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Creating
Start-Up
Success 101
AlexOsterwalder.com               SteveBlank.com
@business_design                  @sgblank
...
this presentation combines two global bestsellers




                                    +


BusinessModelGeneration.com ...
So what makes for a
successful start-up?
Start with a brilliant
founder like...
Mike, 34
Stanford
Alumnus
he used to be an...
Experienced
Exec
All his operating
experience built up
some...
...outstanding
credentials!
One day Mike has...
A “killer”
product idea!
A “killer”
product idea!
he’s really
passionate about it
Mike’s experienced.
He knows how to test his
idea using...
...market
research
The research looks good!
Mike moves forward, and
writes a fantastic....
Great!
Based on the credentials,
research, and plan, Mike has
secured the final piece...
...VC Funding!
Money in hand,
Mike get’s started on
...building his
      start-up.
He makes the headlines
of every major...
... and is invited to give...
...keynote talks
Mike and his
start-up are
   on a roll!
How likely is his
business to
succeed?
Despite the experience,
research and plan...
...Mike
slipped up.
Let’s help Mike
with 5 things he
 didn’t know.


                   29
1    No business
    plan survives
         the first
        customer
         contact.
Sticking to a planning
document works for a
known future, not for a
start-up context.

Plan’s fail in start-ups.
2    It’s the
    business
     model,
     stupid.
Hey Mike, your plan was
to build a company, but
did your plan include a
Business Model?
“A business model describes
the rationale of how an organization
creates, delivers, and captures value”
Here are the 9 building blocks of
a business model:
CUSTOMER SEGMENTS




which customers and users are you serving?
which jobs do they really want to get done?
             ...
VALUE PROPOSITIONS




 what are you offering them? what is that
  getting done for them? do they care?
                  ...
CHANNELS




how does each customer segment want to be reached?
         through which interaction points?

              ...
CUSTOMER RELATIONSHIPS




what relationships are you establishing with each segment?
       personal? automated? acquisit...
REVENUE STREAMS




  what are customers really willing to pay for? how?
are you generating transactional or recurring rev...
KEY RESOURCES




which resources underpin your b.model?
      which assets are essential?

                              ...
KEY ACTIVITIES




which activities do you need to perform well in
       your b.model? what is crucial?

                ...
KEY PARTNERS




which partners and suppliers leverage your model?
           who do you need to rely on?

               ...
COST STRUCTURE




what is the resulting cost structure?
which key elements drive your costs?

                           ...
key       value          customer
            activities   proposition       relationships




     key                   ...
“Hmm, interesting so
  what do I make of
              that?”
use it as a tool to...
sketch out your business model
building
 block
building
     block                building
               building
                block      block




building
 block
building
                       block                                            building
                                ...
This tool is called the
Business Model Canvas
(download with instructions at
www.businessmodelgeneration.com/downloads)
3     Take time
        to think
        through
     alternative
    possibilities.
the same technology, product, or service
can have numerous business models
try sketching out alternative
business models by asking
yourself...
transactional vs.          product vs. service        scale vs. scope
recurring revenues
                                 ...
only make a first choice after prototyping
and thinking through several models...
OK. You’ve got your model,
but you’re not done yet...
4   Your business
     model idea is
      just a set of
      hypotheses.
a business model might look great on
paper...

                  building
                   block

                      ...
... just a set of hypotheses

        guess                guess
          guess
                  guess                gu...
...so you need to get out of the
building and...
test each hypothesis
(e.g. with customers)
this business model testing process is
called Customer Development

customer            customer     customer    company
d...
two different phases...
search

customer            customer     customer    company
discovery           validation    creation    building


    ...
and it starts with...
... verifying
every
hypothesis




  customer              customer     customer    company
  discovery             valida...
test your hypotheses


        product
       market type
       competition
test your hypotheses


                       problem
                       customer
                         user
      ...
test your hypotheses




              channel
test your hypotheses

                                       demand
                                       creation
      ...
to accomplish this you will need a special
and agile ...
customer
development
team
A team that ...
... gets out of the
building!
... to test and adapt your model
             agile business
                 model                        demand
        ...
you need to adapt the
business model until
you can prove it works




customer            customer     customer    company...
“How do I prove
a business
model works?”
One example of “proving” is
concluding the ...
... sales of a “minimum viable
feature set”
This adaptation process is called ...
the pivot




customer            customer     customer      company
discovery           validation    creation      build...
so do you have any “factual” proof?
Congratulations!
You finished the search
process!
So don’t ever forget ...
5
    Don’t build your
     company, until
     you’ve verified
      your Business
              Model
or you’ll risk ...
Burning your cash while
searching for a working
business model
execution is not search
execution follows search
Build when you’ve found
your model
only then execute:
scale your marketing



customer            customer     customer    company
discovery           validation    creation   ...
and build your org
                                         structures



customer            customer     customer    com...
1   No business plan survives the
    first customer contact.

2   It’s the business model, stupid.

3   Take time to thin...
you can read more about business models and the
customer development process here:




                                   ...
Good
Luck!
BusinessModelGeneration.com StevenBlank.com/books.html
AlexOsterwalder.com         SteveBlank.com
@business_des...
Creating Start-Up Success
Creating Start-Up Success
Creating Start-Up Success
Creating Start-Up Success
Creating Start-Up Success
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Creating Start-Up Success Slide 1 Creating Start-Up Success Slide 2 Creating Start-Up Success Slide 3 Creating Start-Up Success Slide 4 Creating Start-Up Success Slide 5 Creating Start-Up Success Slide 6 Creating Start-Up Success Slide 7 Creating Start-Up Success Slide 8 Creating Start-Up Success Slide 9 Creating Start-Up Success Slide 10 Creating Start-Up Success Slide 11 Creating Start-Up Success Slide 12 Creating Start-Up Success Slide 13 Creating Start-Up Success Slide 14 Creating Start-Up Success Slide 15 Creating Start-Up Success Slide 16 Creating Start-Up Success Slide 17 Creating Start-Up Success Slide 18 Creating Start-Up Success Slide 19 Creating Start-Up Success Slide 20 Creating Start-Up Success Slide 21 Creating Start-Up Success Slide 22 Creating Start-Up Success Slide 23 Creating Start-Up Success Slide 24 Creating Start-Up Success Slide 25 Creating Start-Up Success Slide 26 Creating Start-Up Success Slide 27 Creating Start-Up Success Slide 28 Creating Start-Up Success Slide 29 Creating Start-Up Success Slide 30 Creating Start-Up Success Slide 31 Creating Start-Up Success Slide 32 Creating Start-Up Success Slide 33 Creating Start-Up Success Slide 34 Creating Start-Up Success Slide 35 Creating Start-Up Success Slide 36 Creating Start-Up Success Slide 37 Creating Start-Up Success Slide 38 Creating Start-Up Success Slide 39 Creating Start-Up Success Slide 40 Creating Start-Up Success Slide 41 Creating Start-Up Success Slide 42 Creating Start-Up Success Slide 43 Creating Start-Up Success Slide 44 Creating Start-Up Success Slide 45 Creating Start-Up Success Slide 46 Creating Start-Up Success Slide 47 Creating Start-Up Success Slide 48 Creating Start-Up Success Slide 49 Creating Start-Up Success Slide 50 Creating Start-Up Success Slide 51 Creating Start-Up Success Slide 52 Creating Start-Up Success Slide 53 Creating Start-Up Success Slide 54 Creating Start-Up Success Slide 55 Creating Start-Up Success Slide 56 Creating Start-Up Success Slide 57 Creating Start-Up Success Slide 58 Creating Start-Up Success Slide 59 Creating Start-Up Success Slide 60 Creating Start-Up Success Slide 61 Creating Start-Up Success Slide 62 Creating Start-Up Success Slide 63 Creating Start-Up Success Slide 64 Creating Start-Up Success Slide 65 Creating Start-Up Success Slide 66 Creating Start-Up Success Slide 67 Creating Start-Up Success Slide 68 Creating Start-Up Success Slide 69 Creating Start-Up Success Slide 70 Creating Start-Up Success Slide 71 Creating Start-Up Success Slide 72 Creating Start-Up Success Slide 73 Creating Start-Up Success Slide 74 Creating Start-Up Success Slide 75 Creating Start-Up Success Slide 76 Creating Start-Up Success Slide 77 Creating Start-Up Success Slide 78 Creating Start-Up Success Slide 79 Creating Start-Up Success Slide 80 Creating Start-Up Success Slide 81 Creating Start-Up Success Slide 82 Creating Start-Up Success Slide 83 Creating Start-Up Success Slide 84 Creating Start-Up Success Slide 85 Creating Start-Up Success Slide 86 Creating Start-Up Success Slide 87 Creating Start-Up Success Slide 88 Creating Start-Up Success Slide 89 Creating Start-Up Success Slide 90 Creating Start-Up Success Slide 91 Creating Start-Up Success Slide 92 Creating Start-Up Success Slide 93 Creating Start-Up Success Slide 94 Creating Start-Up Success Slide 95 Creating Start-Up Success Slide 96 Creating Start-Up Success Slide 97 Creating Start-Up Success Slide 98 Creating Start-Up Success Slide 99 Creating Start-Up Success Slide 100 Creating Start-Up Success Slide 101 Creating Start-Up Success Slide 102
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Boost the success chances of your start-up by understanding Business Model Generation and Customer Development. You won't regret!

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Creating Start-Up Success

  1. Creating Start-Up Success 101 AlexOsterwalder.com SteveBlank.com @business_design @sgblank Contribution by Alan Smith @thinksmith
  2. this presentation combines two global bestsellers + BusinessModelGeneration.com StevenBlank.com/books.html
  3. So what makes for a successful start-up?
  4. Start with a brilliant founder like...
  5. Mike, 34 Stanford Alumnus
  6. he used to be an...
  7. Experienced Exec
  8. All his operating experience built up some...
  9. ...outstanding credentials!
  10. One day Mike has...
  11. A “killer” product idea!
  12. A “killer” product idea! he’s really passionate about it
  13. Mike’s experienced. He knows how to test his idea using...
  14. ...market research
  15. The research looks good! Mike moves forward, and writes a fantastic....
  16. Great! Based on the credentials, research, and plan, Mike has secured the final piece...
  17. ...VC Funding!
  18. Money in hand, Mike get’s started on
  19. ...building his start-up.
  20. He makes the headlines of every major...
  21. ... and is invited to give...
  22. ...keynote talks
  23. Mike and his start-up are on a roll!
  24. How likely is his business to succeed?
  25. Despite the experience, research and plan...
  26. ...Mike slipped up.
  27. Let’s help Mike with 5 things he didn’t know. 29
  28. 1 No business plan survives the first customer contact.
  29. Sticking to a planning document works for a known future, not for a start-up context. Plan’s fail in start-ups.
  30. 2 It’s the business model, stupid.
  31. Hey Mike, your plan was to build a company, but did your plan include a Business Model?
  32. “A business model describes the rationale of how an organization creates, delivers, and captures value”
  33. Here are the 9 building blocks of a business model:
  34. CUSTOMER SEGMENTS which customers and users are you serving? which jobs do they really want to get done? images by JAM
  35. VALUE PROPOSITIONS what are you offering them? what is that getting done for them? do they care? images by JAM
  36. CHANNELS how does each customer segment want to be reached? through which interaction points? images by JAM
  37. CUSTOMER RELATIONSHIPS what relationships are you establishing with each segment? personal? automated? acquisitive? retentive? images by JAM
  38. REVENUE STREAMS what are customers really willing to pay for? how? are you generating transactional or recurring revenues? images by JAM
  39. KEY RESOURCES which resources underpin your b.model? which assets are essential? images by JAM
  40. KEY ACTIVITIES which activities do you need to perform well in your b.model? what is crucial? images by JAM
  41. KEY PARTNERS which partners and suppliers leverage your model? who do you need to rely on? images by JAM
  42. COST STRUCTURE what is the resulting cost structure? which key elements drive your costs? images by JAM
  43. key value customer activities proposition relationships key customer partners segments cost revenue structure key streams resources channels images by JAM
  44. “Hmm, interesting so what do I make of that?”
  45. use it as a tool to...
  46. sketch out your business model
  47. building block
  48. building block building building block block building block
  49. building block building block building block building building building block block block building block building building block block buildin g building block building block block
  50. This tool is called the Business Model Canvas (download with instructions at www.businessmodelgeneration.com/downloads)
  51. 3 Take time to think through alternative possibilities.
  52. the same technology, product, or service can have numerous business models
  53. try sketching out alternative business models by asking yourself...
  54. transactional vs. product vs. service scale vs. scope recurring revenues blue ocean vs. red niche market vs. ocean direct sales vs. mass market indirect sales personal vs. capital expenditure vs. automated open vs. closed partnership disruptive vs. difficult questions human intensive vs. incremental acquisition vs. retention system intensive tailor-made vs. mass physical vs. virtual production one customer segment vs. another copyright vs. copyleft fixed vs. variable paid vs. free costs distributed vs. in-sourcing vs. out- advertising vs. centralized sourcing sales
  55. only make a first choice after prototyping and thinking through several models...
  56. OK. You’ve got your model, but you’re not done yet...
  57. 4 Your business model idea is just a set of hypotheses.
  58. a business model might look great on paper... building block building buildin block g block building block block building block ... but be buildin block g building building block block building block build blocing k buildin block g honest that it’s buildin block g
  59. ... just a set of hypotheses guess guess guess guess guess guess guess guess guess guess guess guess
  60. ...so you need to get out of the building and...
  61. test each hypothesis (e.g. with customers)
  62. this business model testing process is called Customer Development customer customer customer company discovery validation creation building pivot
  63. two different phases...
  64. search customer customer customer company discovery validation creation building pivot execution
  65. and it starts with...
  66. ... verifying every hypothesis customer customer customer company discovery validation creation building pivot
  67. test your hypotheses product market type competition
  68. test your hypotheses problem customer user payer
  69. test your hypotheses channel
  70. test your hypotheses demand creation problem channel product customer (customer) market type user (problem) competition channel payer validate business pricing model model
  71. to accomplish this you will need a special and agile ...
  72. customer development team
  73. A team that ...
  74. ... gets out of the building!
  75. ... to test and adapt your model agile business model demand adaptation creation problem channel product customer (customer) market type user (problem) competition payer customer development channel team validate business pricing model model
  76. you need to adapt the business model until you can prove it works customer customer customer company discovery validation creation building pivot
  77. “How do I prove a business model works?”
  78. One example of “proving” is concluding the ...
  79. ... sales of a “minimum viable feature set”
  80. This adaptation process is called ...
  81. the pivot customer customer customer company discovery validation creation building pivot (repeat * until proven)
  82. so do you have any “factual” proof?
  83. Congratulations!
  84. You finished the search process!
  85. So don’t ever forget ...
  86. 5 Don’t build your company, until you’ve verified your Business Model
  87. or you’ll risk ...
  88. Burning your cash while searching for a working business model
  89. execution is not search
  90. execution follows search
  91. Build when you’ve found your model
  92. only then execute:
  93. scale your marketing customer customer customer company discovery validation creation building pivot execution
  94. and build your org structures customer customer customer company discovery validation creation building pivot execution
  95. 1 No business plan survives the first customer contact. 2 It’s the business model, stupid. 3 Take time to think through alternative possibilities 4 Your business model idea is just a set of hypotheses. 5 Don’t build your company, until you’ve verified your Business Model
  96. you can read more about business models and the customer development process here: + BusinessModelGeneration.com StevenBlank.com/books.html
  97. Good Luck! BusinessModelGeneration.com StevenBlank.com/books.html AlexOsterwalder.com SteveBlank.com @business_design @sgblank Contribution by Alan Smith @thinksmith
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Boost the success chances of your start-up by understanding Business Model Generation and Customer Development. You won't regret!

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