BUSINESS MODEL
How to define my product / service
PROPOSED BUSINESS MODEL
A successful business model exists if a circuit of relationships and value exchange that benefits everyone taking part in it is established.
A product or service in itself is not a business, but only a part of it. Without a comprehensive vision of the product or service, from when it is produced until it reaches the customer, it is very difficult for a business proposal to work.
Your business model will make or break your start-up. The better your model, the more likely you are to succeed. It defines the way you will generate revenue and make a profit, providing the foundations for success and longevity.
Your business idea will be based on providing a solution to a problem, an answer to a need.
TASK 1: The following Business Model Canvas is a management and planning tool used to describe the different elements that make up a business proposition. It presents very briefly what the business model concept involves. Read it and comment as a class.
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All the groups can first comment on their teams the two Business Model Examples and after, as a class, can comment all together:
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Nintendo Wii: relates to a product
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Kiala: refers to a service.
Both cases have been chosen as examples of how innovation in one of the elements of the traditional business model can result in a new successful idea. Both cases also exemplify how such modification in one of the elements must also generally be accompanied by changes in the other elements of the model.
TASK 2: Each team will use the “Business model puzzle" to configure their own business model. It is a cut-out puzzle made up of four pieces (elements of the business model) to emphasise the interrelationship between the four components. It will generate some doubts for your team to solve. A circular format is used so that no one element is more important than any other: a business model may be designed principally in accordance with any of its four elements.
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Numerous dynamics may be implemented to carry out this activity:
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It is possible, for example, to make a list of different possible options on each of the pieces and then put them together and analyse the viability of all the combinations.
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It is also possible to focus at the start on a particular option on one of the components (for example, the type of customer or channel used) and then configure how the other elements should be defined for a combined proposal that is both innovative and coherent.
Whatever the case, the team as a whole can work on a single element at the same time or split up to work on different elements and later pool their work, etc.
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For inspiration, in the template Business model you have different options for some of the elements of the business model. It’s important to write down the different options on this sheet. You have to keep them as work material for the next session.
TASK 3: In the previous dynamic, various options were analysed in relation to the different elements that make up the business model, ruling out some and choosing others. Now it is time to obtain information from the people that are really going to use the proposed product or service: the customers.
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You will have to do a teamwork: Your team must plan a number of interviews with potential customers and other relevant individuals. You will have to design some very specific questions. You will also have to choose beforehand the kind of potential customer or users of your product or service.
The information obtained in these interviews should serve to confirm or refine the optimum configuration of the proposed business model.