QSTP Interns Workshop - Business Models

Business Models
1
What Makes a
Successful Startup ?
2
WHAT ARE THE KEY ELEMENTS OF A SUCCESSFUL STARTUP
1. Product / Service
• Solves a customer need
• Competitive advantage (short term, and hopefully long term)
2. Team
• Ability to execute, adjust and pivot as needed
3. Business Model
4. Traction (evidence of customer interest)
5. Investment (some financial stability). As a consequence of the above
3
What is a
Business Model
4
WHAT IS A BUSINESS MODEL
Delivering What the Customer

Wants in the Way they Want It
5
IMPORTANCE OF A BUSINESS MODEL
PART OF THE VALUE YOU DELIVER
COMPETITIVE ADVANTAGE
OPERATIONAL EFFICIENCY
6
EXAMPLES
Similar but also different:

3. Pricing / Revenue Model
1. Product / Service
4. Degree of Vertical Integration,
2. Customer
Activities, Partners, etc. 7
Build Your Business Model
9
BUSINESS MODEL CANVAS - OVERVIEW
https://www.youtube.com/watch?v=QoAOzMTLP5s
http://www.businessmodelgeneration.com/downloads/business_model_canvas_poster.pdf
10
BUSINESS MODEL CANVAS – OVERVIEW
The Right Side (Customer Facing)
• Customers: Who is your customer / target market

• Value Proposition: What value do you offer them
• Channels: How does your customer purchase your product
• Customer Relationships: How will you deliver value and maintain the customer relationship
• Revenue: How will you make money
The Left Side (Internal to Your Startup)
• Key Activities: What will your startup focus on

• Key Resources: What resources do you need for your activities
• Key Partners: What partners do you need for your startup
• Costs: What will all this cost
11
https://www.youtube.com/watch?v=RzkdJiax6Tw
12
http://www.businessmodelgeneration.com/downloads/business_model_canvas_poster.pdf
13
DESCRIBE YOUR VALUE PROPOSITION
Ways to describe your Value Proposition
• Outperform current solutions that delight your customer?

• More features, better performance, quality, design …
• Produce positive outcomes matching (or go beyond) your customers success and failure criteria and expectations?
• Better performance, lower cost, better quality, more of something, less of something, remove a frustration …
• Make your customer’s job or life easier?

• Easy to learn and use, accessibility, more services, lower cost of ownership …
• Help make adoption easier TIP: QUANTIFY your value

• Lower cost, less investments, lower risk, better quality, performance, design
• Do you create savings that make the customer happy?

• Time, money, effort
• Create positive social impact that your customer desires?

• Makes them look good, produces and increase in power, status…
https://i0.wp.com/conorneill.com/wp-content/uploads/2017/03/value_proposition_designer_draft.jpg?ssl=1
15
DESCRIBE YOUR VALUE PROPOSITION – IN 1 SENTENCE
http://www.trager.nl/sites/default/files/ad-lib-value-proposition-template_0.pdf
16
What Makes a Good
Business Model
18
DIFFERENT BUSINESS MODEL and PRICING
https://www.youtube.com/watch?v=oWZbWzAyHAE
19
WHAT MAKES A GOOD BUSINESS MODEL
http://strategyzr.s3.amazonaws.com/assets/vpd/resources/seven-questions-to-assess-your-business-model-design.pdf
20
WHAT MAKES A GOOD BUSINESS MODEL
8. Focus on Maximizing Value to your Customers

• Entire canvas must focus on maximizing value. Enhance Value via Channels, Key Resources, Activities and Partnerships
9. Price your product based on the value it provides, not based on what it costs you.
• Ex. Although an iPhone costs $150 to make, Apple sells it for $1,100 based on the value that phone provides and what they feel the customer is
willing to pay.
10. Keep start up costs low (capital and up-front costs)

• Make it Easy for Customers to sign up and leverage customer…they can be your best marketing team (Dropbox)
• Use partners when appropriate (non-core activities)
12. Don’t Assume … Test your Business Model, Pivot, Re-test

• Create a draft business model
• Test it by talking to customers, partners and channels.
• Enhance and re-test
12. A great product is necessary, but it’s not enough. Your business model must be part of your competitive advantage
• Ex. Sun Edison (panels for free, investors financed upfront costs by purchasing PPAs) vs. traditional solar panel resellers.
21
My Example
22
23
24
CREATE YOUR
BUSINESS MODEL
(Electric Flying Vehicle)
25
SOME GUIDELINES
1. B2C
1. TAXIS
2. TOURISTS
3. Etc.
2. B2B
• CORPORATE
• FREIGHT
• SHUTTLE SERVICE
3. SCENARIO AND INVESTMENT

• YOU HAVE FINISHED YOUR PROTOTYPE, BUT YOU NEED 1 YEAR TO LAUNCH THE FINISHED PRODUCT
• YOU HAVE TIME NOW TO THINK ABOUT YOUR BUSINESS MODEL, WHILE YOU ARE IMPROVING THE PRODUCT
• I HAVE INVESTED $ 5 MILLION USD NOW…..SHOW ME WHERE MY MONEY WILL BE SPENT IN THE NEXT YEAR
• I AM WILLING TO INVEST $ 20 MILLION MORE
• I AM LOOKING FOR GROWTH, NOT SHORT-TERM PROFIT
• TRY TO SECURE A CUSTOMER (OR TRIAL / PILOT) WITHIN THE NEXT YEAR OR TWO
4. PRESENT YOUR BUSINESS MODEL

• 5 MINUTES TO PRESENT
26
DRAFT YOUR BUSINESS MODEL
27
10 Types of Business Models
https://businessmodelanalyst.com/business-model-examples/
https://businessmodelanalyst.com/types-of-business-models/
https://businessmodelanalyst.com/business-model-canvas/
28
1. Multisided
29
Multisided Plataform - Business Model Canvas
Platform Development and

Maintenance
Value Propostion #1 Network Effect

(e.g. More Demand)
Marketing to Attract Both
Customer Segment #1
Supply & Demand
(e.g. Supply)
(Chicken-Egg Problem)
Third-Party Applications
Connection + Trust
between sides
Customer Segment #2
(e.g. Demand)
Platform + Brand
Digital Channels to
Value Propostion #2
Platforms
Database of Registered (e.g. More Supply)
Suppliers and Customers
and past transactions
Revenue Flow #1 Revenue Flow #2

(e.g. Fixed and/or (e.g. Free or
Maintenance
Transaction Fee) Transaction Fee)
THE BUSINESS businessmodelanalyst.com

MODEL ANALYST
The model implies a company provides service to both customer segments. Examples: LinkedIn, PayPal, Facebook, eBay
- Business Model Canvas

Self-Service +
Maintenance
Create your professional Customers Service
network online and build Professionals
your own brand
Direct and Indirect
Microsoft Marketing
Network Effects
Find the ideal candidates

Recruiters
for your organization
Developers
Linkedin Platform linkedin.com
Place ads for a highly

Advertisers
Users, Recruiters and qualified user base
Linkedin App
Advertisers database
Platform Development and Premium Subsription Talent Solutions Marketing Solutions

Sales and Marketing Team
Maintenance (monthly / annual fee) Pay-per-click Job Posting (CPC, CPM or CPS)

MODEL ANALYST
Linkedin Business Model is a multisided platform that connects professional users that want to create their own professional network with recruiters and
advertisers. https://businessmodelanalyst.com/linkedin-business-model/
2. Freemium
32
Freemium - Business Model Canvas

Lower S LA
Maintenance
Free Offer Free Users

Convert Free Users into (large base)
Higher S LA
Premium Users
Digital Channels
Paying Users
Premium Offer (small base)
Digital Platform
It’s FREE !!!!
Platform cost for goal:

Fixed Cost Platform cost for Free Users Free $0 Paid $$$
Paid Users 5% conversion

MODEL ANALYST
The model includes both free and paid services. Typically, a business lures new customers with a free subscription. However, it’s free only
for a limited period or with a basic set of features. If customers want to unlock full capabilities, they must pay. The monetization option is
ideal for encouraging users to try a product. Usually, freemium is implemented for SaaS or mobile app companies.
Examples: Skype and LinkedIn, Mailchimp, Spotify

Self-Service +
Maintenance
Create your professional Customers Service
network online and build Professionals
your own brand
Direct and Indirect
Microsoft Marketing
Network Effects
Find the ideal candidates

Recruiters
for your organization
Developers
Linkedin Platform linkedin.com
Place ads for a highly

Advertisers
Users, Recruiters and qualified user base
Linkedin App
Advertisers database
Platform Development and Premium Subsription Talent Solutions Marketing Solutions

Sales and Marketing Team
Maintenance (monthly / annual fee) Pay-per-click Job Posting (CPC, CPM or CPS)

MODEL ANALYST
3. Subscription
35
Subscription - Business Model Canvas
Supply Chain Mgnmt

or
Self-Service
Digital Platform
Maintenance
Product or Service of Customers seeking

repetitive use convenience
Digital Platform or Digital or Physical

Phisycal Infrastructure Channels
Digital Platform Recurring Fee

Direct-Costs and Logistics
Maintenance (usually monthly or yearly)

MODEL ANALYST
A business with a subscription business model provides consumers with certain services for a fixed monthly, quarterly, or annual fee.
Usually, a company segments the market and makes several offers with different features and prices. These are referred to as tiered
offerings. A vivid example is Netflix, with three monthly plans: Basic for $8.99, Standard for $12.99, and Premium for $15.99.
Production & Licensing
Self-Service +
Consumer Eletronics
A.I. Recommendations
Development of Netflix
Platform
Watch on-demand
Cable Companies & entertainment where and Movies & Series Lovers
Broadcasters when you want it
Netflix Platform and Movie

Any Device
Portfolio
Producers
Netflix Brand Netflix App
Production & Licensing Technology Development Subscription

MODEL ANALYST
Netflix Business Model is a mix of On-Demand Subscription with All You Can Eat business models types.
4. Peer to Peer
38
Under a peer-to-peer (p2p) business model, a business serves as an intermediary between two parties. The intermediary takes a
commission for driving value for both the demand and supply sides. For example, look at Airbnb: the service charges a commission
when a host and hostee make a deal and carry out a transaction.
Self-Service +
Platform Development Personalized
Recommendations
Make money renting idle

rooms/properties or
Hosts
Professional Customer Support experiences in a easy and Customer Support
Photographers secure way
Stay in unique places and

live new experiences in a Guests
Insurance Companies Airbnb Platform
secure and convenient way Airbnb Website
Properties Listed
Airbnb App
Marketing and Customer Host Fees Travelers Fees

Technology Platform Employees
Support (ranges from 3 to 5%) (Ranges from 0 to 20%)

MODEL ANALYST
Airbnb Business Model is a Multisided platform that connects travelers with hosts from all corners of the planet. By
commoditizing trust between property owners and short-term renters, Airbnb has become one of the most recognized
companies in the hospitality industry. https://businessmodelanalyst.com/airbnb-business-model/
5. Razor and Blade
41
Razor and Blade - Business Model Canvas
R&D
Self-service
Suppliers
Marketing
Convenience, Trust and

Mass Market
Quality
Manufacturing
Brand Own Channels
Patents Third-party Channels
Low-Margin Single Sale High-Margin Multiple Sales

Marketing Supply Chain
(platform / bait / razor) (cartridge / hook / blades)

MODEL ANALYST
This model can also be referred to as a printer and cartridge business model. One product is marketed high, while another one – low. The
thing is, an expensive product can’t be utilized without a cheap one. Hence, a business drives constant profit from associated inexpensive
goods. For example, consumers will always keep buying ink if they have printers. Examples include: Gillette, HP printers and cartridges,
Sony Playstation, Microsoft Xbox, and Nespresso
6. Direct Sales
43
A direct sales business model takes place when a company adds a personal touch to a sales process. In other words, a sales representative is
selling a product directly to an end-customer. The advantage is that you have direct access to the customer, no middleman.
7. Aggregator
45
Aggregator - Business Model Canvas

Maintenance
Customer Service
Compare and Find the

Sales / Partnerships Consumers
Best Offers
Lead-Generation Goods/Services Provider

Digital Channels
Platform
(Web and Mobile)
Database of Registered
Suppliers and Customers, Sales Team
Reviews and Transactions

Sales Team Free Comission
Maintenance

MODEL ANALYST
An aggregator business model is a network model. A business is an aggregator if it provides information about a specific service and sells
it. Usually, the service is branded. Typically, a company specializes in a particular niche. Examples: Amazon (book aggregator), Uber (taxi
aggregator), Airbnb (accommodation aggregator)
Self-Service +
Platform Development Personalized
Recommendations
Make money renting idle

rooms/properties or
Hosts
Professional Customer Support experiences in a easy and Customer Support
Photographers secure way
Stay in unique places and

live new experiences in a Guests
Insurance Companies Airbnb Platform
secure and convenient way Airbnb Website
Properties Listed
Airbnb App
Marketing and Customer Host Fees Travelers Fees

Technology Platform Employees
Support (ranges from 3 to 5%) (Ranges from 0 to 20%)

MODEL ANALYST
Logistics Automated & Self-Service

low price + fast delivery +
wide selection of products Buyers
= Convenience
Platform Development and Support
Logistic Companies Maintenance
Marketplace with access

Sellers
to millions of buyers
Third-Party Applications Technology Infrastructure Amazon.com & Mobile App
Amazon Brand Affiliates

Platform as a Service Developers / Business
Warehouses AWS.com & API
One-Time Sales, Pay-per-use & Support

Warehouses People Digital Infrastructure Comission on Sales
Subscriptions & Prime Subscription

MODEL ANALYST
8. Wholesale
49
A traditional business model in the B2B segment, wholesale, is about the supply chain. Each party involved in the supply chain is a
wholesale business. So, we can say those who sell raw materials to manufacturers or suppliers and distributors who then sell goods to
retailers fall for a wholesale business model.
9. SaaS
51
SaaS - Business Model Canvas
Digital Platform Self-Service +

Maintenance Dedicated Support
Sales and Support Events and Conferences
Access to Software in
IT Infrastructure Partners Service format, including
Customers
(IaaS and PaaS) hosting, maitenance,
support and updates
Internet (website, API,

Digital Platform
mobile App)
Team Sales Team
Recurring Fee
Digital Platform (based on packages of
Infrastructure Partners Team
Maintenance features + number of
licenses)

MODEL ANALYST
Software as a service (SaaS) is a delivery business model implemented by tech companies that lease the software to customers via central,
cloud-based systems. Typically, clients pay a subscription fee to get the license for centrally hosted software. Example, Salesforce
https://businessmodelanalyst.com/saas-business-model/
10. Long Tail
53
The Long Tail Business Model works by selling a wide variety of niche products, which individually sell very little, but which in total generate
high sales volume. eBay is a famous example of long tail business because the platform has sellers marketing small quantities of specific
items to buyers looking for niche products.
More Examples
55
Feed, Reviews, Comments

Platform Development
Discover & Watch Videos and Community
Viewers
on Demand for Free
Optimitizing Ads and

Youtube Studio
Reviewing Content
Display your content and

Google Adsense Creators
make money
Algorithm and Data Website + Mobile App +

Smart TVs
Targeted Audience Advertisers
Platform Favorite Channels
Freemium
Maintenance and (Free + Ads
Team Data Centers Paid Ads
Development or Youtube Premium &
Channel Memberships)

MODEL ANALYST
YouTube has become the leading online video platform, with over 1.5 billion active users and 300 hours of content uploaded every minute
https://businessmodelanalyst.com/business-model-canvas-examples/
Software Development Self-service and

automation
Tech Providers Marketing

Customer Support
Democratize access to the

Millenials
financial market
FINRA, SIPC
Trading Platform Mobile App
User Base Website
Interests on customers’
IT Marketing Staff cash balances and margin Premium subscription Payment for order flow
lending

MODEL ANALYST
Robinhood business model operates an online brokerage that offers commission-free trading by allowing users to buy and sell assets such as stocks
https://businessmodelanalyst.com/robinhood-business-model/
Real State Development

WeWork Community
Real State Companies Property Management Individuals

Customer Support
Flexible and Collaborative

Work Spaces With
Infrastructure and
Services
Third-party suppliers and

Wework Offices
service providers
Offices and Locations (great localization and Enterprises
interior design)
Active Members Website and Sales Team
Rentals, Leasing, Membreships

IT Infrastructure Salaries Services
Acquisitions (higher sqft rent)

MODEL ANALYST
WeWork builds physical and virtual offices for entrepreneurs and companies, from different sectors and domains, from services to start-ups. Currently,
WeWork operates in more than 700 locations in 150 cities of 38 countries all over the world https://businessmodelanalyst.com/wework-business-model/

Support for SMEs
Maintenance
Shopify Apps Developers Subscription-based e- Shopify Plus Support SMEs

Marketing and Sales
Commerce Platform (small-medium business)
Shopify Plus Larger Enterprises

Facebook
Shopify Platform
shopify.com
Shopify Ecosystem Shopify App

User Acquisition Human Resources Subscription Merchant Services Fees
Maintenance

MODEL ANALYST
Shopify is an e-commerce platform that allows merchants to create an online store and sell their products for a monthly subscription fee. Shopify business
model is also known as Software as a Service. https://businessmodelanalyst.com/shopify-business-model/
Self-Service
Platform Development &
(Review, Rating and
Customer Support Order food delivery from Hungry People who don’t
Feedback System)
your favorite nearby want or can’t cook
restaurants in a few clicks (customers)
Supply and Demand

Customer Support
Payment Processors Marketing
Increase order number and Businesses that prepare

customer base by offering food but don't have delivery
delivery without investing in guys or online ordering
your own system (restaurants)
Map API Providers Brand Uber Eats App
Owners of cars and bikes

Additional Source of
wanting to make some extra
Technology Platform Income with flexible hours
money
+ customer tips
(delivery guys)
Uber Eats Website
Customer Base + Network
of Restaurants and Drivers
Comission on Orders and

Technology Platform Marketing Employees Branding Promotions Surge Pricing
Delivery Fees

MODEL ANALYST
Uber Eats is the food delivery service owned by Uber rideshare giant. According to Uber’s site, Uber Eats is their “food delivery platform that makes getting
great food from your favorite local restaurants as easy as requesting a ride”. Just like its mother’s company, Uber Eats Business Model is a multisided
platform. https://businessmodelanalyst.com/uber-eats-business-model/
Platform Development and Free Services

Maintenance (web search, gmail, maps, Internet Users
Self-Service
Ad Agencies translation, etc.)
Costumer Support for

R&D
Paying Customers
Google Adwords Advertisers
Content Sites
(display network)
OS and Platforms
Google Algorithms and Developers
(Android and Chrome) Google.com
Data Centers
OEMs
Brand Paid Services Sales Force

(Gsuite, Maps API, Cloud Enterprises
Hosting)
Percentage of App Sales Monthly/annual fees or

Datacenters Marketing and Sales R&D Free Cost-per-Click
and Subscriptions per-usage fees

MODEL ANALYST
Google Business Model is a Multisided Platform. What started as a search company is nowadays a tech giant that has multiple offers. Can you imagine
business, studies, and entertainment without Google today? https://businessmodelanalyst.com/google-business-model/

Maintenance Self-Service
Secure Cross-Platform
Cryptography Free Messaging Network Effect Smartphone Users
Facebook
(+ Phone/Video Calls)
Customer Service Channel

OS Integrators with 1.5 Billion Users Businesses
Digital Platform Worldwide Mobile App / App Stores
User Base Browser / Desktop App
Platform Development and Free

People Business API Usage Fees
Maintenance (No Ads!)

MODEL ANALYST
The WhatsApp business model can be considered a multisided platform that connects users that wants to message each other for free securely,
independently of its cellphone operating system. WhatsApp has recently added businesses as its customers. https://businessmodelanalyst.com/whatsapp-
business-model/
THANK YOU
63

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Business Models

Delivering What the Customer

PART OF THE VALUE YOU DELIVER

Similar but also different:

The Right Side (Customer Facing)

• Customers: Who is your customer / target market

The Left Side (Internal to Your Startup)

• Key Activities: What will your startup focus on

• Outperform current solutions that delight your customer?

• Make your customer’s job or life easier?

• Help make adoption easier TIP: QUANTIFY your value

• Do you create savings that make the customer happy?

• Create positive social impact that your customer desires?

8. Focus on Maximizing Value to your Customers

10. Keep start up costs low (capital and up-front costs)

12. Don’t Assume … Test your Business Model, Pivot, Re-test

3. SCENARIO AND INVESTMENT

4. PRESENT YOUR BUSINESS MODEL

Platform Development and

Value Propostion #1 Network Effect

Revenue Flow #1 Revenue Flow #2

THE BUSINESS businessmodelanalyst.com

Platform Development and

Find the ideal candidates

Place ads for a highly

Platform Development and Premium Subsription Talent Solutions Marketing Solutions

THE BUSINESS businessmodelanalyst.com

Platform Development and

Free Offer Free Users

It’s FREE !!!!

Platform cost for goal:

THE BUSINESS businessmodelanalyst.com

Platform Development and

Find the ideal candidates

Place ads for a highly

Platform Development and Premium Subsription Talent Solutions Marketing Solutions

THE BUSINESS businessmodelanalyst.com

Supply Chain Mgnmt

Product or Service of Customers seeking

Digital Platform or Digital or Physical

Digital Platform Recurring Fee

THE BUSINESS businessmodelanalyst.com

Production & Licensing

Netflix Platform and Movie

Production & Licensing Technology Development Subscription

THE BUSINESS businessmodelanalyst.com

Make money renting idle

Stay in unique places and

Marketing and Customer Host Fees Travelers Fees

THE BUSINESS businessmodelanalyst.com

Convenience, Trust and

Patents Third-party Channels

Low-Margin Single Sale High-Margin Multiple Sales

THE BUSINESS businessmodelanalyst.com

Platform Development and

Compare and Find the

Lead-Generation Goods/Services Provider

Platform Development and

THE BUSINESS businessmodelanalyst.com

Make money renting idle