Intro Business Model Canevas

Ben Piquard
A free video tutorial from Ben Piquard
Commercial Engineer, Startup Coach
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English [Auto] Hello. Welcome back to the second movie of my starter Luscum music and to NPR and your host for this series of video video that I need to you are provided in creative commons so feel free to share your free to promote them to speak about it. But you can't make money of it. In our startup Buscema we enter another chapter and we will talk. In general the concept of business model canvas business will again last. Introducing the concept in general you do not see building blocks. I show some classic and give you overwork. The key ID is do something people want. We would see that the author Alix's of other end of the business model canvas half by the way created not a single book called value proposition that also push into that direction because the BMC was used on are you saying we need to describe Hindustan and innovate on the concept of a business model for a company. But they are now also pushing the central block which is the concept of value proposition and it's right to have a value proposition that is highly relevant because good business that do not meet customer actually never work. What you've said that business model the reference book as I mentioned it in the introduction is the business regeneration book. I really invite you to buy this book. The story of the book is also interesting because you see the book industry. This is a very complicated business model I spent maybe six months to write the book. Then you go to a career you hope to find a publisher and if you're lucky the publisher print the books start to put the book in. In bookshops and then you get too many books and mostly it was the book have been sold and you only get a part of it due to the writers of the book they completely You get changed. Actually Id by pre-selling I think it was 2000 exemplary of the book too early adopter and actually they do not just consult a book they sell the book and the participation to a conference where during the two days they explained the concept of the book and they help these two dozen ambassadors to become effectively the promoter of the book by spreading her ambition to use to use the good and the good content of the book. So and I don't remember how much you could sell for 1000 Euro 2000 exemplary of a book. You get to material before before you can start with you. Not only enough money to write a book but also to the conference. And that's the boulder effect. You get to those people who spreads actually your book and reach their own customer to buy them. So it's a perfect application of them are the to writer of reinventing business model actually reinvented the business model of book Dance. Now the first question is what's the business model. Why are we talking about a business model. In the case of a startup actually we know that the startup is a race against time and know that a startup should not try to do something until it works. The startup has a limited amount of time to do most of its source financial emotional facing competition and it's very important to work effectively to as quick as possible create a company that is sustainable. One of the key thing of course is first to me to create something people need and then be able to execute and do this new way that in total company generate more cash flow energy more ideas than what is needed to run it. The idea of a business mogul. This is a synthetic and systematic representation on how you create value with a company and how the different stakeholders work together. We use a business model which definition is basically how do you create value. What do you customer buy for you and how do you work it and does it work. Financially and these are the big block I will explain them in a second with a business plan that describe in detail how you would operate and business plans to begin what you give when you look for money when you go to a bank it's a tentative definition of a business model the business model doesn't do well. A company creates and capture value we should not confuse value creation. You can have business will allow for social company as well. What is your type of business you need to find a way to effectively meet Justin Bieber to keep your promises and in. Finally Justin Bieber we know why what why do we have business with all. I personally identified three basic ways. It's a way to understand and to describe what you want to do. It's a way to innovate. This part is to use and it's a way to communicate. We do three basic things understanding innovating coming now one is a. When you have a good business model in the head. Actually when it meets the basic expectation if you get to understand what you do if you can innovate on it and if you can't communicate properly you reach some kind of quality. We will see building a good business model is an interactive process. It's something that needs to go back. It's something that you can do either two days green green in the campaign have had hiring a show where it just getting posted on a day in two. That's not how you build a business when you build a business. Building a business will require weeks if not months of going back and interaction with the customer. This is something I will show you later how I'm sick of it. And then I think in 2013 three we will see how this guy of a U.S. based company in a Bustamente measurement for a decade I two to monitor or actually the baby sleeping we will see how inventive we use the business model it really as a way to interact with customers. So years ago I thought that if I was writing a business model for you I was thinking of designing a business model for you or if I were designing for me there was only one good business model for each kind of company. If you were designing you want to do a recording system for a concert in the music industry. I saw that the BMC business model canvas that you will do all that. I will go should be the perfect one for this business. Today we are in 2018. I do not believe that anymore. So for me business models are not universal. Business model should be highly connected to the ability of the team to execute the business model. There is a blog called resource and its very important to have everything a line in the business model between the resource customer the kind of customer you can talk to depends also largely on your own experience or your business model for an ID should not be my business. They should fit in. But the business model is also related to the team and its ability to execute the movement of business for the business world based on assumption and our very own parade. We will see to change the ascension business model is a person saying it does look and is seeing evolve. Are you able to execute it if you have to meet a day. You know very well how to do it. You are maybe not the right person to do that so you still need the right team to exit. The business model and I mention my opinion business will also depend largely on who is going to execute it. And you could have two great business models for it seemed to be based on two different kind of assumption of team and they are not universal. So you should write your own business with your instrument and keys with your own approach depending who you are and what your team. OK. There are plenty of business for that business model is just two way to describe innovate and communicate about your business. There are plenty of Mobile. We will talk really of being seen as a business model tool. But there are plenty of others who can bust me can't possibly say blah blah blah. The key idea is not to force you to use one or the other. They are complimentary. They are also from different moral So we VAMC business will Kanva us is commonly used practical and quite effective way taking into account the limits. But if you know why and how you use it you can do great things. Too many people are very often too quickly happy. The posted posted the signal and they believe that they need that slot. The idea is to guide you to help you with practical interaction with experiment with seems to do in a way. We should also not confuse business model with business pattern business. This is the idea that we can do for your package services. A few years. There are different ways to earn money. OK. And this will be part of the revenue stream for instance but it's a completely different kind of things. Okay good. The business model canvas is basically based on nine blocks that we try to understand deeply and where we will try to see the connection between the end of the Block are organized information. For me the main reason why the concept of business but at the core of the business model canvas there is the concept of what what's your value proposition. What do you propose to customer and actually more precisely what do customer buy from you. So is this really the meeting between the two. The problem is not one to fix and the solution to service the problem that you proposed today. Who are these other customer. We need to describe exactly who are the people who buy from you. How is actually how are you going to deliver. This is the whole concept of architectural value architectural value chain is actually a concept that has been again top of mind by all the laws in D.C. in 14. The concept is rooted in this context. This comes from that book and this is what I call PNL beer your beer. Support for the small paper block that you can use which is actually kind of very very quick high level financial statement telling how much do you hear. How much do you spend. What's the margin and how many of these margin do you need to sell on the gross yearly basis as a mother to effectively cover your cost and get some margin for blocks. What Who or what do you sell to deliver. How does it fit financially to the deal in nine. OK. The value proposition. What do you sell what the customer buy. Because we are connected to some kind of issue with you. You speak with them on a little way on the left side. You have a team you have resource you have intellectual properties you have special skills special experience. So activities need to be done. The idea is you do yourself. Where are you good. And maybe you partner with supplier or partner for decision maybe not the best one. If you if you build sinks you maybe you do have to like to deliver yourself maybe you use a delivery company that is really going to do an excellent job fitting your concept of service. So you will have with me or some examples to find the kind of conditions these partner will deliver to your customers. And of course at the end all this only can work if you earn more money than you spent. There are plenty of examples. One famous one is the concept of Nespresso. What they said want to do Heidi simplify it I think you meant to read it in the book of being seem to have a brain to have her at home do the experience of good Italian coffee. Who do they sell. Actually it's interesting because the experience of the Italian coffee bar I think quite a 15 bar about one minute coffee coffee pre-New that you need to do it in one minute. So you cannot for instance provide this kind of coffee to a group of 20 people in five minutes just physically impossible. So to kind of try and keep me interested by this unique experience. Our typical small go up market in at home or in office. OK. How do you deliver. Actually it's very interesting because the coffee industry the coffee industry in a classic way if you do you know you actually buy coffee in the last retail store and actually every week you could change of brand of coffee you just have to take another one here because the coffee is provided in an in. You do make a distinction at the beginning between buying the machine that it happened in a store in a store and buying the soup that should be extremely easy. So it's a kind of splitted experience between entering the world of Nespresso and living in New World of Nespresso. And the idea was that the relationship at the beginning of Nespresso you were not considered as a simple consumer that biography in Hristo to me and then used to do coffee producer. Actually the idea was to change his relationship and to consider the customer of the coffee as VIP. They got a membership card. The beginning. They first started to get a magazine do feeling low in the Maslow pyramid it was not good sugarfree But you belong to the exclusive group of this drink. Very very interesting. If you consider that a classical coffee consumer goes from two to me and then it moves from the producer to some kind of privilege relationship. This is for me a remarkable example on how to change the relationship to the customer and the customer to have loyalty to brands in terms of revenue. Also they split the machine that they didn't build themselves that license that the Knisley license to SCMS machine supplier producer and they have good revenue on the caps in terms of activities. It's a mix of seams is strong in promoting the previews producing and seeing that our partner like making and building the machine. I don't know what you think about it before my perspective. I believe the scheme is an incredible summary how how fantastic is the business model of this place. I want now to introduce some business case just to illustrate how powerful it is typically. I invite you may be here to take some time for yourself before I give you the secret. Some of them you could try to do and to imagine what's the business model of the Careful. What's the business model of Madden or what's the business model of some motorcycle brand or a company like Lord of king of shit ton of two of the big take you or your preferred vehicle or you prefer startup. Make a post on this issue and try for yourself to imagine what are the secret to the secret. What makes mudflow great. What makes food. What makes on the motorcycle great deal of the business model is exactly that one and that's the exact size you will have to do for yourself. That takes in classic and will see for yourself. The idea is to try to understand what makes your company this company great. And then actually you will see each of these company as some kind of secret internal source secret kind of approach that makes this company effective and effectively working take a few minutes look at each of them maybe get this video of this video work today and come back with today to see if you are able to understand the secret or the magic. And we like this concept of magic the magic of each of these. I let you work that easy take the paper nine block value proposition. Customer Relationship Cherelle How do you deliver yourself partners cost for you if you're ready. Let's take some categories. We also get degrees look at Greece and we also will see that your startup may fit into one of these big categories. You thought you will see when you start a business model can last. Generally we see treat type of behavior. You have people who start with resource they are talented in something a specialist of robotics and I want to build the startup in robotics because I'm Specialist of it. This is a resource based kind of company. You also have people who serve what works in the world maybe have experience. They have a customer and they have sold something to a customer and they want to do it again. These are what I call the client base kind of business. And then you have people who have a big vision and they want to change the world equally and they are maybe driven by the big vision is out of value but with issues centric business more and more of each of these three is more interesting than the other. But depending of course everything needs to be fulfilled and it's clear that if you start from just over you pass will be the collection. If you start from the source you will be finding customers if you start from vision you need to do books finding the lower end source. So do you do when you start your business will influence actually your own first stability. We will look for stability in the business model and what's important is to find stability and depending where you start the next thing to do and think about. Okay let's take a classic kind of combine a company like diod and first apologize. I will of course simplify. If I wrote the load is of course more Richel this but this is for me what I call engineer are the people selling their time. There are plenty plenty of startup based on saying Time sure you've got the jury if you're going to do that if you're a coach if you give Fergy start reading it set up your Ginette on the work like this. You have some kind of fixed cost. You need to get paid the Ramones you hire this at the beginning of the month. You have no locus tumor. It's not like that. And actually you and you is vulnerable. Each hour you sell you get an hour hour late. Your overview is basically the number of hours you sell multiplied by you price it at your feet. Typically you really get it to work if you have to in 20 most Maybe you need to work 12 days before being able to cover all your costs and then it's only from the 30 days that you start to make margin do you we. If you say to Steve Blank a startup need to find a business and scale it for us. It is very easy. You need to be sure that people are stupid. You want to hold that you and hour for the kind of services you provide. And the key question is how many hours I want to serve. And the key question is are you able to sell enough of these hours to largely from super cover your fixed cost if you will need to scale a business line like this. You need to dematerialize your time. For instance Kickstarter goes one way to do that. Realize my time is to create DESMUKH by providing the Moog. I see myself getting the same training how lots and lots of time together. Go do Mukhi a few days. And actually I will give you thousands of time. This is a way for me to dematerialized my time into you know a way to scale my own business. This is the secret. You understand that the secret of people setting their time is based on fixed cost that you should keep high enough limited valuable value and accumulation of time applies and that the seekers for getting materializing. You already have a greater understanding on how to operate. People sitting there kind of business. A company like Maduna do secret of must do now is actually that it's a franchise. The idea of refence Shives is you have work a company one time you optimize due process. The way to be burger is extremeness and the guys in a franchise probably do is a self chasing place. And actually if you want to work you need to have a good margin on each burger. Each single unit should generate a good morning. Because if you do 15 percent margin you need to open 6 more and probably 12 because you really want to split the margin between the local manager and yourself with Swenson's 15 percent margin. You really need to open 30 Tusshar maybe 20 years. I don't know that something like this to be able to share the of moving between difficult between you and the manager. So it's two of you should be in business with a big margin like 50 60 percent margin. And then you can't split it between local and and managing. So the secret of franchise good margin puts us at conception. The secret of manufacture for instance on down on the motorcycle or the motorcycle or whatever. Each motorcycle there is a higher risk all the pollution stock use of high risk on the stock innovation. So there is a TiVo. So your vision is based on the whole issue in the sales and actually is a key of all of the distributor's. So typically the motorcycle are distributed by a local distributor if you want to push your motorcycle to work or be good. We have an image of good ventilation and on the network of distributors and manufacturers of something has to work both on the ship with the brand and all that these two leaders web platform. For instance in that clip Paul Dockett your baby sitter go. It's a it's a market place. Actually it works like a marketplace dematerialize. And actually the idea is if you look for a guitar teacher you need to find a guitar teacher. And if you're a guitar teacher and you want to get it you need to find student. So the biggest challenge of what platform in the beginning is a balance between do two legs you need to have enough. And then even much happen you should get some of the action. But but you're the right person. And also be sure that people come in combat because if a student made a good art teacher. Here we are. Maybe they are for 10 years. Do you just get 10 percent or 20 percent of the first 10 euro euro through a course or do you say 5 percent of the entire life of a relationship between bores. And if you succeed to half the demand meeting the offering taking a part of the revenue and making it think then the beauty of fluff form they are highly highly scalable. But you need to fork condition for condition to be successful. The concept of market place like food for instance like a safe shop is exactly the same. Food is not a place where people are not selling. See yes what you're selling is a place where has to go and what they sell is actually highly visible. Placement of the product in the shop and the business model is a percentage of the cash. But also it is a strong cash management because they typically pay very late the supplier. OK so the concept of money place is basically being a good Cheeser having fantastic place getting customer having great experience and getting it back and then managing managing cash. So it's very similar to a marketplace the virtual place with these Cuyp before you demand to go. You need your father to call. You need to capture some amount and you need to make it happen. These are exactly the same kind of factor in a virtual or in theory in a really large marketplace if you want to be services. OK. If you provide enough for instance for a different kind of for all ensure for all the sports and you were up for you. All we can is this is that are you actually are in the business of what I call materializing digitalisation of an industry by providing to non digital specialists digital opportunities. This kind of business what I call the materialisation business you create or not for all the DGI of the world you create up for all the Bruce company of the world thats it. How do you do this. You need to find five and twenty IDOLO early adopter data OK to work with you. Ideally you should be a specialist of the industry. If you not you should have someone adopter that accept this vision is for you. The question is why you why are you going to be stunned that in the sports center for instance and actually the challenge for the sponsor tell us about why do they go with you instead of himself. That's an interesting kind of company. The beauty of this kind of business was that when they go to the B2B ritualize services it's easy to test it's easy to see if your project is just a dream project or can easily become true. There are plenty plenty of business in what you call to shift economy shutting Clemmie you could actually sudsing into a resource typically booking Neukom is selling more hotel rooms than any or even be sold more rooms than any kind of company. Why. Because they have good distribution channels. They actually used use that exists for transport more passengers than SNCF result as the cars themselves. They use people Kyar and they used to share a room of other people resource as the source of the means to disrupt. So blend of value change kind of experience to be a major seller. Actually you do something good yourself. You are a kind of head cast. The secret of handcuff the secret of experience is the secret of experience kind of compelling is experience its whole indeed user experience Durm value remains a challenge. It seems very classy but its all about how do you deliver. And how do you enjoy it. We could be also custom made travelers traveling. Anything that is based on user excellence in sourcing the secret is the excellence inexperience excellence in the different. These are a few examples of business model is your own work. What I expect from you is to start to Dreux first business model canvas of your organization. What's your business model canvas. And I would like to understand. I would like you to think about. What's your secret sauce. In which category of business do you grow. Are you a service based or work product or an experience. Are you a market place. What's your secret and what are your work just what are the things that are critically important for you and that will make your business successful. Because one of the key secret of entrepreneurs not to do everything and really know election like chicken wings or hacks will help but to focus on what's important and to focus on the critical success factors of your business. I really invite you in your own work to do that and not to go to the job three to the next chapter before you have been taking the time to seriously think about your fiancee. And first understanding of your secret service take your lunch with you. There's.