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Course Name: Entrepreneurship Essentials

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Faculty Name: Manoj Kumar Mondal
Rajendra Mishra School of Engineering Entrepreneurship
IIT KHARAGPUR
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Module 04:
Lecture 16: Business Model Canvas
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⮚ Business model definition
⮚ Business model canvas template

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⮚ Example
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 Business Model: Definition
• A business model is an opportunity for a business with all its

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features including risks, advantages, complexities, customer
segment, market structure & potential, competition
landscape, socio-political challenges and opportunities,
commercial attractiveness, environmental challenges,

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techno-economic feasibility, profitable sustainability, growth
potential, legal tenability and the execution plan.
• A business model describes the rationale of how an
organization creates, delivers, and captures value –
Alexander Osterwalder
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 Business Plan
Business plan is a document containing the detailed plan of

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execution of a Business Model, its unique strengths,
weaknesses, opportunities, threats, the complementary skills
of the team, operation plan, marketing plan and the financial
projections, demonstrating how the company acquire, retain

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and grow customer base, create value for customers and other
stakeholders, derives competitive advantages, sustain and
grow in the long run.
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 Business Model Innovation
• Starting from identifying the pain point, Business Model
innovation includes developing solutions, sustaining profitable

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growth and creating value for companies, customers, and society.
• It is about innovating new products, process, services, and
businesses replacing outdated models.
• Apple created an innovative new business model with its iPod
digital media player and iTunes online music store.

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• Skype brought us cheap global calling and free Skype-to-Skype
calls with an innovative business model built on peer-to-peer
technology. So has done WhatsApp.
• Grameen Bank, in Bangladesh, is promoting social
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entrepreneurship and alleviating poverty through innovative
micro-lending to the poor.
 Business Model Template

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• Thankfully for us, Alexander Osterwalder has developed a
template for business model.
• It is known as Business Model Canvas.

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 Business Model Canvas

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• Alexander Osterwalder has presented nine building blocks for
describing business model.
• These blocks are arranged in a canvas, called Business Model
Canvas.

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• The heart of the canvas is the Value Proposition and the
Customer Segment blocks.
• Any business is related to customers and customers are
there for the value provided to them through the product or
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service and they would provide profit to the company .
Business Model Canvas
Book: Business Model Generation
by Alexander Osterwalder, 2010

Efficiency

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PT
Value

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 Customer
08 07 01
Relationship
02
Key Key Value 04
Proposition Customer
Partners Activities

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Segment

03
Key
06
Resources Channel

09 Cost
PT
Structure
05 Revenue Model
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N
PT
EL
 Customer
08 07 01 Value Relationship 02
Proposition
Customer
Key Key 04 Segment
Partners Activities

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03
Key
06
Resources Channel

09 Cost
PT
Structure
05 Revenue Model
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 Value Proposition

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• The Value Propositions Building Block describes the favorable
features of products and services that would be perceived by
the customers in the targeted segment as superior value for
money.

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• The Value Proposition provides reasons to customers why
they would buy product of one company over another.
• Customers would consider the bundle of features and the
price to be paid vis-à-vis with those of competing products.
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 Customer
08 07 01 Value Relationship 02
Proposition
04 Customer
Key Key Segment
Partners Activities

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03
Key
06
Resources Channel

09 Cost
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Structure
05 Revenue Model
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 Market / Customer Segment
• Market segmentation is the act of dividing a broad consumer

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or business population into sub-groups of consumers based
on some shared characteristics relevant for marketing
particular product or service.
• Dividing the market for common characteristics such as

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shared needs, common interests, similar lifestyles or even
similar demographic profiles.
• Ideally the market segment should hold promise of profitable
relationship with growth potential.
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 More About Segment
Distinct groups with common needs, common behaviors, common

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•
taste or other attributes.
Customer groups represent separate segments if:
• Their needs, behavior, and conveniences are unique and they are

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ready to pay the extra price (or revenue) justifying additional cost
to meet them.
• The more sharper the focus to meet specific needs of a group of
customers, smaller the segment becomes. More ‘niche’ is the
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marketing – catering to specialized needs.
 Segmentation

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The features of the products or services include newness,
performance, customization, ‘getting the job done’, design, price,
brand, cost reduction, risk reduction, accessibility, convenience,
usability and such (Osterwalder 2010).

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N
 Customer
08 07 01
Relationship
02
Key Key Value 04
Proposition Customer
Partners Activities

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Segment

03
Key
06
Resources

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Channel

Cost 05 Revenue Model

09 Structure
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 Channels
• The Channels Building Block describes how a company

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communicates with and reaches its Customer Segments to deliver a
Value Proposition.
It includes:
• Creating awareness among customers of the value proposition.
• Helping customers evaluate a company’s Value Proposition.

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• Facilitating easy purchase of the product or service by the
customers.
• Delivering the product or service conveniently to customers.
• Providing after-sale customer support as part of value proposition.
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• Allowing to return in case of mismatch. Exchange of old with new.
 Customer
08 07 01
Relationship
02
Key Key Value 04
Proposition Customer
Partners Activities

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Segment

03
Key
06
Resources

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Channel

Cost 05 Revenue Model

09 Structure
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 Customer Relationships
• The Customer Relationships Building Block describes how the

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company would build and maintain relationship with targeted
customers on a sustainable long-term basis.
Motivations:
• Customer acquisition

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• Customer retention

• Acquiring more customers for sustainable & profitable growth.

• Making profit from life-time-value of customers.

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 Customer
08 07 01
Relationship
02
Key Key Value 04
Proposition Customer
Partners Activities

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Segment

06 03
Key
Resources

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Channel

Revenue Model
Cost
09 Structure
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05
 Revenue Streams/Model
• The Revenue Streams Building Block represents the cash a

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company generates from each Customer Segment
• If customers comprise the heart of a business model,
Revenue Streams are its arteries.
A company must ask itself, For what value is each Customer

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•
Segment truly willing to pay?
• Successfully answering that question allows the firm to
generate one or more Revenue Streams from each Customer
Segment.
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 Customer
08 07 01
Relationship
02
Key Key Value 04
Proposition Customer
Partners Activities

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Segment

06 03
Key
Resources

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Channel

Revenue Model
Cost
09 Structure
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05
 Key Resources
• The Key Resources Building Block describes the most important

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resources required to make a business model work
• These resources allow an enterprise to create the Value Proposition.
• Depending on type of business, different Key Resources are needed.
An E-car manufacturer requires batteries, whereas a battery

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•
manufacturer requires materials such as lithium, cobalt, nickel,
manganese, graphite, copper and aluminum.
• Key resources can be physical, financial, intellectual, or manpower.
Key resources can be owned or acquired from key partners.
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 Customer
08 07 01
Relationship
02
Key Key Value 04
Proposition Customer
Partners Activities

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Segment

06 03
Key
Resources

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Channel

Revenue Model
Cost
09 Structure
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05
 Key Activities
• The Key Activities Building Block describes the important

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processes or actions through which it delivers the value.
• For a car maker, Key Activities include manufacturing and supply
chain management. For a software consultancy firm, Key Activities
include problem solving.

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• For an e-commerce company, the key activities are maintaining
the virtual market place, maintaining logistics, connecting with
vendors, maintaining data, payment gateway, handling customer
complaints, managing reverse logistics (return of goods), and
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many more.
 Customer
08 07 01
Relationship
02
Key Key Value 04
Proposition Customer
Partners Activities

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Segment

06 03
Key
Resources

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Channel

Revenue Model
Cost
09 Structure
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05
 Key Partnerships
• The Key Partnerships Building Block describes the network of

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suppliers, providers of other resources, and facilitators.
• Companies create alliances to optimize their business models,
reduce risk, or acquire resources.
• Key Partners include key suppliers of inputs, funding, consulting,

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manpower providers, investors.
• Co-founders are partners, but this block refers mostly to outside
partners who play key role in smooth running of the venture
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 Customer
08 07 01
Relationship
02
Key Key Value 04
Proposition Customer
Partners Activities

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Segment

06 03
Key
Resources

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Channel

Revenue Model
Cost
09 Structure
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05
 Cost Structure
The Cost Structure describes all costs incurred to operate a

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•
business model.
• Cost to be incurred in creating and delivering value, maintaining
Customer Relationships, and generating revenue.

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• Raw-materials, rent, salary & wages, transportation, insurance,
webhosting, internet service, advertisement, depreciation,
interest on loans, royalty, research & Development cost, server
rental cost, administrative overhead cost are part of the costs.
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Book: Business Model Generation
by Alexander Osterwalder

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PT
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 for taxi aggregator

• Individual car • Manage booking • Easy booking Segment by

owners • Optimize vehicle • Easy payment • Security profession
Transport logistics • Feedback • People
• • Direction
• Maintain customer • Loyalty bonus

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operator • Safety commuting daily
Digital wallet registration, travel • Fidelity bonus • Working people
• • Competitive rate
companies record (transparent) • Tourist
• Technology • Schedule tour in Segment by age
provider advance • People above 18
• Advertisement • No waiting and below 70
agencies • Pickup from home
• Driver association • No parking

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• Hardware • Good interior • Phone App
provider • Hardware • Computer
• Software • Call center
• Contract with key • Google advert
partners • Sponsor event
• Key employees

• Hardware cost • Pay per ride

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• Software maintenance cost • Registration fee, hardware rent
• Employee cost • Advertisement on the App
• Network / hosting / database server • Advertisement on taxis
cost • Event contract
 Criticism of Business Model Canvas
It does not have any reference to exogenous forces.

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•

• It focuses mostly on economic value and not environmental and

social value.
• How to create competitive advantages, entry barrier, scaling

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business and such.
• Overly simplistic and narrow in terms of diversity of business
challenges.
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 EL
⮚ Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a handbook for visionaries, game
changers, and challengers. John Wiley & Sons.
⮚ Bocken, N. M., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop

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sustainable business model archetypes. Journal of cleaner production, 65, 42-56.
⮚ Toro-Jarrín, M. A., Ponce-Jaramillo, I. E., & Güemes-Castorena, D. (2016). Methodology for the of
building process integration of Business Model Canvas and Technological Roadmap. Technological
Forecasting and Social Change, 110, 213-225.
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⮚ Icons from [Link]
 EL
• Business model canvas explains how a business creates and delivers values.
• Clear understanding of business model is critical for success of a business.

PT
• Business model canvas is almost like a ready reckoner for conceiving various
aspects of the business.
• However, business model canvas is only a part of the understanding of
challenges and opportunities of a business.
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N
PT
EL
 EL
Course Name: Entrepreneurship Essentials

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Faculty Name: Manoj Kumar Mondal
Rajendra Mishra School of Engineering Entrepreneurship
IIT KHARAGPUR
N
Module 04:
Lecture 17: Value Proposition Canvas

1
 EL
⮚ Defining the value proposition
⮚ Importance of understanding and defining value proposition

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⮚ How to design value proposition
⮚ Template of value proposition
⮚ Understand Product-Market-Fit
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2
 EL
You want to design

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products or services that
customers would buy
paying profitable price.
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3
People at large/
Whole market
Awareness Market segment
Prospect

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Interest 100

Consideration
75

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Intent 50

Evaluation 25

Purchase
Output
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Reference

4
 But!

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• Most technocrats value their product by the years they spent
developing it, how cutting-edge it is, how difficult it is for others to
do the same, how ground-breaking is it, how excited s/he and
friends are.

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• They fail to even ask will some people buy it at a profitable price?
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5
What is value? Or value drivers?

• Functional – features, efficacy, More integrated thinking.

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reliability Wasterwalder makes analogy of
• Emotional the canvas with a Swiss knife
for heart surgery.
• Social

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• Economical of financial reward
• Piece of mind
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6
Definition from Investopedia

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Value proposition refers to a business or marketing
statement that a company uses to summarize why a
consumer should buy a product or use a service.
This statement convinces a potential consumer that one

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particular product or service will add more value or better
solve a problem than other similar offerings will.
Companies use this statement to target customers who will
benefit most from using the company's products, and this
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helps maintain an economic moat.

7
The Value Proposition Canvas
• First step is the target customers
• What problem you are going to solve – the insight

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• There may be multiple problems but focus on one that you can
solve.
• Why others failed to serve adequately?

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• Our promise or benefits : is a function of the insight.
• Proof that we can deliver the benefits.
• Differentiators.
Unique selling proposition.
•
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8
Majority of Products Introduced in the Market FAIL.

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• According to Harvard Business School professor Clayton
Christensen, there are over 30,000 new products introduced every
year, and 95 percent fail.
• According to University of Toronto Professor Inez Blackburn, the

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failure rate of new grocery store products is 70 to 80 percent.
• Moot point is, how to create product that does not fail!
• Look at the following example:
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9
Data Show that:

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• 7 out of 10 products flop (in Silicon Valley)
• All the money, time, resources and talent that go into
making these 7 products are all wasted.

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• Majority, if not all, of the products fail because the
targeted customers do not buy them.
• They do not buy because they do not find them attractive.
• They do not find them attractive because these products are unable to
meet customers' essential needs.
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• 42% Well-Funded startups fail.

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 Wufoo founded by Kevin Hale
• Founded in 2006 and exited in 2011

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• Raised only $1,18,000
• Sold to SurveyMonkey for $35 million in 2011.
• Gave a return of 29,561% to investors.

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• Product: A web app that lets people create forms
• Motivation for the product: “We looked at other form
builders, and we were like, ‘All these people are crappy. And
we don’t want to be in that space.”
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 Value Proposition

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• A VALUE PROPOSITION represents the sum total of
features of your product or service that customer would
perceive as value for their money.
• Your value proposition would provide reasons why

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customers would prefer to buy your product or service
over those of competitors.
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Know Your Customers’ Aspiration

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PT
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13
 Create a Correct Buyer-Persona
• A buyer-persona (a.k.a. “customer avatar”) is a semi-fictional

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person who represents your ideal customer.
• The objective of defining a ‘buyer persona’ is to get crystal
clear on the individuals who you are marketing to.
Until you nail this down, you can’t really be sure that your

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•
offerings and your marketing messaging are going to be
successful. That’s why the buyer persona is often based on
real customers, and/or extensive research.
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 Solution
• Study customers well to define the pain. Profile the customers,

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understand and list what the customers (the majority of them)
would value the most.
• Profiling the customer would help in delineating customer
segment.

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• Get product validated at the idea stage and at every
incremental developmental stage.
• Proceed further only on positive signal from customers.
• Do not stick to the same set of customers for validating to
avoid bias.
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 Solution
Fail fast, fail early, fail forward (Maxwell 2007).

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•

• If at the idea stage itself it reveals that the product has limited
potential to emerge as a sustainable and profitable business,
pivot immediately and start from the beginning.

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• In the process, you save resources, time, and talent and
double the chances of success.
• Gradually, a product or service evolves that perfectly fits the
needs of the target customers without unwanted features.
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Value Proposition
Value proposition is the sum total of the benefits of product
or service to be offered including:

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Quality Ease of use Cost
Efficacy Re-sale value Warranty
Usefulness Power efficiency Aesthetic value
Esteem Serviceability Convenience to buy

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Ease of installation Storability Delivery
Configuration Shelf-life Return policy
Maintainability After-sale service Trouble shooting
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Safety Reliability and such.

17
 EL
Quality Configuration Power Reliability Delivery
efficiency

Usefulness Safety Storability Warranty Trouble

shooting

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Efficacy Maintainability Serviceability Cost Return policy

Esteem Ease of use Shelf-life Aesthetic value Financing

Ease of Re-sale value After-sale Convenience to Unique

installation service buy experience
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 Designing Value Proposition

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• Value proposition is carefully crafted pitch explaining the
advantages of your offering over those of competitors, showing
reasons why customers have reasons to buy your product or
service.
Every employee should understand the value proposition related

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•
to all products and services so that they channel their focus and
efforts to continuously improve them and convey them to
customers.
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 Two Different Approaches

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01
Try to know your value proposition from the users by closely
and deeply empathizing.

02
Building a product that ameliorates an acute pain, which the

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customers are either not aware of or do not think that a
solution is possible.
You have to know for sure that you know what others do not know about their
pain and you do know and have a solution.
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 The First Approach
 Involves detailed profiling of the customers (economic, social,

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cultural, intellectual status), defining their specific pain,
understanding competing products or services, and possible
features of the planned or developed solution help to define
value proposition.

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 Building product with superior value proposition is referred to
as ‘Product-Market-Fit’
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Do Not Take the Value Proposition for Granted

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• Value proposition is at times highly revealing to the founders.
• While creating one, they struggle to explain to themselves how
their offering is superior compared to that of competitors.
• It is always good to put things in writing. You get a holistic

PT
picture of the issue. Else you have some hedgy, incorrect, and
at times, inflated idea about it (Croll and Yoskovitz 2013).
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The Second Approach: Exceptional Product or Service

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As Reid Hoffman of LinkedIn explains, lucrative startups are often
the result of wildly audacious solutions to problems people didn’t
realize they had.

PT
N
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Exceptional Product or Service
• While it would be wonderful to have a perfect product-market fit,
it may not always be realized for many reasons.

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• Importantly, you may not have the vision to see how they would
actually react when the product is in the market.
• In the case of disruptive products/service, customers may not be
aware about the need. But they may actually be enamored to

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receive a solution.
• So you may actually be a contrarian with confidence: you know
that others do not know what you know.
• Reid Hoffman explains how very smart people told his team “You
must be nuts” when they pitched about LinkedIn.
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• When Jack Ma started Alibaba, most people said ‘you must be

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crazy. You know nothing about internet and you want to start
a business using internet!’
• But then, there is no formula to really identify event when you
are right and you know for sure that others are not and you be

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a contrarian.
• Unless you are starting as disruptive or breakthrough as
LinkedIn or Alibaba, you are better of following the beaten
path.
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• When people, whatever smart, are reflecting on your idea, it is

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difficult, if not impossible, for them to have the same vision as
yours.
• Their horizon may be narrow or shortsighted.
• These are flip side of validated leaning process.

PT
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 Example
• The Iridium communications service or Iridium SSC was launched

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on November 1, 1998 at a capital investment of US$6 billion
(Indian ₹ 42,000 crore).
• Motorola was the technology provider.
This was launched at a time when cell phone

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•
service was in its infancy.
• What the founder assumed?
• Communication made possible from anywhere to anywhere.
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People have every reason to lap it up.

Image courtesy: [Link]

27
 Facts
Nine months later, on August 13, 1999, filed for bankruptcy. Why?

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•

• Every single call has to be routed through all satellites. Required

entire constellation of 66 active satellites to make any call.
• The cost of service was prohibitively high for the most users.

PT
• Indoor reception was poor, if at all possible.
• The hand held device was bulky. Customers
• The present owners bought it for did not
US$35 million. want it
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 Why did Iridium fail?
• The company lacked idea of the cost of the service and

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affordability.
• Customers were not ready to pay the price of the product and
service.

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• The products did not meet requirements of customers.
• The technology was ahead of time.
• Ancillary industries were not well developed.
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 Value Proposition Template
• Value proposition may be succinct one-liner or it may be

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elaborate for clear understanding.
• The book by Alex Osterwalder has provided a template for a
one-liner value proposition.
Your business’s value proposition is arguably the most

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•
important element of your overall market messaging.
• A value proposition tells prospects why they should do business
with you rather than your competitors, and makes the benefits
of your products or services crystal clear from the outset.
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Some Value Proposition Statements

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• Uber – The Smartest Way to Get Around
• Apple iPhone – The Experience ‘is’ the Product
• Digit – Save Money Without Thinking About It

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• CrazyEgg – Website Behavior Tracking at an Unbeatable Price
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[Link] Video by
Osterwalder
Gain

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Customer Segment
Customer
Jobs
----------

PT
----------
Pain ----------
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Value Proposition Customer Segment

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Gain creator Gain

Products & Customer

Services Jobs

PT
----------
----------
Pain ----------
Pain relievers
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Value Proposition Design by
Recreated from the book:

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Professio Rating Arrive on
Schedule a time
nal driver system
trip Profession
Loyalty al Fair Call taxi
Visual points price

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Taxi map Find
Osterwalder

Save time Easy

anytime
Anywhere
aggregator payment taxi
with
smartphon Wait for a long time
e App Assign driver Overcharged by taxi Give direction
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Cost system Compete Pay
with other
Instant booking No cash customers Unsafe driver
34
 EL
Must be defined as clearly as possible so that the advantages become
glaringly and doubtlessly visible requiring no explanation (nobody
will approach to get clarification. When in confusion, they would buy
others’ product ).

PT
State how your product better solves the problem than competition.
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35
 Value Proposition Is Usually a One-Sentence statement

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• Our (products or service) help(s) (customer segment) who want to
(jobs to be done) by (your own verb such as reducing avoiding)
and (your own verb such as increasing or enabling). You may also
add a mild criticism of the competing products in general, writing

PT
(unlike: competing value proposition).
• Our (book) help(s) (business professionals) who want to (improve
or build a business) by (gaining latest knowledge on strategies)
and (gaining deep insight) unlike books without focus on the real
N
issues.

36
Our who want to

EL
Product or help(s) Customer Get them
service segment done

PT
by and (unlike)
Existing
Alleviating Creating products or
gains
pains
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services
Images are from the book: Value Proposition Design by Alexander Osterwalder

37
 Value Proposition: Example of 10 carat gold jewelry

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• Our (jewelry) help(s) (affordability) of middle class people (to enjoy
jewelry as glittering as the best gold and increase happiness) by (buying
more with less money) and (save money) unlike the 22 carat gold
jewelry.

PT
• Our innovative technology, developed in advanced laboratory and
crafted by the best professionals has created gold jewellery as glittering
as any other gold jewellery that has enhance affordability and saving
potentiality while increasing the happiness unlike any other jewelry
available in the market.
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 Value Proposition: Example of an Entrepreneurship Book

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• Our (book) help(s) (business professionals) who want to (improve
or build a business) by (avoiding or making stuff nobody wants)
and (creating: clear indicators to measure progress) unlike books
without focus on the real issues.

PT
• Our interactive pedagogy, built by professionals with deep
experience and of proven effective learning, helps those who want
to gain quick expertise in AI through a flexible & convenient
schedule and regular feedback on the performance unlike the
other rigid and monotonous online courses.
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Value Proposition Canvas

EL
• See the video at
[Link] by Alexander
Osterwalder.

PT
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40
Notice that value propositions relate to customers who pay and not value in general.
The following may not be value proposition though they may be positive virtues:

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• Our products helps your neighbors.
• Our products reduces global emission.
• Our services would increase GDP of our nation.
• Our company will enhance employment.
• The poor will be uplifted (as long as the poor are not your customers).

PT
• We empower the have-nots.
• Our services empower women (not your target customers).
• Our services improve educational landscape of the country.
• Our product would reduce pollution in general.
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• We are working towards an equitable society.
• We promote green revolution.

41
Value Proposition Canvas

EL
• See the free slides at
[Link]

PT
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 EL
 Value Proposition Design - How to Create Products and Services Customers Want.
Yves Pigneur, Greg Bernarda, Trish Papadakos, Alex Osterwalder, Alan Smith,

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(2014) Wiley,
 Maxwell, J. C. (2007). The 21 irrefutable laws of leadership: Follow them and people
will follow you. Thomas Nelson.
 Croll, A., and Yoskovitz, B. (2013). Lean analytics: Use data to build a better startup
faster. " O'Reilly Media, Inc.".
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 Good Video Lectures and Reading Materials

EL
• [Link]
• [Link]

PT
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 EL
 People are generally infatuated about their own ideas. They mostly
focus on the inventive steps, intellectual depth and novelty.
 They are frequently blind about the unique requirements of

PT
customers and cost of their products or services.
 They end up investing valuable time and resources only to eventually
realize that the product or service they so assiduously made is not
attractive to customers.
 A clear understanding of the value proposition, on the other hand,
N
helps to choose the right idea early on saving the time and
avoiding cash burn on potentially failing ideas.

45
 N
PT
46

EL
 EL
Course Name: Entrepreneurship Essentials

PT
Faculty Name: Manoj Kumar Mondal
Rajendra Mishra School of Engineering Entrepreneurship
IIT KHARAGPUR
N
Module 04:
Lecture 18 : Illustration of Business Model Canvas
 EL
⮚ Revisit business model canvas
⮚ Pros and cons of business model canvas

PT
⮚ Illustration of Airbnb business model canvas
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 Customer
08 07 01
Relationship
02
Key
Key Value 04
Partner Proposition Customer
Activities

EL
s Segment

03
Key 06
Resources Channel

09 Cost
PT
Structure
05 Revenue Model
N
 Pros
VS.

EL
• Almost whole business model demonstrated in one page or
canvas
• Chances of missing any point is less.

PT
• It saves time for angels and other investor to have a glimpse
or birds eye view on the business model.
• All members can identify possible value addition and
contribute.
N
 Pros
VS.

EL
• Easy to maneuver. Shift sticky notes here and there instead of
a document of many pages.

PT
• It helps focusing on core business areas.
• The canvas encourages experimentation, so you’re not stuck
with first available plan.
N
 Limitations
• Absent: Economic, social and environmental values.

EL
• The risk associated with a business is not well
articulated.
• Does not include broader perspective on business
competition.

PT
• Lacks scenario analysis – alternative possible outcomes.
• Tracking validation on the way moving forward.
N
 The Reality
• The canvas is a static check-list. One must make it dynamic by
constantly striving to update with evolving new strategies and

EL
reinventing the business model.
• It needs to be used in conjunction with other tools such as the
lean startup and customer development methods, so that
you track learnings from experiments and validations of

PT
hypotheses in the canvas.
• Your objective is to make the business strategies superior over
time so that you remain at the front.
• So, you update the canvas regularly. Making it once and not
N
revisiting is a pitfall many run into.
 The Reality

EL
• Use the canvas to know your weaknesses first.
• Gradually build the model to strengthen your value
proposition.
• You can use it to identify the opportunities, then pick up the

PT
most promising ones and Validate step by step.
• Many companies actually became successful by inventing the
business model rather than the product! BMC helps
inventing new business model.
N
The Reality
• The canvas should be used for iterative product development.

EL
We update the canvas as we move forward. The canvas tells
us how competitive we are emerging on our way.
• Revisit the canvas regularly, learn from validations (e.g.
through MVPs), market research, and changing business

PT
environment.
• The canvas should not be treated as a linear snapshot.
• Competitor analysis, regulatory environment, social trends or
liquidity planning and many more things should be done
N
independently / explicitly.
 More About BMC
• Business model canvas should always start with the value

EL
proposition canvas. It hones in on the core of your product or
service. This is where all your design thinking, customer
development and lean startup comes in.
• Be aware of what purpose the business model canvas usually

PT
do not serves but have the potential to serve (e.g. scenario
analysis, validation tracking, storytelling) helping to use this
tool to you best benefit.
N
 Airbnb: How does the business model of Airbnb work?
• Airbnb offers home owners around the world to list their space
(free of charge) for travelers (guest). And to

EL
• people all around the world to book these spaces through mobile
phones or the Internet.
• Offers list of verified hosts, provides a private messaging system,
and an user recommendation feature.

PT
• Guests pay after the reservation has been made using secured
payment system.
• The company captures and promises security and reliability
N
based on customer reviews and ratings.
• Offers property insurance for the hosts.
Airbnb: How does the business model of Airbnb work?
• There are good people and there are not so good people.

EL
• Some homeowners are likely to be so friendly that guest
will feel ‘it’s a home away from home’ and will feel
nostalgic after the tour.
• The hosts monetize surplus space and may create lasting

PT
relationship with some extra-gentle families.
• Travelers get a huge choices (more than 1,500,000
properties in 190 countries).
• Airbnb does not incur cost of maintenance, cleaning,
N
administration, regulators, staffs, and such.
 Airbnb: How does the business model of Airbnb work?

EL
• including apartments, castles or villas bookable for whichever
period desired.
• Further, Airbnb is piloting a new dinner program letting hosts
invite strangers for dinner parties. The idea of sharing

PT
something in-home remains the same.
• In this program, interested hosts share their dining table and
give detailed information regarding the meal, the price, and
the approximate length of the event.
N
• Airbnb retains a share of the receipts.
 New Diversification

EL
• It’s a seamless product extension.
• The new business model is likely to create more value for hosts
without requiring much investment in infrastructure.
• Thus, it will strengthen the foundation.

PT
• Earn more revenue exploiting the same infrastructure, manpower,
payment system, and with a huge ready customer base.
• Self-facilitating
N
 The Socio – Economic Dimension

• The dinner program can have far reaching social

EL
consequences.
• Through the hosts of Airbnb, guests can connect with local
community to have deeper understanding, possibility of
networking, identify like-minded persons, and can

PT
eventually play role for a true global community.
N
 Customer
08 07 01
Relationship
02
Key
Key Value 04
Partner Proposition Customer
Activities

EL
s Segment

03
Key 06
Resources Channel

09 Cost
PT
Structure
05 Revenue Model
N
 1. Value Propositions ⮚ [Link]

• Trustful & reliable platform • Easy to use – mobile phone

EL
• Cheaper option compared or internet.
to hotels. • Exotic locations
• Free membership of • Rental of unique spaces

PT
homeowners – no • Use of unused value
registration or A/C
maintenance fee. • Property insurance coverage
– for homeowners against
• 24/7 support team – for damage
both hosts and guests
N
 2. Customer Segments

EL
• Individual travelers – frequent travelers
• People who want to rent out their place

PT
N
3. Customer Relationships
Trust through service and brand.

EL
•

• Storytelling that resonates with customers.

• Training homeowners to create best customers experiences.
• Support team

PT
• Online & mobile applications.
• After hurricane Sandy, offered free accommodation to
displaced people.
N
4. Channels

EL
• Website
• Mobile app
• Social media

PT
• Blog
• PR
• Word of mouth
N
5. Revenue Streams

EL
• Booking fees charges the guests 6-12% of booking fee.
• Commission home/ apartments owners: 3% of each booked place

PT
N
6. Key Resources
Brand and the associated trust

EL
•

• Community of home providers & travelers

• Data base of accommodations
• Database of registered customers (guests)

PT
• Relationship with governments across the world
N
7. Key Activities
• Maintaining service quality, trust, and good experience

EL
• Creating technological infrastructure & design
• Community management New product such as the New
• Database management Dinner Program

PT
• Customer service
• Marketing to connect more properties and more guests
• Product development
N
• Management of international payment system
8. Key Partners
• Home owners

EL
• Travel community operators
• Bloggers
• Legal institutions

PT
• Investors
• Insurance companies
• Governments across the world
N
 9. Cost Structure
• Platform development & manage and maintain offices in
design various geographies.

EL
• Human resources • Maintaining the brand.
• Hosting of website, database • R&D
server, data management • Commission to frequent

PT
• Marketing to acquire more travelers and hosts
properties and guests • After hurricane Sandy, offered
registered. free accommodation to
• Maintenance of the payment displaced people.
N
system
• All other expenses related to
 EL
⮚ Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a handbook for

PT
visionaries, game changers, and challengers. John Wiley & [Link] 1
⮚ [Link]
⮚ Matthias Orgler at [Link]
business-model-canvas-for-communication-cdea1b72aa55?
N
⮚ [Link] for free icons
 EL
PT
Text : Calibri (Body); 20; Bold

N
N
PT
EL
 EL
Course Name: Entrepreneurship Essentials

PT
Faculty Name: Manoj Kumar Mondal
Rajendra Mishra School of Engineering Entrepreneurship
IIT KHARAGPUR
N
Module 04:
Lecture 19: Features of winning business models
 EL
⮚ Exceptional utilities

PT
⮚ Dynamic capabilities
⮚ Factors driving success by Bill Gross
N
 EL
• In 2019, around 17% of funded startups in India were in the pre-
revenue stage, compared to 12% in 2018
• Around 78% startups, which were turned down by early-stage
backers, either had no product-market fit or were addressing

PT
overly niche market opportunities.
N
 EL
• Early-stage investors are increasingly turning to serial
entrepreneurs, experienced founders, and high-profile employees
for new investments.
• And investors are backing early stage (concept stage) ventures and

PT
even pre-revenue stage startups – report by InnoVen Capital.
• Among the funded startups in 2019, some 82% of founders had
experience of more than 5 years while the majority (89%) of
funded start-ups had co-founders.
N
• most investors look for a clearly defined addressable market,

EL
product-market fit, and room for scalability of a product
before making an investment.
• Around 78% of the startups that were turned down by early-
stage backers either had no product-market fit or were

PT
addressing a narrow niche market opportunity.
• Earlier, the angel investors used to commit around $500k to
$1 million per startup, which has gone up to $20 million in
some seed-stage investments.
N
• Early-stage funding in India more than doubled in 2019 from
2018, whereas, the number of deals has gone up by 22%

EL
coupled with a 70% increase in the average size of the deal.
• The average deal size of early-stage funding increased to ₹7.5
crore in 2019 from ₹4.4 crore in 2018 (in India).

PT
• In 2019, 93 startups received early-stage investments totaling
to ₹693 crore, compared to ₹334 crore in 2018 across 76 early-
stage deals.
• Average valuation in early-stage deals were around ₹17.9 crore
N
($2.6 million).
 EL
"The startup ecosystem in India is now the 3rd largest ecosystem
after the US and China.
The pool of early-stage investors is now very deep with local VCs,
Global VCs, Chinese, Japanese investors all looking to find the

PT
right opportunities"
N
Business Model Innovation

EL
• Features of Winning Business Model

PT
N
 EL
• Creating a business model isn’t simply about completing your
business plan or determining which products to pursue. It’s about
mapping out how you will create ongoing value for your
customers.

PT
• Where will your business idea start, what pain you will solve, how
should it progress, and how will you create value for customers?
Answer these vital questions.
N
 Business Model Innovation

EL
• Since 2006, the IBM Institute for Business Value’s biannual Global
CEO Study has reported that senior executives across industries
regard developing innovative business models as a major priority.
• A 2009 follow-up study reveals that seven out of 10 companies are

PT
engaging in business-model innovation, and an incredible 98% are
modifying their business models to some extent.
N
Winning Features of Business Model Include
• The founders – capabilities.

EL
• The business – what you sell and to whom.
• The context – the time, the technology paradigm, the trend, what
you plan to develop/adapt.

PT
• The market – the customers, the competition, growth potential.
N
 Create Exceptional Utility

EL
• One common trap entrepreneurs fall into while selecting
product : they revel in the bells and whistles of their new
technology.
• The successful ones focus on the product’s utility. They ask

PT
the question: will the product change the lives of customers
and how will it do that?
• One aspect usually ignored is that customers of today are
more focused on new experience in product or service and
N
the entire value chain.
 Customer Experience Cycle

EL
Differentiation Purchase Delivery Use Supplements Maintenance Disposal

How your Convenience to How fast Ease of Does it need How easy to Does it create
product is identify, you deliver installation, other product to maintain or waste?
superior in accessibility, commission, operate? If so, upgrade it? How easy is it to
functionality, secured store, shelf life how costly or dispose of it?

PT
efficiency, cost, transaction, easy to get it?
quality, reliability purchase Can it connect
with other
N product easily?
 Capability to Set a Strategic Price

EL
• What price will quickly help attract, create, and retain a large
pool of new customers without burning a big hole in your
cash book.
• Competitors’ price vis-à-vis features.

PT
• Convenience: different form – same function, different form
and function but same objective.
N
 EL
Dynamic Capabilities Drive Sustainability

PT
N
Dynamic Capabilities
• Dynamic – the capacity to dynamically match competencies

EL
for realigning strategies with changing business environment.
• Capabilities – the capacity to adapting, integrating and
reconfiguring internal and external organizational skills,
resources, functional competencies and addressing

PT
weaknesses to match the requirement of a changing
environment.
• In the process, a firm achieves stronger competitive
advantage and creates greater wealth.
N
• Building of core competencies that is difficult to imitate.
 Types of Dynamic Capabilities
 Firms identify, arrange and develop resources to create superior

EL
values to its customers:
o Product development
o Alliance building
o Strategic decision making

PT
 Successful firms in different industries are found to possess these
capabilities.
 A firm builds a learning mechanism to help itself evolve and
improve dynamic capabilities over time.
N
 Dynamic Capabilities and Resource Optimization
 Using dynamic capabilities managers alter the resource base to
create value

EL
o Acquire and shed resources
o Integrate disparate resources
o Combine resources in new ways
Generate new value-creation strategies

PT
o

 Create New Competitive Advantages

o Relative to competition and substitutes
o Creates new barriers to entry
o Mirror the dynamism as they evolve
N
 Dynamic Capabilities

SENSE SEIZE TRANSFORM

Identify Design and Refine Realign Structure

EL
Opportunities/ Business Model: and Culture
threats
Commit resources

Technological Technology Align Existing Invest in

PT
possibilities Development Capabilities Additional
Anticipate Defend Capabilities
Competitors Intellectual
Properties

Strategy
N
 “Best Practices”
• There are archetypical frameworks for dynamic capabilities across

EL
industry types.
o Irrespective of industries, investing in intellectual properties to build
barriers to entry is highly effective.
o Cross-functional teams for product development.
Increased access to information.

PT
o
o Exploit the advantages of open innovation.
o Proactive leadership.
N
 Product and Building Dynamic
process Capabilities is seen as an
development
Integrative Approach to

EL
Investment Technology
in R&D adoption Competitive Advantage

Dynamic
Capabilities

PT
Organizational Manufacturing
learning capabilities

Generation
N
Human
resource of IP
 EL
Any enterprise can make choices that allow it to build assets or
resources—be they project management skills, production
experience, reputation, asset utilization, trust, or bargaining
power—that make a difference in its sector.

PT
N
Bill Gross

EL
• Idealab, the first business incubator in the world, was founded
and mentored by Bill Gross.
• He started more than hundred startups and many of which
became unicorns.

PT
N
Top 5 Factors for Success Across 200 Companies

42%

EL
The timing

The team &

Execution 32%
28% The timing

PT
The idea
The team & Execution
The idea
The Business
Model 24% The Business Model
The Funding
The Funding
14%
N
 Examples: airbnb and Uber
Besides a good strategy and idea, another factor of success was

EL
•
timing.
• Both took the advantage of economic meltdown.
• Both customers and service providers were looking for making

PT
some extra money.
N
 Identify your specific audience
• A sharp/narrow targeting a focused customer segment

EL
help to clearly define buyers’ persona or couple of
personas.
• Identify the sharper aspects of the pain.
• Concentrated on building solution that is targeted to

PT
these exact aspects.
• Helps to come up with stories that will resonate with
majority of the customers.
• A much better match between demographics challenges
N
and solutions.
 Develop a Superior Value Proposition

EL
• Understand the dimensions of the pain, the available
solutions, and the gap.
• Identify how you can build something that better solve the
problem and the reasons why customers should prefer your

PT
product over others.
N
 Establish business processes.
• Understand and determine key business activities specific to

EL
the business model.
• If you are a manufacturer, the backward-forward logistics,
manufacturing process, inventory management, working
capital management, sales management, recovery of sales

PT
proceeds, customer satisfaction, design & development, and
many more are part of the business process.
• If you are an online auctioning business, marketing, product
delivery, customer acquisition, payment gateway, portal and
N
database management are some of the key business
processes.
•
Record key business resources

EL
• Identify and arrange essential business resources to ensure your
business model is adequately prepared to sustain the needs.
• Common resource examples may include a website, capital,
warehouses, intellectual property and customer lists.

PT
• Keep in mind the changing technology paradigm.
N
Network and Maintain Relation with Key Business Partners

EL
• Almost all businesses are interdependent.
• Those capable of networking with the right partners, see their
processes work smoothly.

PT
• Those incapable of doing so, perish.
N
Create a Story that Resonates with Customers Helping you to
Build Loyal customer Base

EL
• You need to radically launch your product and gain
customers acceptance.
• A story that connects your customers’ emotion, will help
generate leads and close sales.

PT
• Create a blueprint of the customer’s journey from
becoming aware to actually buying, spreading word of
mouth and then coming back.
N
 Keep Innovation as Part of Regular Business Process
• The many assumptions based on which you build your business

EL
model will change quickly.
• Until you begin to serve your paying customers, you really do not
know if your product serves them well.

PT
• Remain prepared to receive some nasty surprises both from
customers and competitors.
• Keep innovation as a regular business process.
• Review your plan and the developments around your
N
business segment preempmtively.
 EL
⮚ Teece, D. J. (2018). Business models and dynamic capabilities. Long Range Planning, 51(1), 40-49.
⮚ Casadesus-Masanell, R., & Ricart, J. E. (2011). How to design a winning business model. Harvard business
review, 89(1/2), 100-107.

PT
⮚ Kim, W. C., & Mauborgne, R. (2000). Knowing a winning business idea when you see one. Harvard
business review, 78(5), 129-138.
⮚ Icons from [Link]
⮚ [Link]
N
[Link]
⮚ [Link] -- source of some images
 EL
• Any firm in any industry must acquire dynamic capabilities to sustain and grow.
• Clear understanding of business model, exceptional utilities, dynamic

PT
capabilities, how satisfied the customers are, loyal and growing customers base,
are critical for success of a business.
N
N
PT
EL
 EL
PT
Course Name: Entrepreneurship Essentials
Faculty Name: Manoj Kumar Mondal
Rajendra Mishra School of Engineering Entrepreneurship
IIT KHARAGPUR
N
Module 04:
Lecture 20 : Business Model Innovation
 EL
⮚ Many forms of business model innovation.
⮚ Why to innovate business model?

PT
⮚ Some examples of business model innovation in India.
N
 Business Model & Business Model Innovation (BMI)

EL
• “A business model describes the rationale of how an organization
creates, delivers, and captures value, in economic, social, cultural
or other contexts. The process of business model construction and
modification is also called business model innovation and forms a

PT
part of business strategy.” - Wikipedia
N
 Business Model
• Business model is core aspect as to how a business creates

EL
and profitably delivers value to a group of satisfying
customers.
• It is imperative that a business creates social,
environmental, and cultural values for sustainability in the

PT
long run.
• Business model includes the purpose, vision, target
customers, offerings, the value proposition, organizational
structures, business process, infrastructure
N
requirement, values and culture.
 Innovation
• Innovation is the process of turning new ideas and knowledge
into value, in the form of new products, services, or ways of doing

EL
things.
• It is deceptively complex, and goes beyond mere creativity and
invention to include the steps necessary for benefiting people.
• Very few innovations are groundbreaking. Majority are value

PT
addition to on earlier versions.
• Evidently, innovative firms significantly outperform others.
• Innovations fuel the majority of the world's long-term
productivity and economic growth.
N
 Necessity Is the Mother of All Innovations
• If you are wondering which direction new technologies will

EL
emerge,
• Perhaps the best place to look at is the severest of pains the
society is facing or likely to face in the immediate future.
• Pipping into research laboratories may not be much help.

PT
• Go out and do something. You may encounter
problems and start building solutions to that.
• Many entrepreneurs built solutions to problems they
N
faced themselves. Phanindra Sama of redBus, Mahendra
Pratap of Integra Micro Systems and many more.
 Business Model Innovation (BMI)
• A business model is a business context explaining how an

EL
organization creates and delivers values in economic, social, cultural
or other forms.
• The process of reconstruction of various aspects of the business for
meeting changing market behaviour and delivering increasingly
superior value to customers is business model innovation.

PT
• Execution of the plan is an integral part of BMI and thus, management
is inextricable part of BMI. Management innovation is a continuous
process.
N
 EL
• When the game gets tough, change the game.
- Belinda Anne Tamayo

PT
N
Innovation Contexts
Technology
innovation

EL
Source
Innovation Business [Link]
for social Model
benefits Innovation

Innovation

PT
Innovation Government
N
systems innovation
 Technology Innovation – Emerging Areas

EL
• Fourth industrial revolution • 5G
• Biotechnology • Internet of things
• 3D printing • Autonomous transportation

PT
• Virtual and augmented reality • Digital communication
• Artificial Intelligence & • Blockchain
Robotics • Quantum computing
• Human enhancement
N
• Advanced materials
Business Model Innovation: Industrial Revolution - 4.0

Disrupts status quo to provide better comforts to

EL
•
people or alleviate pain.
• The future of economic progress
• Shape corporate governance

PT
• Next generation information technology
• Will promote new multinationals
N
Is Technology Innovation Different from BMI?

EL
• All technology innovations are part of BMI
• Some BMIs are through technology innovation

PT
N
“Get the business model wrong and there is no business” – Prof.
David Teece, University of California, Burckley
The What, Why, How, and Whom of BMI

EL
 What – What innovations are you executing?

Why to innovate business model – will it create more value to



PT
your customers and bring advantages to your organization?
 How – how are you going to create and deliver economic,
social, cultural and environmental values?
N
 For whom – Whose problems are you aiming alleviate?
Business Model Innovators Outperform Competition in
Terms of Operating Margin, Shareholders’ Return
BMI Influences Operating Margin
5.2

EL
6
5
4
3
2 0.1

PT
1
0
-1 N -0.3
 Business Model Innovation is Possible in Several Forms
The product The products Trust Free (or nearly
as service as an premium free)/
Value and outcome experience Freemium

EL
Proposition Whole Foods
Google
General Electric Apple – iPod Gaana
TATA
SaaS Candle with aroma Spotify
Deconstructi Integration/ Low cost Direct
on acceleration distribution
Operating of the supply

PT
Model Li & Fung Ltd.
chain Google
Adani Zara Aravind CCD
Reliance Tata Motors Nestle Nespresso

Business Open Person to Adjacency Serial

person
System
N
Ikea’s Mega Mall Virgin Group
PayPal
Architecture Facebook PayTM
Division

Recreated from BCG Research

Hamel, G. (2006). The why, what, and how of

EL
management innovation. Harvard business
review, 84(2), 72.

PT
N
 Management Innovation
• General Electric. • Procter & Gamble. • Linux.
DuPont. Visa.

EL
• •

• What makes them stand out?

• Great products? Yes.

PT
• Great people? Sure.
• Great leaders? Usually.

• But if you dig deeper, you will find that the

fundamental reason for their success: management
N
innovation.
 Management Innovation
Focused R&D

EL
• In the early 1900s, General Electric of Thomas Edison
disciplined the chaotic process of scientific discovery into a
systematic process of innovation.
• Results: over the next 70 years, won more patents than any

PT
other company in the US.
• Much of GE’s competitive prowess during the century
following it can be traced to that extraordinary
accomplishment.
N
 DuPont
• In 1903, DuPont systematized capital-budgeting techniques. A few

EL
years later, the company also developed a standardized way of
estimating return on investment.
• They used it in comparing the performance of its numerous
product departments.

PT
• These innovations and more helped DuPont become one of
America’s industrial giants.
N
 Procter & Gamble
• Procter & Gamble pioneered to formalize brand management
since 1930s.

EL
• In the decades since, P&G has steadily built brands with loyal
customer followings.
• Brand and other intangible assets have been driving the

PT
success of the company ever since.
• Today, P&G owns some 16 brands that have been producing
more than $1 billion in sales every year.
• P&G is pioneer in ‘Corporate Entrepreneurship’, and is an
N
aggressive promoter (and beneficiary) of ‘Open Innovation’.
 Visa Inc.
• Visa’s success is attributed to organizational innovation.

EL
• Visa is almost a virtual company and their main asset is their
brand (intellectual property) with global visibility.
• Starting in the 1970s, Visa has created a global network that

PT
links more than 21,000 financial institutions and 1.3 billion+
cardholders.
N
 Linux
• Linux – the open source computer operating system.

EL
• Linux is the initiative that extended the concept of other
innovations like the general public license and online
collaboration tools.

PT
• Open source development has proven to be a highly
effective mechanism for engaging people without
geographical or cultural boundary.
N
Uber
• Uber could really define the pain points and applied latest

EL
technologies to solve it. In urban places of high mobility -
• It is very difficult to get a taxi.
• One that would come and pick you up

PT
• One with some identity for reliability and safety
• To know when a taxi will arrive.
• Ease of paying for the tip.
N
• They innovated the solution based on the pains.
Netflix
• Netflix has specialized in online on-demand video streaming.

EL
• Starting in 1999, the company now has over 117
million subscribers in 190 countries.
• The company constantly innovates to give new experience to

PT
customers.
• In 2018, Netflix innovated ‘choose-your-own-adventure’
programming, that presents a vision for interactive television.
N
 iPod
• A single invention of iPod has affected many markets at once

EL
• – the music industry,
• hardware vendors,
• the labor market,

PT
• artists and
• consumers themselves.
• In a quest to make music more portable and on-demand
designers, engineers and marketers at Apple got together
N
to create the iPod and achieved huge success.
Innovation Lessons from Steve Jobs: The story of iPod

EL
• Explore the customer experience and work backwards to
technology.
• Know the competitors’ value proposition and offer superior value.

PT
• Recruit a balanced and excellent team.
• Connect the dots.
• Obtain feedback and simplify constantly.
N
 EL
“You can’t connect the dots looking forward; you can only connect
them looking backwards. So you have to trust that the dots will
somehow connect in your future. You have to trust in something –
your gut, destiny, life, karma, whatever. This approach has never let

PT
me down and it has made all the difference in my life.” – Steve Jobs
N
Hindustan Unilever: BMI

EL
• Fast moving consumer goods (FMCG) companies were
focused mainly to the urban markets.
• In the face of steep competition, Hindustan Unilever in
2004, shifted the focus to rural India.

PT
• Smaller sachets of personal care products were made
available.
• Distribution and warehousing were redesigned.
N
• New products were launched.
 Business Model Innovation in India
ZIPDIAL (zipdial)

EL
The business model

PT
The mobile
Customer Customer
user is now The desired
Customer gives a relation is
subscribed information is
wants to missed call established
with the immediately
know about a using mobile without
customer sent to the
product phone to a spending a
service inbox
given number single paisa
section
N
 Novelty
• No unsolicited push message.

EL
• Only the interested gives a missed call to get information about some offer.
• No cost on the part of the company and the customer (missed call does not cost).
• One of the cheapest process of building customer awareness and relationship.
• Times of India’s initiative Against Corruption campaign received 4.6 million

PT
unique missed call.
• Its clients include Coca-Cola, Disney, P&G, Dove and many more.
• Founded in 2010, Twitter acquired zipdial for about US $ 50 million in 2014.
• Facebook uses the same idea in its Click-to-Missed-Call Ad that helps
N
advertisers in customer acquisition.
Goonj: A non-government organization (NGO)
• Goonj collects used cloths in donation

EL
• Distributes them among the poor in exchange of some work.
• Founder: Anshu Gupta
• Revenue: $ 9.2 M (old data: 2011-12)

PT
• Employees: 75
• Goonj has partnered with Puma to promote circular
economy.
Facebook for its Click-to-Missed-Call Ad product that helps
•
N
advertisers in customer acquisition.
 Interview Street
• Key People: Vivek Ravishankar, Harishnkaran K

EL
• It has been started by two alumni of NIT Trichy, a premier
institution in India.
• They conduct real programming tests to help companies to screen
candidates using their web-based tools.

PT
• If you can write brilliant codes, you will be hired, no matter what
your qualification is.
• They provide services to companies such as Amazon,
N
Facebook, Morgan Stanley and Walmart.
 Mitra Biotech
• Key people: Mallikarjun Sundaram

EL
• Boston and Bengaluru
• Mitra Biotech develops and provides novel technologies that
personalize cancer treatment.

PT
• Founded by a group of researchers from Harvard and MIT, Mitra
Biotech tries to lessen the risk of chemotherapy.
• They have developed a technology CANScript to create an
artificial tumor of the patient outside the patient’s body.
N
Some Recent Disruption for BMI

EL
• Thomas Cook, Cox & Kings
• Kodak – started in 1841 and failed in 2019. Company blamed surge
of online booking for its failure.

PT
• Borders
N
 Recreated from
[Link]

EL
Business model
8
innovation is a 2
dynamic,
iterative, and 7 3

PT
continuous
process that
6 4
seemingly
moves in circle 5
N
 Why Do Companies Engage in BMI

EL
Cost reduction 58

Strategic flexibility 57

Focus and specialisation 44

PT
Rapidly exploit new market/product
opportunities 42

Move from fixed to variable cost 22

Share or reduce risk and capital
investment 22
N
0 10 20 30 40 50 60
 EL
⮚ [Link]
⮚ Teece D. J. (2018) Business models and dynamic capabilities, Long Range Planning, 51(1), 40-49
⮚ [Link]

PT
⮚ [Link]
⮚ What is BPM Anyway? Business Process Management Explained
([Link]
⮚ Teece D. J. (2010) Business Models, Business Strategy and Innovation, Long Range Planning, 43, 173-194
N
⮚ [Link]
⮚ [Link]
⮚ [Link]
 EL
 Most of the reasons for failure can be averted with preemptive
strategies, comprehensive plan, and smart execution.

PT
 Failure is an investment for gaining maturity and achieve success.

“Life’s too short to build something nobody wants. “- Ash Maurya

N
N
PT
EL