Thinking and building a Start-Up in a Commercial Organisation

I’ve taken the role of developing and commercializing a new opportunity with my organisation.  It’s not the first time I’ve taken on such as task so it’s a matter of applying the lessons and tools I’ve used before.  So, how do you start thinking and building a Start-Up within a Commercial Organisation?

Lots of reading for the next week or so.

This is not a book review but there’s a couple of books and a tool-set I wished was around in those earlier days – Eric Ries Lean Start up and The Start-Up Owners Manual –  the information provided a way of thinking and approaching the same old problem of new business creation but with a new model and approach that resonated more with Silicon Valley entrepreneurship than the MBA business plan approach.

A key element of that is the one page Business Model Canvas.

Version       Designed for:      Date:

7. Key Partners

  • Who are our Key Partners?
  • Who are our key suppliers?
  • Which Key Resources are we acquiring from partners?
  • Which Key Activities do partners do?

Motivations for partnerships:

Optimization and economy

Reduction of risk and uncertainty

Acquisition of particular resources and activities

8. Key Activities

  • What Key Activities do our Value Propositions require?
  • Our Distribution Channels?
  • Customer Relationships?
  • Revenue streams?

Production

Problem Solving

Platform/Network

1. Value Propositions

  • What value do we deliver to the customer?
  • Which one of our customer’s problems are we helping to solve?
  • What bundles of products and services are we offering to each Customer Segment?
  • Which customer needs are we satisfying?

Characteristics

Newness

Performance

Customization

“Getting the Job Done”

Design

Brand/Status

Price

Cost Reduction

Risk Reduction

Accessibility

Convenience/Usability

4. Customer Relationships

  • What type of relationship does each of our Customer
  • Segments expect us to set up and keep up with them?
  • Which ones have we established?
  • How are they integrated with the rest of our business model?
  • How costly are they?

Examples

Personal assistance

Dedicated Personal Assistance

Self-Service

Automated Services

Communities

Co-creation

2. Customer Segments

  • For whom are we creating value?
  • Who are our most important customers?

Mass Market

Niche Market

Segmented

Diversified

Multi-sided Platform

6. Key Resources

  • What Key Resources do our Value Propositions need?
  • Our Distribution Channels? Customer Relationships?
  • Revenue Streams?

types of resources

Physical

Intellectual (brand patents, copyrights, data)

Human

Financial

3. Channels

  • Through which Channels do our Customer Segments
  • want to be reached?
  • How are we reaching them now?
  • How are our Channels integrated?
  • Which ones work best?
  • Which ones are most cost-efficient?
  • How are we integrating them with customer routines?
9. Cost Structure

  • What are the most important costs inherent in our business model?
  • Which Key Resources are most expensive?
  • Which Key Activities are most expensive?

Is your business more:

Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing)

Value Driven ( focused on value creation, premium value proposition)

sample characteristics:

Fixed Costs (salaries, rents, utilities)

Variable costs

Economies of scale

Economies of scope

5. Revenue Streams

  • For what value are our customers really willing to pay?
  • For what do they now pay?
  • How are they currently paying?
  • How would they prefer to pay?
  • How much does each Revenue Stream contribute to overall revenues?

Types:

Asset sale

Usage fee

Subscription Fees

Lending/Renting/Leasing

Licensing

Brokerage fees

Advertising

fixed pricing

List Price

Product feature dependent

Customer segment dependent

Volume dependent

dynamic pricing

Negotiation( bargaining)

Yield Management

Real-time-Market

The one page business model canvas forces you to look at all elements of the proposed business.  It’s a real-time worksheet that allows you to challenge your assumptions, test your logic and if necessary pivot like a half back.

Create your own Business Model Canvas