div>
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<span style="font-family: inherit;">In the travel app example from before, instead
of using the metric <b>Traffic</b>, you could use a metric such as <b>Number of purchased guided tour packs</b>.<b> </b>This metric will cover both
travelers and local guides preparing and selling guides. This metric will allow
you to track the growth of the transactions of the business and in turn the
growth in travelers and guides. You could refine this metric further and
include the <b>Unique number of
purchased guided tour packs by unique monthly travelers</b>. This metric includes the growth of new guided
tour packs added into the system and sold to unique travelers that are active
on a monthly basis (both new and existing travelers). See what I mean?<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<span style="font-family: inherit;">This is a very important metric to get right,
but it might take you a bit of time and a few iterations until you land on the
one best suited for your business.<span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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<b><span style="font-size: 18pt;"><span style="font-family: inherit;">Wrap up</span></span></b></h2>
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<span style="font-family: inherit;">I hope this was a useful summary of what NOT to
do in some of the key Lean Canvas sections. Good luck with yours and feel free
to contact me if you have any questions.<o:p></o:p></span></div>
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<span style="font-family: inherit;">To get your Lean Canvas right, CONTACT ME HERE
><span style="font-size: 13.5pt;"><o:p></o:p></span></span></div>
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Anonymoushttp://www.blogger.com/profile/00941483969538885294noreply@blogger.com0Tel Aviv-Yafo, Israel32.0852999 34.78176759999996631.977676400000004 34.620406099999968 32.192923400000005 34.943129099999965tag:blogger.com,1999:blog-398395191843499613.post-2508028435265176632015-04-02T16:03:00.001-07:002015-04-02T16:03:59.322-07:00The Left Brain / Right Brain “Business Model” Theory<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Raise your hand if you are an entrepreneur and at some point faced this question “What is your business model”?</span></div>
<b id="docs-internal-guid-024d1390-7c5b-6251-9eb3-1f807cb4a983" style="font-weight: normal;"><br /></b>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">We’ve all been there. You are passionate about your idea, you get excited about its potential, the product, its features, your co-founders… making the world a better place. Everything seems to be moving in the right direction and then, investors and other entrepreneurs ask you casually “and… how are you going to make money?”.</span></div>
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<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Your immediate point of call is Google naturally. Go ahead, type “Business Models” in Google, I dare you. Talk about losing your altitude - from excitement to ‘huh?’, ‘say what?’. It’s challenging enough creating a pitch deck, a 1-pager or an executive summary but trying to both understand what a business model is and how to write it down is almost considered a dark art.</span></div>
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<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Well, here are the good news, I’m going to give you the </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">secret </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">to deciphering what it is that you need to do to get your business model developed and documented in a way that is both easy to do and easier to understand.</span></div>
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<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">I’m kidding about the ‘secret’ part of course :-)</span></div>
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<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">By Allow me to introduce to my </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: italic; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">The Left Brain / Right Brain “Business Model” Theory</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">.</span></div>
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<h1 dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 10pt;">
<span style="background-color: transparent; color: black; font-family: 'Trebuchet MS'; font-size: 21px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">My Left Brain / Right Brain “Business Model” Theory</span></h1>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">Roger Wolcott Sperry</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">, a neuropsychologist and a 1981 Nobel Prize Winner for his </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">split-brain research</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">. He coined the notion that the right-brain is best at expressive and creative tasks whereas the left brain is considered to be more responsible for logic, language and analytical thinking.</span></div>
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<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">A Business Model can also be divided into two parts as well, the more creative and conceptual side, the right-brain and the more analytical and detailed side, the left brain.</span></div>
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<h1 dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 10pt;">
<span style="background-color: transparent; color: black; font-family: 'Trebuchet MS'; font-size: 21px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">The Right Brain Business Model</span></h1>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Similar to a top-down approach, defining a business model starts from the top, the more high-level and slightly conceptual level.</span></div>
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<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">The best way to conceptualize and capture the thought process and iterative development of the business model is by using one of 2 best of breed tools. These tools are the </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Business Model Canvas </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">and the </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Lean Canvas</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">.</span></div>
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<h2 dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 10pt;">
<span style="background-color: transparent; color: black; font-family: 'Trebuchet MS'; font-size: 17px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Business Model Canvas</span></h2>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">The 1st model is called the </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Business Model Canvas</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> or BMC for short and is based on the work done by </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">Alex Osterwalder</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> and </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">Yves Pigneur</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">. This canvas captures the key 9 essential components that make up the business model (see image below):</span></div>
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<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: center;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><img height="452" src="https://lh6.googleusercontent.com/2FEjED8m_fH9tOa7yrEbFnLdYjCxTqEEcy9D5Ok2ijF1tfSQ-oTk_JYf0h6VAQRjsvIScufJOBu5bOb-0z0oXcR4BDC1cB3Vc31W_yHysAU_EncUIxuS686coWi6sLM1LeJUjXM" style="-webkit-transform: rotate(0rad); border: none; transform: rotate(0rad);" width="640" /></span></div>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: center;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 12px; font-style: italic; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">* Image from </span><a href="http://blog.bizzdesign.com/" style="text-decoration: none;"><span style="background-color: transparent; color: #1155cc; font-family: Arial; font-size: 12px; font-style: italic; font-variant: normal; font-weight: normal; text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">http://blog.bizzdesign.com/</span></a></div>
<b style="font-weight: normal;"><br /></b>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">The canvas provides a well thought through process for nailing the </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">product / market fit</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">. This is achieved by the unique structure of the canvas. If you draw a vertical line straight in the middle of the canvas, you will have 2 sides: the left side which addresses the </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Product</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> components and the right side which addresses the </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Market</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> components. The canvas is split right in the middle where the </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Value Proposition</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> is formed.</span></div>
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<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Here is what every section in the canvas means:</span></div>
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<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Strategic Partners / Key Partners</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> - Key partners, key suppliers, key resources acquired from partners and key activities partners perform</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Key Activities</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> - Key activities our value proposition, distribution channels, customer relationships and revenue streams require</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Key Resources</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> - value proposition, distribution channels, customer relationships and revenue streams require, e.g. intellectual, human, financial</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Value Proposition</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> - The actual value we deliver to our customer and the problem we’re solving, e.g. characteristics include newness, design, brand/status, price, cost reduction etc</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Customer Relationships</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> - The type of relationship each customer segment require, e.g. personal assistance, self service, communities, co-creation etc</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Distribution Channels</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> - How does the business plan to reach its customers</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Customer Segments </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">- What customer segments will receive the value we create and offer?</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Cost</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> - The most important costs in the business, the costs associated with the key resources and key activities</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Revenues</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> - For what value are our customers willing to pay? How would our customers prefer to pay?</span></div>
</li>
</ul>
<b style="font-weight: normal;"><br /></b>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Creating the canvas is done in a certain order, ensuring you build on top of more important components. Working this way allows you to focus and elaborate on each item separately.</span></div>
<b style="font-weight: normal;"><br /></b>
<ol style="margin-bottom: 0pt; margin-top: 0pt;">
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: decimal; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Value Proposition</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: decimal; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Customer Segments</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: decimal; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Channels</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: decimal; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Customer Relationships</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: decimal; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Key Activities</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: decimal; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Key Resources</span></div>
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<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: decimal; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Key Partners</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: decimal; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Revenue Streams</span></div>
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<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: decimal; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Cost Structure</span></div>
</li>
</ol>
<b style="font-weight: normal;"><br /></b>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: center;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><img height="436" src="https://lh3.googleusercontent.com/fDw2XRDRtNEOY4GKtxrxGjy5r-gTELFI6byg4nr82WBl7Ob_eXoi9XVoBLfQGGBjig1pwKwGJIo0pdWYo6C3uiyDG6tOVue06jQAjZp17JbSJXBQTzlckNBuWLhnJa7MMv-AZ-U" style="-webkit-transform: rotate(0rad); border: none; transform: rotate(0rad);" width="640" /></span></div>
<h2 dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 10pt;">
<span style="background-color: transparent; color: black; font-family: 'Trebuchet MS'; font-size: 17px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Lean Model Canvas</span></h2>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">This canvas was created by </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">Ash Maurya</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">, as a more problem-focused alternative. I personally have found that the Lean Canvas is easier to grasp for beginners and makes a bit more sense. Quite often, when working with entrepreneurs, I was told that the Business Model Canvas is a bit confusing and some of the content in a few sections appear to be overlapping.</span></div>
<b style="font-weight: normal;"><br /></b>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Both canvases are great tools to get the process started. I recommend starting out with the Lean Canvas and working your way from there. This canvas replaces 4 sections with a more problem-solution theme as follows:</span></div>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: center;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><img height="403" src="https://lh4.googleusercontent.com/uVtJQVJ4NdFquf-5Thd4bbV2N8lIqJBGYma5qrK-f12vStSPyLomUBcXMelPQsP7RtKVCFsA9PaSSFhKfV9HZMXFfUsonrxeLfff_1OxZvGZFA1bdK1DKcxIn2Ja2x1w2OrFbi8" style="-webkit-transform: rotate(0rad); border: none; transform: rotate(0rad);" width="640" /></span></div>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: center;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">The new items that were swapped in are:</span></div>
<ul style="margin-bottom: 0pt; margin-top: 0pt;">
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Problem </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">- a clear definition of the problem this venture / idea is trying to solve</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Solution</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> - a clear statement of what the actual solution is. E.g. is it a website, a mobile app, an online call center etc</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Key Metrics</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> - this refers to the business’ top 1 or 2 KPIs (</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Key Performance Indicators</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">). It’s critical to keep in mind that every business normally has 1 or 2 top-level KPIs. These are used on a regular basis (normally days, weeks, months, quarters and year, and at times on an hourly basis) to track the growth and sustainability of every business</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Unfair Advantage</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> - when entering a market, it’s critical to establish a unique unfair advantage. The obvious examples are IP-related assets, e.g. patents, scientists or professors who are part of the core team of the business. Other more modern examples include celebrity associations (see </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Feex</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> as an example). These provide a hard-to-copy or compete advantage</span></div>
</li>
</ul>
<b style="font-weight: normal;"><br /></b>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">The order in which to fill out this canvas was slightly changed as well. You first start off with the segments and work your way in through the problem statement as follows:</span></div>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: center;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><img height="400" src="https://lh3.googleusercontent.com/cNsNJbQJiSu_IU3Nh5ENCzBws6p_0rAEpKZ39IGi4meNdhJHu7wp3HhdCtcihTQlgOeqA-Ue-r6gOWcVu-k0P_NikCMPFLtrTgkzGnqRnrfQG2eosdB2DwFobLBSCzgpOK7LmWc" style="-webkit-transform: rotate(0rad); border: none; transform: rotate(0rad);" width="640" /></span></div>
<h2 dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 10pt;">
<span style="background-color: transparent; color: black; font-family: 'Trebuchet MS'; font-size: 17px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">An iterative process</span></h2>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">And last but not least - quite a few entrepreneurs don’t realize it - working with these canvases is an iterative process. You start off with a very high-level canvas that addresses multiple segments, and through the process of refinement, you end up with a small subset of canvases, each addresses a specific segment or sub-segment in your ideal market.</span></div>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: center;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><img height="528" src="https://lh4.googleusercontent.com/MdySe_2_rW8H2gK2Svk32mzutVsX1M41NDcBaG0O-4FPQAjcT5hFvajBtfXsDGu21teyAjxXW644XBJEeSt_Q7Kt2f-QOGjFaTBtPjt7bprtVTGQnfjPmCc6rhCMgpt1YsLT2aU" style="-webkit-transform: rotate(0rad); border: none; transform: rotate(0rad);" width="640" /></span></div>
<h1 dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 10pt;">
<span style="background-color: transparent; color: black; font-family: 'Trebuchet MS'; font-size: 21px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">The Left Brain Business Model</span></h1>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">The left brain business model drills down into the nitty gritty of an actual model you would expect to find in a business plan or when discussing it with an investor or a CFO.</span></div>
<b style="font-weight: normal;"><br /></b>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">But first, let’s revisit the definition of the phrase “Business Model” from the perspective of the left brain. In its pure form, a business model is a:</span></div>
<b style="font-weight: normal;"><br /></b>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: center;">
<span style="background-color: transparent; color: #595959; font-family: Arial; font-size: 16px; font-style: italic; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">A scalable way to </span><span style="background-color: transparent; color: #595959; font-family: Arial; font-size: 16px; font-style: italic; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">acquire customers </span><span style="background-color: transparent; color: #595959; font-family: Arial; font-size: 16px; font-style: italic; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">and </span><span style="background-color: transparent; color: #595959; font-family: Arial; font-size: 16px; font-style: italic; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">monetize</span><span style="background-color: transparent; color: #595959; font-family: Arial; font-size: 16px; font-style: italic; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> these customers</span></div>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: center;">
<span style="background-color: transparent; color: #595959; font-family: Arial; font-size: 16px; font-style: italic; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">at a significantly higher level than your cost of acquisition</span></div>
<b style="font-weight: normal;"><br /></b>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">So a business model has really only 2 components, the </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Acquisition </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">and the </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Monetization</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">. We use the abbreviation </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">CAC </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">to describe the acquisition cost, i.e. </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Customer Acquisition Cost </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">and we use LTV to describe the monetization component of the equation. LTV means </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Life Time Value</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">. The LTV of a customer will give us a key metric for evaluating the effectiveness and success of the selected business model or models. More on this later.</span></div>
<b style="font-weight: normal;"><br /></b>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">David Skok</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">, partner at Matrix Partners, visualized this formula perfectly. He also pointed to a very important goal when creating and monitoring a business model. One must achieve an imbalance between the two components, whereby the LTV is significantly higher than the CAC. This is the only way to build a successful and growing business. See illustration below:</span></div>
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<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><img height="368" src="https://lh4.googleusercontent.com/NQ0VpGVindWDtFEpb4fOsBPHm_aksMKXvk_ccP018ZWUtgVpR-zIQZCNYdk82T9B9AhV6Tlmu4U8nqerWiYdqkvM-RzZ56n-tQ1lM5koY3VqGwS5H0F8qfyXHT4nz_Dv8yvCOQI" style="-webkit-transform: rotate(0rad); border: none; transform: rotate(0rad);" width="640" /></span></div>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: center;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 12px; font-style: italic; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">* Image taken from </span><a href="http://www.forentrepreneurs.com/business-models/" style="text-decoration: none;"><span style="background-color: transparent; color: #1155cc; font-family: Arial; font-size: 12px; font-style: italic; font-variant: normal; font-weight: normal; text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">http://www.forentrepreneurs.com/business-models/</span></a></div>
<b style="font-weight: normal;"><br /></b>
<h2 dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 10pt;">
<span style="background-color: transparent; color: black; font-family: 'Trebuchet MS'; font-size: 17px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">CAC - Customer Acquisition Cost</span></h2>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Calculating the </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">CAC </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">is easy and is done by using this formula:</span></div>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: center;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><img height="116px;" src="https://lh3.googleusercontent.com/cv1FJd7aI1PAn89IZ-abZsWs2--LC7hj9IBfb-Ndm_Um4fcbpTrzL7-0_j4xUt6YT2zfw064RyZ3cInDQVEilOB3ToyZItzSdrv9xQGmABsdqFRsbtmFf3LiOPSqV_1yb3K5BKg" style="-webkit-transform: rotate(0rad); border: none; transform: rotate(0rad);" width="642px;" /></span></div>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Definition of each parameter in the formula is below:</span></div>
<ul style="margin-bottom: 0pt; margin-top: 0pt;">
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">MCC </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">= Total marketing campaign costs related to acquisition (Not retention)</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">W </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">= Wages associated with marketing and sales</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">S </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">= The cost of all marketing and sales software</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">PS</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> = Any additional professional services used in marketing/Sales (Designers, Consultants etc)</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">O</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> = Other overheads related to marketing and sales.</span></div>
</li>
<li dir="ltr" style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; list-style-type: disc; text-decoration: none; vertical-align: baseline;"><div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">CA </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">= Total customers acquired</span></div>
</li>
</ul>
<b style="font-weight: normal;"><br /></b>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">What you will need to do now is create a spreadsheet (preferably a Google Sheet document so you can easily share it) and outline all the above costs in a single column. See example below. Note that in this post I will not drill-down into the mechanism and the specific example mentioned but I will dedicate a post for just that soon.</span></div>
<b style="font-weight: normal;"><br /></b>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: center;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><img height="640" src="https://lh3.googleusercontent.com/tliAKWvPSIjq2GvVv86KQIblRhgaOHH5Wtwj4V45c74B4naoyC-2vkkxhhiKWpqKtOsj308WsvtHNVqKhPnM5ighUAM_ogd7oR715HRzLYcrU4i0pODr-QCStJg9k5puM7pdgD8" style="-webkit-transform: rotate(0rad); border: none; transform: rotate(0rad);" width="451" /></span></div>
<b style="font-weight: normal;"><br /></b>
<h2 dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 10pt;">
<span style="background-color: transparent; color: black; font-family: 'Trebuchet MS'; font-size: 17px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">LTV - Life Time Value</span></h2>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Next, you will need to add in the </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">LTV</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> figures. The LTV figures are based on time and are normally calculated on a yearly basis. Keep in mind that for an early-stage start-up, you will most probably build out a monthly sheet first and focus on your first 6 months. It’s almost impossible to accurately predict and forecast your CAC and LTV beyond the 6 months mark at this stage.</span></div>
<b style="font-weight: normal;"><br /></b>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Below is a simple example of putting both the </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">CAC </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">and the </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">LTV </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">together. The most important metric to track in this sheet is the </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">CLTV/CAC</span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> ratio or multiplier (CLTV = </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: bold; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Customer Life Time Value </span><span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">and is another way of describing LTV). This gives us the growth ratio of the business. The longer customers stay with the business and keep paying for receiving value, the stronger and more stable the business will be in the long run. In addition, if we are able to show a x3 CLTV/CAC multiplier by year 3 and a x5 to x10 multiplier by year 5, we enter the realm of the ‘Hocky Stick’ growth start-ups and are prime for VC investments or M&A and IPOs.</span></div>
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<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br /></span></div>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt; text-align: center;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><img height="625" src="https://lh4.googleusercontent.com/tXW_nPAy3jiQnFF3Xb-2-MGwj6hKOEm19hzUzkuXj-hb7Pz5LlxXq_vw8-dsi6n5NVZwC7TeY9lptO72LVcgof7fWBWJt0IxE23GyiYuQ3RkwmzfTQX-D1CO6DiWCzlv83K5xE8" style="-webkit-transform: rotate(0rad); border: none; transform: rotate(0rad);" width="640" /></span></div>
<b style="font-weight: normal;"><br /></b>
<h1 dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 10pt;">
<span style="background-color: transparent; color: black; font-family: 'Trebuchet MS'; font-size: 21px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Conclusion</span></h1>
<div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;">
<span style="background-color: transparent; color: black; font-family: Arial; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">To conclude, a Business Model can be divided into 2 parts, the high-level and conceptual part and the detailed, spreadsheet-driven part. Every entrepreneur needs both and you should always start off with the right side - the canvas side.</span></div>
<br /><span style="font-family: Arial; font-size: 15px; vertical-align: baseline; white-space: pre-wrap;">As with the split-brain theory which was eventually debunked, the Business Model must have both parts to be whole.</span>Anonymoushttp://www.blogger.com/profile/00941483969538885294noreply@blogger.com0tag:blogger.com,1999:blog-398395191843499613.post-73720776566588007972015-03-22T16:03:00.002-07:002015-04-06T12:24:38.476-07:00Start-up Modeling @ NazarethHey all,<br />
<br />
I was fortunate enough to connect with <a href="https://www.linkedin.com/in/henrychenweinstein" target="_blank">Chen Weinstein</a>, Head of Entrepreneurship and Incubation at <a href="http://en.startau.co.il/" target="_blank">StarTau</a> who got me in touch with a <a href="https://www.facebook.com/nazdiv2014" target="_blank">Nazdiv</a>, a Nazareth-based business incubation center. They run a program for entrepreneurs from Nazareth and the surrounding area and they needed someone to run a workshop on the <b>Business Model Canvas</b>.<br />
<br />
How cool! I always love helping upcoming entrepreneurs get their business models in order and crystallize their go-to-market strategy. <b>niche</b>, <b>niche</b>, <b>niche</b>, that's what I always say. This time around, I got to work with awesome people from Nazareth, a beautiful city I don't remember ever visiting. It was a small group of about 9 guys, all with very interesting ideas, focusing primarily on the tourism and the transport industries.<br />
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<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixJT57QRFgiNZ2UL_2eFeBrUDibZddFyGPYJ9W2BrAek2WUMkNJcEuLKEV44JZWR-AD2tnlg0CnL4CzxEHYDDFvdOKd12vRHe0dG1g_X324NsxxWIgep46siJgJZjpKN4WEUXyVLIQjX7n/s1600/FullSizeRender+(5).jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixJT57QRFgiNZ2UL_2eFeBrUDibZddFyGPYJ9W2BrAek2WUMkNJcEuLKEV44JZWR-AD2tnlg0CnL4CzxEHYDDFvdOKd12vRHe0dG1g_X324NsxxWIgep46siJgJZjpKN4WEUXyVLIQjX7n/s1600/FullSizeRender+(5).jpg" height="480" width="640" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><br /></td></tr>
</tbody></table>
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<h2>
Business Models</h2>
I split the workshop into two parts. The 1st part included a high-level overview of some basic marketing concepts followed by a drill-down of some common business models. This always sparks a discussion re: the meaning of a business model and the number of models known companies use.<br />
<br />
<h2>
The Lean Canvas Workshop</h2>
<div>
After the break, I used <b>Uber </b>as a test case for understanding the key concepts of the Lean Canvas. I populated a sample Lean Canvas together with the group.</div>
<div>
<br /></div>
<div>
I then gave the group 20 minutes to prepare their own canvas before picking one to discuss together with the group. I noticed one guy at the back who wasn't sure how to fill out the canvas. I decided to use his idea as the example for the group.</div>
<div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgkxLhKcxIhYbDG2i68qFHShvWyQhXsP_FlFUt66N4n0O5r0na6l9OMxoFfoGzShG2hGL8SmC7lQbizUpcRMEocvRqnfkKKKI6tL0mHjD0kUobUTT1qZ9Szb7Dr_YuVi5Pi7Wg7PCrVoWgz/s1600/FullSizeRender+(6).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgkxLhKcxIhYbDG2i68qFHShvWyQhXsP_FlFUt66N4n0O5r0na6l9OMxoFfoGzShG2hGL8SmC7lQbizUpcRMEocvRqnfkKKKI6tL0mHjD0kUobUTT1qZ9Szb7Dr_YuVi5Pi7Wg7PCrVoWgz/s1600/FullSizeRender+(6).jpg" height="480" width="640" /></a></div>
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<h2>
Finding The Niche</h2>
<div>
As I always say, <b>niche, niche, niche, </b>while guiding the group to expand their thinking, it became an easy task to extend the customer segments and the acquisition / marketing channels.</div>
<div>
<br /></div>
<div>
The next step from here is to create a few additional canvases, each covering a specific segment or sub-segment. The goal is to find the best niche to get started with. One should be careful to not create too many actors (dimensions) to the model, as this would increase the risk of providing a good quality product that fits the user's / customers' needs.</div>
<div>
<br /></div>
<div>
See you next time. I have scheduled another session on the 31st of March, 2015 to review the homework I gave the entrepreneurs. Their task was to identify the best niche to start with using the <b>Lean Canvas </b>as the guide.</div>
<div>
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T</div>
Anonymoushttp://www.blogger.com/profile/00941483969538885294noreply@blogger.com0