Venture Models

Question 1

What is a venture model?

Answer 1

the essence of a viable venture; how you create value for customers and society

Question 2

Business Model Canvas

Answer 2

customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships

Question 3

Building block: customer sgement

Answer 3

determine the customer segment you will target first (early adapters) and list existing alternatives

Question 4

Building block: customer sgement

Answer 4

determine the customer segment you will target first (early adapters) and list existing alternatives (Netflix: current customers, families, movie buffs)

Question 5

Building block: problem

Answer 5

describe top 1-3 problems your customer needs solved; list other user roles that may interact with your venture (Netflix: too long to get movies, limited queue)

Question 6

Building block: unique value proposition

Answer 6

a simple, clear message of what problem we are solving or need we are satisfying; focus on finished story benefits; answer what, who, and why (Netflix: blockbuster in your living room)

Question 7

Building block: solution

Answer 7

top features or capabilities for each problem (Netflix: streaming service with many movies)

Question 8

Building block: channels (marketing)

Answer 8

inbound (let customers find you through blog, webinars) (N: let people blog about streaming)
outbound (push to reach customers through TV ads, cold calling) (N: ads on envelope)

Question 9

Building block: cost structure

Answer 9

(can signal branding and positioning)
cost driven: minimize costs whenever possible (Southwest)
value driven: focus on premium value proposition and personalized service (luxury hotels)

Question 10

Building block: revenue streams

Answer 10

how a company makes money
transaction revenues: one-time purchase
recurring revenues: ongoing payments

Question 11

Building block: key metrics

Answer 11

1-2 measurable and trackable activities that will drive usage of your product or service (measurable goals) (N: create streaming platform, get 1 mil customers)

Question 12

Building block: unfair advantage

Answer 12

anything that cannot be easily copied or bought by your competitors (insider info, expert endorsements, dream team, personal authority, large network effects, community, existing customers (N), organic SEO ranking)

Question 13

channel phases

Answer 13

path to customer

awareness, evaluation (how to help customers evaluate your product), purchase, delivery, after sales

Question 14

ways to generate revenue

Answer 14

asset sale: phone case (amazon)
usage fee: hotel rooms 
subscription fee: gym membership
lending/renting: zipcar
licensing: movies
brokerage: real estate
advertising: TV ads

Question 15

types of cost structures

Answer 15

fixed
variable
economies of scale
economies of scope

Question 16

fixed pricing

Answer 16

predetermined based on static variables (ex. netflix, or ISPs)

Question 17

dynamic pricing

Answer 17

based on market conditions (ex. seafood)

Question 18

fixed costs

Answer 18

not dependent on the quantity of goods or services produced (ex. building rent, salaries)

Question 19

variable costs

Answer 19

vary with the quantity of goods or services produced (ex. hourly labor, materials costs)

Question 20

economies of scale

Answer 20

as more products are produced, buying in bulk leads to lower average costs (higher output leads to lower unit cost) (ex. Walmart buying in bulk)

Question 21

economies of scope

Answer 21

average cost of production decreases when there is a greater variety of goods produced (product unit cost lowers are you have more product lines–diversification) (Proctor & Gamble with salaried employees for hygiene product lines)

Question 22

unbundled business model

Answer 22

divide business into separate entities to focus on one (customer relationship, product innovation, infrastructure business) (ex. banking and tel-com)

Question 23

the long tail business model

Answer 23

offers a large number of niche products (ex. netflix, lulu.com)

Question 24

multi-sided platforms

Answer 24

bring together two distinct but interdependent groups and facilitate interaction between them (ex. metro–free newspaper for readers and ad companies)

Question 25

free business model

Answer 25

at least one customer segment benefits from a free offer
multisided w/ advertising (Metro)
freemium (some convert to paid) (skype)
bait & hook (phone for free, pay for service)

Question 26

open business model

Answer 26

companies use this to create and capture value by collaborating with outside partners
outside in (using outside ideas or tech) (P & G Pringles Prints)
inside out (providing partners with idle assets in your company) (GSK patent pools)

Question 27

ways to deliver value to customer

Answer 27

brand/status (BMW)
price (southwest)
cost reduction (salesforce CRM)
risk reduction (service guarantee or warranty)
accessibility (NetJets)
convenience (iTunes)
newness (cell phones)
performance (PC computers)
customization (lego kits)
design (fashion industry)

Question 28

types of channels

Answer 28

direct: sell to your customer directly
indirect: form strategic partnerships with larger companies to leverage their channel and credibility
automated: amazon

Question 29

customer relationship business

Answer 29

customer centered, few big players dominate

Question 30

product innovation business

Answer 30

employee centered, many small businesses

Question 31

infrastructure business

Answer 31

cost focused, few big players dominate

Question 32

why long tail

Answer 32

democratization of tools of production, distribution, and decreasing costs to supply