Sunday, April 1, 2012

Business Model Generation

I've talked about several of these topics in the past, but if you're trying to figure out your business model (i.e. how to montetize your business, I'd highly recommend you get the book "Business Model Generation."  

It talks about my favorite monetization model - the multi-sided platform.  This is effectively what Google has.  One person pays for your services (i.e. in the case of the search engine, it's the advertisers) and another person gets the benefits for free (i.e. the people doing the searches).  

The book breaks up your business into 9 sections:

1. Customer Segments
2. Value Propositions
3. Channels
4. Customer Relationships
5. Revenue Streams
6. Key Resources
7. Key Activities
8. Key Partnerships
9. Cost Structure

The book provides a number of example businesses around different business model types.  This structure is quite helpful when it comes to pulling your business model together.

Here's an example for a business that I was thinking about building.  I know a lot about tons of geospatial data that is available...much of it being free (from the government).  So I laid this business out into the Business Model Generation format:

This process is a key step for me when I'm evaluating a business opportunity.

It's important to think about things like: How are you different than the competition?  Is your offering disruptive to the industry?  What is your monetization plan?  Do you have a multi-sided platform business?  What customer segments are you going to service?  In what order?  What is your value proposition?  Is it different than others?  What channels can you take your product/service to the market?  In what order?  What customer relationships do you need to develop?  How will you develop them?  What are your revenue streams?  Do you have many small revenue streams?  What key resources do you need for your business?  What are the key activities required and by who?  What partnerships should you establish and how?  What's your cost structure - i.e. can you make money?

Post a Comment