IDEO, a Design and Innovation Consulting Firm located in Palo Alto, California, recently posted a video presentation by Tom Humle. "Visualize Your Business Model" takes you through the process of creating and developing a successful business model.
Here are the key points I took away from the presentation.
Visualizing your model can be an effective way to help you "communicate it, consider the whole" and "be creative." Visualizing can help us so that we communicate more efficiently by referring to different facets as we explain. The ability to communicate a model can be very important, especially if you are proposing to investors.
Step 1) A) Value Proposition & B) Market Segment...
A) Value Proposition) What is the value that is being created? What is the need that is being filled? A common tactic of developing a successful business model is creating a solution to a common problem. What is the frustration that is being remedied by your business model? This is where it all starts.
B) Market Segment) What is your Market Segment (who will "realize the value") or who will benefit from your model? Humle mentioned to "keep an open mind" when thinking of ways that the need can be filled. Also, ask questions like "How many are there?" and are their numbers "increasing or decreasing" when analyzing the Market Segment.
Step 2) How you deliver & realize value:
A) Distribution Channels: Realizing the value, getting the product or service to the consumer or user.
B) Marketing Channels: The process of making the product or service known and the methods to do so. Humle mentioned that lack of this was one of the biggest downfalls of a business model.
Pricing Model) How the value created is re compensated for. Prices can either be fixed, variable or subscription based.
Step 3) Competitors) The economy today consists of "dynamic markets" which is why it is important to differentiate the model from what is already available to consumers.
Step 4) A) How To Create The Value) Partners: How will you bring this value to life? Who will you partner with or hire? Capabilities: What teams do you need in place and what skills do they need to accomplish your goals? These are things to consider when thinking about how the ultimate goal of the model will be achieved.
B) Costs) The costs of creating, marketing and delivering a model all need to be addressed and well thought about before pursuing it. This ties into the next segment of a business model...
C) Profitability) How much value is added by the model versus the costs of creating it? The goal of any business is to maximize value while minimizing costs.
Step 5) Growth Strategy) Constant progression and development of a business model is part of what makes it successful. This also deals with being able to estimate more precisely where your business will be in the future. which can help with important decisions.
This overview should help organize your thoughts and get a clear vision of what you want to achieve with your business goals.
View Tom Humle's blog @ weijiblog.com.
I first discovered IDEO back in 2009 when a documentary on design and how it affects the world around us came out. Objectified, a film by Gary Hustwit, is a very interesting movie that I would recommend to anyone interested in design, product ideas, inventing, how it affects us, the psychology of design and the companies/people behind it. Designers from IDEO, Smart Design, Apple, BMW Group and others were all featured in the film.
Here are the key points I took away from the presentation.
Visualizing your model can be an effective way to help you "communicate it, consider the whole" and "be creative." Visualizing can help us so that we communicate more efficiently by referring to different facets as we explain. The ability to communicate a model can be very important, especially if you are proposing to investors.
Step 1) A) Value Proposition & B) Market Segment...
A) Value Proposition) What is the value that is being created? What is the need that is being filled? A common tactic of developing a successful business model is creating a solution to a common problem. What is the frustration that is being remedied by your business model? This is where it all starts.
B) Market Segment) What is your Market Segment (who will "realize the value") or who will benefit from your model? Humle mentioned to "keep an open mind" when thinking of ways that the need can be filled. Also, ask questions like "How many are there?" and are their numbers "increasing or decreasing" when analyzing the Market Segment.
Step 2) How you deliver & realize value:
A) Distribution Channels: Realizing the value, getting the product or service to the consumer or user.
B) Marketing Channels: The process of making the product or service known and the methods to do so. Humle mentioned that lack of this was one of the biggest downfalls of a business model.
Pricing Model) How the value created is re compensated for. Prices can either be fixed, variable or subscription based.
Step 3) Competitors) The economy today consists of "dynamic markets" which is why it is important to differentiate the model from what is already available to consumers.
Step 4) A) How To Create The Value) Partners: How will you bring this value to life? Who will you partner with or hire? Capabilities: What teams do you need in place and what skills do they need to accomplish your goals? These are things to consider when thinking about how the ultimate goal of the model will be achieved.
B) Costs) The costs of creating, marketing and delivering a model all need to be addressed and well thought about before pursuing it. This ties into the next segment of a business model...
C) Profitability) How much value is added by the model versus the costs of creating it? The goal of any business is to maximize value while minimizing costs.
Step 5) Growth Strategy) Constant progression and development of a business model is part of what makes it successful. This also deals with being able to estimate more precisely where your business will be in the future. which can help with important decisions.
This overview should help organize your thoughts and get a clear vision of what you want to achieve with your business goals.
View Tom Humle's blog @ weijiblog.com.
I first discovered IDEO back in 2009 when a documentary on design and how it affects the world around us came out. Objectified, a film by Gary Hustwit, is a very interesting movie that I would recommend to anyone interested in design, product ideas, inventing, how it affects us, the psychology of design and the companies/people behind it. Designers from IDEO, Smart Design, Apple, BMW Group and others were all featured in the film.
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