Hello everyone. We'll continue talking about new business models today. Where we focus on one specific tool that has been developed called The Business Model Canvas. This is developed by a company called Strategyzer, and you can go to the website and get this Business Model Canvas that you're seeing on the screen. So essentially the canvas is a visual mechanism by which some of the key components of a new business plan can be laid out. And what we'll do in this presentation is we'll essentially go through the nine components of this Business Model Canvas that anyone would have to think about if you're starting a new company, or new service or new product. You have to come up with some sort of business plan, a business model, and this will guide you through the process. So, you see, several compartments, several sections of this map and what we'll do in this presentation is go through each one of them to give you some sense of what the Business Model Canvas is and how it works. So the first one on the top left is what's called key partners. And so what this means is that if you're launching a new venture in your business very often you need to work with other people. You need to work with certain partners. So what this does, this section of the Business Model Canvas does, is it lets you or it allows you to figure out who are the key partners and this could be suppliers who might be providing you with some raw material. It could be resources that they might provide. You'll also have to think about what kind of activities you want to engage with those partners. So those kinds of questions are what this helps you raise. So as you're planning your business model, thinking of these partners is really critical and really important for you to keep in mind. The next one is key activities, right. So key activities essentially are you as a company, you as a new venture that's going out there, what are some of the activities that you will have to engage in to make your idea, make your product, make your service a reality, right. And so some of the things you have to think about is number one, what's the value proposition? What kind of value are we presenting to the potential consumer? And in order to get that value to that consumer, what are some of the steps that we need to take? Well we have to first figure out who your partners are, how you're distributing your product or service, how you're building your relationships with your consumers, how you're making money. So figuring out all those activities, is a type of problem solving, and that's what happens in this aspect of the Business Model Canvas. The next one is resources, right, key resources. To make anything a reality, anything, you need resources, right, and these resources are typically in the form of capital, of course money. There also is human resources. So you might need human resources in terms of who will help you get to your goal. So here in this section of the Business Model Canvas, you are to figure out number one, physical resources. What kind of physical resources do you need? Do you need a new facility? Do you need a new building? How much space do you need? Intellectual resources, so do you need to create some kind of a copyright? Or do you need to buy patents? Do you need to generate new intelligence for the device or the product that you're working on? Of course human. You need human capital. You need people who will be working with you. And then financial of course, you need capital. So those are, at least some of the resources. And mapping those out, figuring where those resources are coming from is one really important part of the Business Model Canvas. The next one is value proposition. And very often you should actually start with this, right. What exactly is it that I'm creating as a new venture, as a new company? And what value does that bring to the consumer, right? Who is buying your product or service. And that's also, when we saw the definition of what is a business model, we saw that value is a key part of that definition. Value to the business itself, but also value to the consumer. But in this case, what value proposition refers to is,what value am I bringing to my potential consumer? What problem are we helping them solve, right? What are we making it easy for them to do? What are they looking for? What is an unmet need that I can solve? And how am I doing it differently than other people in the market right now? If you have a brand new thing, a brand new service that has never existed before, how are people doing it right now? How are people getting across that problem right now? So figuring all those things out is critical and that's what gives you a unique value and gives you a unique place in the market. So this value proposition is something that's really, really important. It has to be figured out. The first when you start any new venture, or launch a new business or think of creating something new, right. Keep in mind the value proposition is extremely important to figure out first. customer relationships is the next one. You have to make sure that you start a good relationship, maintain it and keep it going for over long period of time, right. So this means you got to know who your customer is. You have to understand who they are, what their needs are, what their lifestyle is. What gets them up in the morning. What keeps them excited about your product or service. You have to recognize how much are they willing to pay. So really understanding who your consumer is. And very often, it's important to know that you don't have one specific consumer or customer. You have a series of them, different types of customers. So making sure that you understand who your customers are and building and maintaining a relationship with them is really important as well, right. That's critical to figure out. And this could be through automated services, self services, call centers, all of those things are a part of keeping your customers happy and it's really, really important too. The next one in the Business Model Canvas is the channel. And the channel essentially refers to the mechanism by which you reach your customer, right. How are you reaching out to your customer? Is this something that you are delivering products to them. Are you reaching them through online service? Are you bringing them into your store? How are you advertising? So all those are aspects of the channel. And one thing to keep in mind about the channel is not just about that first sale, right. It's not just important for you to say I need to bring my customer to the store, once I sell I'm done, right. The important thing to keep in mind is in order to maintain a good customer relationship, you have to think of the building awareness for your new product or service, how do people learn about this. Second how are they able evaluate it, how can they evaluate your product against others, comparison shopping is really important. How to actually buy it. This is actually getting across the channel, and your product, into their hands. How is it delivered? Do they come pick it up, or do you deliver it to their homes? And then what happens after the sale, right? Do you keep repair and maintenance as a part of your channel as well? So figuring all those things out is really critical to your business model. The next one is Customer Segments, right. We talked about this briefly during the conversation about customer relationships. But here what you have to figure it is, how do my different sets of consumers see value in what I'm creating or what I'm offering to them, right. And they are different kinds of customer segments, different kinds of products. You can have a mass market product that goes out to way, way broad range of people. You could have a niche market, you could have a specific product for a very specific user group and you are to make sure that you pick the right channel to get to that user group. You could have a series of products that are segmented, so for example, you could say I have one version for this user group. Second version for this user group, a third version for a third user group so you segment your market and you have differentiated product for those. So all those are different kinds of customer segments that you have to think about as part of your business model. The next one now gets into, the next two get into figuring out the financial aspect of your business model. So one of them is your cost structure. So figuring out how expensive is it going to be to get your product or service out into the world. There are something called recurring costs. So costs that you have to constantly keep up-to-date with, things that you have to keep paying for, and second things are sometimes referred to as non-recurring expenses. So initially when you start something new you might have to buy land, you might have to buy a building. Or you might have to invest in certain tooling. And that is the initial non-recurring costs. And then the cost that are incurred in running the business is the continuous cost that you have to keep in mind all the time. So that essentially is your cost structure. Figuring out, where are the costs going? How am I managing those costs? What kinds of expenses will I incur? Those things are important for you to figure out as well. And then this is oft said in the last segment which is called revenue streams. And the revenue streams, this is what actually generates money for you to be able to pay your costs that you incur in running your business, right. So these two go hand in hand and what you want essentially is you want your revenue stream and your revenue generation to be higher than your costs because that's when you actually get some profit. So, where could your revenue come from? How are consumers going to pay for the value that you're providing them, right? Are they paying online, are they paying in store? How much are they paying right now? Will they be willing to pay that much or more for your product or service? How do they prefer to pay? How can I diversify my revenue stream? So you could say I'm selling a physical device, a physical product. And I'm getting a certain amount of revenue from that. But can you go beyond that? Can you say, well, I will have an app that goes hand in hand with it and people have to pay for that app as well. Or can you say well, I also will have some sort of subscription model or a leasing model. So what you have to think about is what are all the different kinds of revenue streams that you could think about, and if you think of the presentation that you heard on different types of business models, that gets into actual different kinds of revenue streams as well. So, this is the revenue aspect of the model. So, what you've seen in this presentation is the Business Model Canvass developed by a Strategyzer, and has all these components that if you're launching a new product or a service, if you're launching a new business, if you use that visual device and start filling out all those sections, you can have a really good understanding of what is some of the fundamental things that I need to do to launch this business. Where will my money come from and where will it go? Who do I need to partner with to make this a reality? What exactly is the value that I'm providing, and how do I keep a relationship with my consumers, right. So these are some of the main things that you need to think about when you do a Business Model Canvas. Of course it's a fairly simple visual device, but you can go into a significant amount of detail in each one of those to create a really solid business model. Thank you.
