1. The document discusses the importance of business models for startups. It explains that the business model, not the product itself, is truly the "product" that a startup needs to focus on developing. 2. It provides definitions of key business model concepts like customer segments, value propositions, distribution channels, and revenue streams. 3. It introduces the Business Model Canvas as a tool for outlining business models through its nine standard components, and explains how each component can be used to systematically design a business model.

1. Business Model
@KareemSamara
Why Business Models Matter

2. Building a product is NOT “the
product”
of your startup.
Your Business Model is “The Product”.
Ash Maurya

3. What is Business Model?
Business Model simply answer those Qs:
Who is your customer?
What does the customer value?
How do you deliver value at an appropriate cost?
Peter Drucker

4. Business Model
Canvas

6. Why Business Model?
Fast
Instead of taking weeks or months, you can outline
multiple business models in an afternoon.

7. Why Business Model?
Concise
Because your business model has to fit on a single
page, you have to pick your words carefully and get
to the point. This is great practice for distilling the
essence of your business.

8. Why Business Model?
Portable
A single-‐page business model is much easier to
share with others, which means it will be read by
more people and be more frequently updated.

9. The Model
• Models not only help in the process of
planning and construction of new structures,
but also in the understanding the design of
existing structures.
• The Goal is simple: Increase our understanding
of the real world objects while eliminating the
unimportant details.

11. The Business Model Canvas
11
Value Propositions
Customer Relationships
Customer Segments
Distribution Channels
Revenue StreamsCost Structure
Key Resources
Key Partners
Key Activities

13. 1. Customer Segments
1
Customer Segments

14. • Who are your most important users and
customers?
Who are our most important customers?
• Mass Market
• Niche Market
• Segmented
• Diversified
• Multi-‐sided Platform
1. Customer Segments

16. 2. Value Proposition
Value Proposition
2

17. For each Customer Segment:
▪ What is their PAIN?
▪ What is the GAIN for them to solve their?
2. Value Proposition

18. 3. Distribution Channels
Distribution Channels
3

19. 3. Distribution Channels
How do you deliver this value?
• Through which Channels do our Customer Segments
want to be reached?
• How are our Channels integrated?
• Which ones work best?
• Which ones are most cost-‐efficient?

20. 4. Customer Relationships
Customer Relationships
4

21. 4. Customer Relationships
How do you
GET,
KEEP,
and GROW
your customer base?
How do you build a loyal and
enthusiastic tribe around your offer?

24. 5. Revenue Streams
Revenue Streams
5

25. 5. Revenue Streams
How do you generate cash from each customer segment?
• For what value are our customers really willing to pay?
For what do they currently pay?
• How are they currently paying?
How would they prefer to pay?

26. 6. Key Resources
Key Resources
6

27. 6. Key Resources
What infrastructure and resources do you need to deliver what you
promise?
● tools, space, locations
● personnel (﴾qualifications, in-‐house or sub)﴿
● licenses, intellectual property
● supplies (﴾components, assemblies)﴿
● financial requirements

28. 7. Key Activities
Key Activities
7

29. 7. Key Activities
What major activities (﴾deliverables)﴿ must
be produced – when and by who?

30. 8. Key Partners
Key Partners
8

31. 8. Key Partners
Partners
• Suppliers
• Developers
• Distributors
• Investors
• Collaborators
• Affiliates
Competitors
Alternatives
How does each partner help or hinder the business
model?

32. 9. Cost Structure
Cost Structure
9

33. 9. Cost Structure
What are the critical elements of the cost structure?
● Fixed costs
● Variable costs
● Resource, activity, partner costs
● Infrastructure, operational, cost of sales
● Payroll costs, benefits, bonus structure, taxes
● What are the risks, the unknowns?

34. The Business Model Canvas
Value Propositions
Customer Segments
Distribution Channels
Revenue StreamsCost Structure
Key Resources
Key Partners
Key Activities

37. Lean Startup

39. What Most Startups Want to Build

40. What They Should Build First

41. Eventually Build This

44. “People don’t want
¼” drill bits,
they want ¼” holes”
(c) 2012 Mary Caravella 7

45. Two drills on Amazon…
(c) 2012 Mary Caravella 8
Black & Decker SSL20SB 20-Volt
MAX Smart Select Lithium Ion Drill/
Driver with extra battery
DEWALT DCD760KL 18-Volt 1/2-Inch
Cordless Compact Lithium-Ion Drill/
Driver Kit (includes second battery)
$118.05 $179.99

46. Two drills on Amazon…
(c) 2012 Mary Caravella 9
} SmartSelect Clutch; Choose
your project icon and drill
automatically adjusts power and
speed for optimal results
} Gear indicator; 2-speeds
indicates high or low setting
} 20-volt MAX Lithium batteries
deliver extended run-time
} High torque motor delivers 175-
Inch-pounds
} Ergonomic design for improved
comfort and control
} Lightweight design (4.0 lbs) minimizes
user fatigue
} Dual speed range 0-500/0-1700 rpm
delivers optimal performance
} LED worklight provides increased
visibility in confined spaces
} Compact track saw batteries
(DC9181) are compatible with the
existing system of DEWALT 18v
power tools produced since 1996
} Compact size (8.2-inch) allows users
to fit into tight spaces;
$118.05 $179.99

47. Two different brands
for two different targeted markets
with different problems to be solved or goals to be achieved
(c) 2012 Mary Caravella 10

48.
Three DIMENSIONS of customer needs
(c) 2012 Mary Caravella 11
} Functional
} Social
} Psychological

49.
Why does he choose specific products/services?
(c) 2012 Mary Caravella 12
Because they help me
•Do something (Functional)
•Express myself with
others (Social)
•Experience something
enjoyable (Psychological)

50.
Why does he choose specific products/services?
(c) 2012 Mary Caravella 13
I need…
•A drill I can use for
everything
•Assurance I am buying a
reliable product

51.
Why does he choose specific products/services?
(c) 2012 Mary Caravella 14
Because they help me
•Improve my business
(Functional)
•Market my business (Social)
•Avoid risks (Psychological)
(and I’m a person too!)

52.
Why does he choose specific products/services?
(c) 2012 Mary Caravella 15
I need…
•Tools I can use all day
• Rugged
• Compatible power
supplies
•Tools that show I’m a
professional (and make me
feel like one)
• Distinctive styling
consistent with me

53. Your product is a tool to help
customers create value for
themselves.
The more you understand
customers and what they value
the more likely you will create
value
(c) 2012 Mary Caravella 16

54. } Functional value: helps solve
a problem or achieve a goal
} Social value: connects with or
distinguishes from others;
expresses something about
self to others
} Psychological value:
interesting, enjoyable, anxiety-
reducing, satisfying
(c) 2012 Mary Caravella 17

55. Now that we better
understand WHY people
choose what they do,
we turn to HOW they
do it
(c) 2012 Mary Caravella 19

58. Common Questions about
Lean Startup

59. Problem Vs. Unique Value Proposition?
Problem box is intended to capture the top
problems customers face in their environments
UVP is the marketing promise you make to them
that stems from the intersection of the Problem and
(﴾your)﴿ Solution boxes.

60. Example
On a job board site:
A job seeker’s problem:
“Getting noticed by a prospective employer”.
Job board service to offer solutions like
“professionally designed resume templates”.
but the UVP might be
“Land your dream job in 60 days or less”.

61. Where do competitors go on the Lean Canvas?
Your true competition is NOT who you think they
are, but who your customers think they are.

62. Unique Value Proposition Vs. Unfair Advantage?
UVP
is to capture a customer’s attention
Unfair Advantage
is to deter copy cats and competitors.

63. Example
UVP:
“Connect and share with the people in your life.”
UA:
Large network effects.
On Facebook:

64. Validating The Canvas
Everything on you put on your canvas is a HYPOTHESIS.
You must VALIDATE every element through -
• Discovery (your own data)
• Research (other people’s data)
• Testing (simulation, MVP)

65. 65
One More Thing

67. 67
Create your own
http://leanstack.com/lean-‐canvas/
http://businessmodelgeneration.com/canvas/bmc
https://canvanizer.com/choose-‐canvas

68. Books to Read
‣ The Four Steps to the Epiphany
‣ Lean Startup
‣ Playing To Win
‣ Understanding Michael Porter
‣ Good Strategy, Bad Strategy

69. Thank You
@KareemSamara
Social Media Trainer
Founder & CEO of
Social Business Kits
SBKits.com
Kareem@SBKits.com