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MaRS ENTREPRENEURSHIP 101. NOV 29, 2012 : # ENT101
BUSINESS MODEL CANVAS

Not a static business plan
Learn – Idea – Build – Code – Measure – Data

Business Model Canvas

1. Who do you serve <- specific, self-referencing

2. What problem do you solve? Value proposition

3. How do people find you? Channels

4. What types of relationships do you have w/customers?

5. How do you get paid ? Revenue streams

6. What things do you do? Key activities

7. What resources do you need? key resources

8. What else do you need? key partners

9. What does it cost to operate this model? –> key levers, not all costs; Cost structure

Nespresso
Single-serve coffee cups
1970 invented
1976 patented
1986 launched
1988 … flopped

1989
Separate
machine from coffee

Pivot
Was wildly successful

Made Sold Sales Training Coffee Sales
3rd parties Independent retail Nespresso Direct to consumer

30% compound annual growth rate! –> 20 billion capsules!

Business idea
Hypothesis

Read the Lean Startup: Innovation accounting

Great way to communicate with your team, too. Whiteboard!
Take pictures!
What did we do before? Colour-coded Post-its

Homework:
Draw this & test your assumptions,
box by box
falsifiable hypothesis

Nespresso

Coffee machine makers
Distribution
brand patents factories
Marketing production logistics (NEW)

Restaurant quality espresso at home

Retail Nespresso call centre boutiques
Member

High end households

Distribution and sales
marketing
manufacturing

Capsule sales
hardware sales

Fit your value proposition on a Post-It
Whiteboard + Post-Its = awesome

Great for talking to other people
(potential team members, cofounders, staff)

When you’ve got it mostly figured out, make it visual!
but don’t let pretty pictures
stop you from changing it!

Books to Read
Business Model Generation (& lean startup)
Running Lean

Q&A
Q: Business plan vs model?
A: Depending on investor. Concise summary / outline in business model canvas + spreadsheets, plan.
Q: Shortcomings?
A: Lean canvas may be better for some. Defensibility not particularly called out in the canvas
Q: Nespresso pivoting?
A: Customer research, etc.
Q: Very general?
A: Most startups aren’t killed by competition –> usually other reasons. Try making for competitors too?
Q: Evaluation tips?
A: Validate each of the boxes. Canvas can’t tell you if something is a good idea or not
Q: Updating?
A: Be objective about what you put on the business model canvas. change after experiments
Q: Reminder why you’re doing this value?
A: Yes, that’s part of it! Jolts you out of =(