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Business Model
Some Elements

1
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BUSINESS MODEL CANVAS

WHAT IS A BUSINESS MODEL?

Rationale of how an organization creates, delivers

and captures value.
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Blyk Example (https://en.wikipedia.org/wiki/Blyk)

 Blyk is a mobile marketing company that helps mobile companies to

improve customer retention
and/or generate incremental revenues through mobile advertising

 Blyk offers brands the unique opportunity to reach and engage with a
highly profiled opt-in audience. Resulting in a high ROI on the
advertising investments

 What does it sell? Who are the customers? What assets are required?
What is the competitive advantage of Blyk?
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Key Issues
and
Questions
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Three broad questions?

 What is being sold and what are the asset requirements of this
transaction?

 What is the value proposition for the customer?

 Substitute/Replace an existing solution by a better one
 Complement existing offerings to make it more valuable
 Enable existing offering to make it more efficacious

 What is the value proposition for the seller?

 What is the mechanism to appropriate value?
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The three models with some examples

Replacements Supplements Enablers

Sectors (Filling voids)

Health Piramal Biosense

Aravind Eyecare
eSwasthya Forus
Skill and Education Empathy Learning Butterfly Fields
iStar
Systems Lead School
Sanitation/Waste
Management GARV Toilets Saahas Zero waste Green Nerds
Sulabh Revive Recity

Utilities including energy

access and water Sarvajal, Drinkwell Drinkwell Boond
Innokriti
Grampower Onergy
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Product/Service, Rights and Assets?

 What product or service is being sold?

 What types of rights are being sold?
 Right of ownership
 Right to use
 Right to be matched (buyers and sellers)
 What types of assets (or their use) are being sold?
 Time, attention, physical asset, network, technology?
 What types of assets are required to provide the product/service?
 Need of complementary assets has to be ascertained
 Specialized, co-specialized and generic complementary assets
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Value Proposition for the customer?

 How will the firm create value and for whom?

 Value creating elements could be
 New product/service/feature/functionality
 Improved or modified offering
 Quality of service (including delivery)
 Pricing
 Who are the customers? Customer segmentation may include
 Demographics, geography
 Technology sophistication…
 Who pays vs. who use?
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How is the value being

appropriated?
 Lower costs? How is it achieved (innovation)?
 System integration? Aggregation?
 Size of the market? Economies of scale?
 Collaboration and distribution of investments, costs and benefits?
 Appropriability conditions? (Partner selection)
 Ownership of IPRs? (Patents, trademarks, copyrights..)
 Imitation difficult (e.g., tacitness of knowledge)
 Access to complementary assets?
 Access to customers? (User profiles?)
 Branding? (known brand)
 Complementary technologies?
 Elements of the supply chain (marketing & distribution)?
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More on value generation and
appropriation
 Should one look at generation and appropriation only through the lens of
private profits?

 Appropriate forms for value generation and appropriation

 The case for social ventures in the context of market failures

 Should one consider organizational forms also as a part of business models?

 Grant based organization (NGOs. State or state sponsored)
 Collectives and cooperatives
 Social business (Yunus model)
 For profit social ventures (low profit expectations)
 Public-private partnership models
 For profit regular ventures

 Should the form change with nature of government and market failures?
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Key learnings?

 Differences in location in the value network important

 Userights may require different payment and maintenance models
than ownership rights
 Substitutes,complementars and enablers may need to work with
different business models
 Requirements of complementary assets
 Sustainability of the competitive advantage
 Irrespective
of the location, the issues relating to value proposition
and appropriation are critical to complete the key elements of the
business model
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BUSINESS MODEL CANVAS
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Value propositions

 What value do we deliver to

customers?

 Which one of our customer’s

problems are we solving?

 What is our organization’s

competitive advantage?

 Which customer needs are we

satisfying?

 What bundles of products and

services are we offering to each
customer segment?
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Customer segments

 For whom are we creating value?

 Who are our most important customers?

 B2B vs B2C
 Users vs payers

 Where do they live?

 How old are they?

 How much do they earn?

 Where do they “hang” out?

 How will they interact with the

products?
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BUSINESS MODEL CANVAS
PRODUCT
MARKET FIT

KEY KEY VALUE CUSTOMER CUSTOMER

PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS
PROPOSITION
Whom am I
What product or
selling to?
service
User?
are you building?
CUSTOMER &
KEY FEATURES
BENEFICIARY
RESOURCES CHANNELS
PAIN PAIN
KILLERS RELIEF
GAINS GAINS

MVP ARCHETYPE
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Channels

 Through which channels do our

customers want to be reached?

 How are we reaching them now?

 How are these channels

integrated?

 Which channels work best?

 Which ones are the most cost-

efficient?

 How are we integrating them with

customer routines?
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Customer relationships

 What type of relationship does each

segment of our customers expect us to
establish and maintain with them?

 Which ones have we established?

 How costly are they?

 How are they integrated with the rest

of our business model?
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Key activities

 What key activities do our value

propositions require?

 What key activities do our

distribution channels require?

 What key activities do our

customer relationships require?

 What key activities do our revenue

streams require?
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Key resources

 What key resources do our value

propositions require?

 What resources do our distribution

channels require?

 What resources do our customer

relationships require?

 What resources do our revenue

streams require?
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Key partnerships

 Who are our key partners?

 Who are our key suppliers?

 Which key resources are we

acquiring from partners?

 Which key activities do partners

perform?

 How dependent are we on our

partners?
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Revenue streams

 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?

 How much does each revenue

stream contribute to overall
revenues?
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Revenue Models for CivicTech
 SaaS - Subscription model, upgrades and freemium
 User charges directly from consumers or charge on usage basis/asset
sharing model (Sharing CT scan machines hospitals and clinics)
 Consulting
 Product sales – tablets with sessions, toilets…
 Monetize CivicTech data – syndicated data
 Target advertising
 Commission or transaction fee
 Matching, crowd-funding, application processes for government services)
https://ciie.co/pdf/Catalyzing%20Civic%20Tech%20-%2010.15.pdf
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Cost structure

 What are the most important costs

inherent in our business model?

 Which key resources are the most

expensive?

 Which key activities are the most

expensive?
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Old Flipcart – Online shopping for all

Indians?
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS
PROPOSITION
Publishers • Supply chain Through email, • Urban Indian
Logistics optimization • Convenience online chat and book lovers
• Delivery • Wide selection database marketing • Internet-
optimization • Cheaper
• SEO
connected
• Trust (CoD) people with
• Recommendations
CHANNELS
no credit
KEY cards
RESOURCES • First-time
Web
• Delivery staff online
• Technology shoppers
capability

NTADBM-RB
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Assessing Attractiveness of the Business
Model
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS
PROPOSITION
Lower partner High switching costs Lower
dependencies Sustainability of customer
the competitive concentration
advantage

CHANNELS
KEY
RESOURCES
Lower marketing
Platforms to create expenditure
network effects
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Let’s explore BMC…

Allocation for BMC Exercise

Nepra Let’s Recycle Groups 1 and 2
GARV Toilets Groups 3 and 4
Transerve Technologies Groups 5, 6 and 11
Gaia Smart Cities Groups 7 and 8

Haqdarshak Groups 9 and 10

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Business Model Canvas

APPENDIX
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Business Model Canvas
short movie
 https://www.youtube.com/playlist?list=PLBh9h0LWoawphbpUvC1DofjagNqG1Qdf3

Or

 https://goo.gl/ziQ8pO
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More BMCs??

 http://bmimatters.com/tag/multi-sided-platform/

Google: http://bmimatters.com/2012/03/29/understanding-google-business-model/

Facebook: http://bmimatters.com/2012/04/10/understanding-facebook-business-model/

Comparing Facebook and Google:

http://bmimatters.com/2012/04/18/comparing-facebook-and-google-business-models/

LinkedIn: http://bmimatters.com/2012/05/16/understanding-linkedin-business-model/

Visa: http://bmimatters.com/2012/03/19/understanding-visa-business-model/