So you have an idea for a startup.
That's great.
My strong suggestion always is
capture the critical assumptions -
the critical hypotheses underlying
your business model and test them
before you spend all the time and
effort and expense of developing a
product. And that's what we'll focus
on in this video.
This whole series of videos actually
is the business model generation
process and specifically getting
into the business model canvas
explained, the canvas being a very
useful tool in capturing that
business model.
Hi I'm Steve Morris and I use this
StartupSOS channel to provide
practical how to advice
for first time entrepreneurs.
The topic today Business
Model Generation and The Business
Model Canvas explained.
So what is a business model.
Well first of all
it's a collection of hypotheses
especially for a startup.
You've got a new business model.
You really haven't tested it.
So you think you know what
the business model is.
But these are hypotheses
and some of them are probably
wrong. So that's a good thing to
keep in mind first okay.
But what is then a business model.
Well I like the definition they use
in the Business Model Generation
book which is the original source
book on the business model canvas.
I strongly suggest you check it out
it's worth a read.
There's a link to buy one down
in the notes.
So what's the definition from the
book. A business model describes
how an organization creates
delivers and captures
value.
It creates delivers and captures
value. Now that's a little bit
abstract.
Fortunately they break it down
into more detail in the form
of the Business Model Canvas
template.
So nine sections
that really define different aspects
of your business model
and the canvas is a nice
visual tool.
Put it up on a wall and
get involved in a team process then
of developing -
brainstorming your business
model.
So let's walk through the sections
of the canvas.
The central point on the canvas is
the value proposition everything
builds off of that.
Now we did a whole series of videos
on value proposition and the value
proposition canvas
which is a great tool to use to
really zero in on your value
proposition. It's actually kind of a
complex thing.
So I'd suggest you check out that
series. There's a link to that up
above to really help you flesh
out what is your value proposition.
So that's the centerpiece of the
business model canvas.
Now the right side of the canvas
is very much focused on
the customer orientation.
So for example things like what
are the Customer Segments
in your market and what segment will
you target first.
What is the Customer Relationship
expectation in this market.
When you sell to customers, what
kind of sales support are they
expecting what kind of experience
are they expecting.
What Channels do you plan to
use to market and sell
your product.
Again these are all hypotheses
right. And then finally revenue
streams. How do you believe you'll
charge for your
the value that you're delivering to
customers and what price
will you charge for it.
So that's the right side.
Now the left side of the canvas is
more oriented toward things that are
ultimately going to drive cost.
What for example are the
Partnerships that you'll need to
develop to be successful in this
market. What are the Key Activities
involved in this kind
of a business and what are the Key
Resources people
capital intellectual property.
What are the key resources you'll
need to be successful
in this business and how does
all that result in a
Cost Structure for the business.
So that is the overview
of the canvas.
Now and follow on videos we're
going to go into each of these
sections in detail
to give you a lot of context to help
you fill out your business
model canvas and complete
your own business model
development process.
And that's it for this video on the
business model canvas explained
and in general the business model
generation process.
Thanks for listening if this is
helpful please click Like and Share
it and leave a note in the comment
section What are you
frustrated about or working on in
terms of documenting your business
model. And if you haven't subscribe
to the channel yet please do that
down here in the corner.
Stay tuned to the playlist that
we're building for the business
model canvas because we'll have
a lot more videos in the sequence
there's a link to the play list
right below.
That's it for today's video.
Thank you very much for watching.