Entrepreneurship WS2024-2025 PDF

Introduction to Entrepreneurship WS 2024/2025 Dr. Dinah Murad 1 Plan for the Semester Date Topic 15/10/24 Introduction and Business Ideas 29/10/24 Business Models and Value Proposition 12/11/24 Market Research and Validation 26/11/24 Business Planning an...

Introduction to Entrepreneurship WS 2024/2025 Dr. Dinah Murad 1 Plan for the Semester Date Topic 15/10/24 Introduction and Business Ideas 29/10/24 Business Models and Value Proposition 12/11/24 Market Research and Validation 26/11/24 Business Planning and Strategy 10/12/24 Financial Planning and Fundraising 7/1/25 Operations and Execution 21/1/25 Innovation, Risk Management, and Scaling cw 6 (2025) Exam (60 minutes, multiple choice) 2 Your chance for a better exam result From today I will provide you with a little task (or homework) If you work on this task until the next lecture, you will receive points that will be credited to your exam Please also send the task to me [email protected] Depending on the time, 2-3 students will present the result of the tasks in a maximum of 2 minutes in the next lecture. This will earn you an extra point. 4 29/10/24 Agenda Business Models and Value Proposition Recap How to get to a Business Model Business Models Value Proposition Your chance Key Learnings 5 29/10/24 Agenda Business Models and Value Proposition Recap How to get to a Business Model Business Models Value Proposition Your task for next time Key Learnings 6 What do you remember? Start with why - the golden circle: customers don’t buy what you do, but why you are doing it no problem (solution) - no business your customer is the most important person it good to have a team: ask partners, peers, family, friends… Develop your leadership skills nothing will happen in your comfort zone: GET OUT OF THE HOUSE AND TALK TO PEOPLE 7 29/10/24 Agenda Business Models and Value Proposition Recap How to get to a Business Model Business Models Value Proposition Your chance Key Learnings 8 What have you heard about? https://www.menti.com : 1148 7641 https://www.menti.com/alw7jo4bq6pr 9 Framework Purpose Advantages Disadvantages Reference Visual overview of all key Comprehensive, promotes Can be too broad for early- https://www.strategyzer.co business components clarity stage startups m/canvas/business-model- Business Model Canvas canvas Simplified, action-oriented Focuses on problems, Lacks detail in https://leanstack.com/lean Lean Canvas version of Business Model solutions, and customer infrastructure and canvas Canvas segments partnerships Aligns product features Sharpens product-market Only focuses on one part https://www.strategyzer.co with customer needs fit of the overall business m/canvas/value- Value Proposition Canvas model proposition-canvas Analyzes internal and Easy to understand, Static, doesn't adapt to https://www.mindtools.co SWOT Analysis external factors strategic insights iterative business m/asubt3m/swot-analysis development Analyzes industry Helps understand market Focuses on established https://hbr.org/1979/03/ho Porter's Five Forces competition dynamics industries, less applicable w-competitive-forces- for new markets shape-strategy Identifies uncontested Focuses on innovation, Difficult to apply in highly https://www.blueoceanstra Blue Ocean Strategy market space differentiation competitive, mature tegy.com/ markets Customer-centric problem Drives innovation, human- Time-consuming, needs https://hbr.org/2008/06/de Design Thinking solving centered approach interdisciplinary teams sign-thinking Iterative development with Quick to adapt, reduces Can be chaotic without https://scaledagileframewo SAFe Lean Startup Cycle customer feedback waste clear process management rk.com/lean-startup-cycle 10 Business Model Canvas Developed by Alexander Osterwalder, this framework provides a visual template with nine essential building blocks (Customer Segments, Value Propositions, Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key Partnerships, and Cost Structure). It allows entrepreneurs to map out all key aspects of their business in one view, fostering clarity and alignment. Useful for refining existing models or brainstorming new ideas. Source: https://www.strategyzer.com/canvas/business-model-canvas 11 Business Model Canvas http://www.businessmo delalchemist.com/tools 12 Example: Airbnb Airbnb’s model fits perfectly into the Business Model Canvas, highlighting its customer segments (travelers and hosts), value proposition (affordable, diverse accommodation options), and key resources (the platform itself and trust mechanisms 13 Lean Canvas Created by Ash Maurya, this is a version of the Business Model Canvas specifically adapted for startups, focusing on problems and solutions instead of infrastructure. It highlights customer problems, unique value propositions, and key metrics, emphasizing a fast, iterative approach to building a business. Ideal for entrepreneurs seeking a streamlined, actionable version of the Business Model Canvas. Source: https://leanstack.com/leancanvas 14 Lean Canvas https://cdn.kettufy.io/gp.kettufy.io/documents/gr uenderplattform.de/Lean _Canvas_Gruenderplattf orm.pdf 15 Example: Dropbox Dropbox started with a minimal viable product (MVP) and iterated based on feedback, solving customer problems like easy file storage and access, which aligns well with the Lean Canvas framework. 16 Value Proposition Canvas A complementary tool to the Business Model Canvas, this framework helps businesses ensure their product aligns with customer needs by focusing on customer jobs, gains, and pains. It hones in on the “Value Proposition” building block from the Business Model Canvas to improve product-market fit. Effective for teams working on refining the value they provide to customers. Source: https://www.strategyzer.com/canvas/value-proposition- canvas 17 Business Model Canvas https://www.youtub e.com/watch?v=aN3 6EcTE54Q&t=36s 18 Example: Tesla Tesla's value proposition lies in offering sustainable, high-performance electric vehicles that align with customer needs for luxury and eco- friendliness, which can be easily analyzed with the Value Proposition Canvas. 19 SWOT Analysis This traditional framework is used to identify a business’s Strengths, Weaknesses, Opportunities, and Threats. It is often used alongside other canvases to analyze the internal and external factors affecting the business. Best suited for strategic planning and assessing competitive positioning. Source: https://www.mindtools.com/asubt3m/swot-analysis 20 SWOT analysis https://en.wikipedia.org/wiki/SWOT_an alysis#/media/File:S WOT_en.svg 21 Example: Nike Nike can be analyzed using SWOT by examining its strengths (brand equity, innovation), weaknesses (dependency on third-party manufacturers), opportunities (digital sales), and threats (competition, market saturation). 22 Porter’s Five Forces Developed by Michael Porter, this framework evaluates the competitive forces within an industry: Threat of New Entrants, Bargaining Power of Suppliers, Bargaining Power of Buyers, Threat of Substitutes, and Industry Rivalry. It helps entrepreneurs understand the external pressures on their business and the overall attractiveness of entering a market. Useful for market analysis and strategic decision-making. Source: https://hbr.org/1979/03/how-competitive-forces-shape- strategy 23 Porter’s five forces https://www.mindto ols.com/at7k8my/po rter-s-five-forces 24 Example: Apple Apple's competitive position can be analyzed using Porter’s Five Forces by examining the bargaining power of suppliers and buyers, the threat of substitutes (Android devices), and the rivalry among competitors (Samsung, Google) 25 Blue Ocean Strategy This framework encourages businesses to create uncontested market space by innovating beyond existing demand and competition. Rather than competing in saturated markets (Red Oceans), it seeks to differentiate businesses by focusing on value innovation. Suitable for companies looking to differentiate or disrupt an industry. Source: https://www.blueoceanstrategy.com/ 26 Blue Ocean Strategy - Example: Cirque du Soleil Cirque du Soleil revolutionized the circus industry by creating uncontested market space, blending circus performance with theater and storytelling, which is a textbook example of the Blue Ocean Strategy. https://www.cirque dusoleil.com/ 27 Design Thinking A human-centered approach to innovation that integrates the needs of people, the possibilities of technology, and the requirements for business success. It focuses on empathy, ideation, and prototyping to create innovative solutions that are both desirable and viable. Effective for developing customer-focused business models and products. Source: https://hbr.org/2008/06/design-thinking 28 Design Thinking https://de.wikipedia.org/wiki/Design_T hinking 29 Example: Apple Apple is known for using Design Thinking to create products that are intuitive, user-friendly, and beautifully designed. This approach helped Apple revolutionize the personal technology market with products like the iPhone, iPad, and MacBook. Apple focuses on understanding the user experience deeply, emphasizing empathy and iterative design, which has been key to its product innovation and success. By putting the customer at the center of its design process, Apple created products that don't just meet functional needs but also create an emotional connection with users. This design philosophy is part of why Apple products are known for their ease of use and high customer loyalty. 30 SAFe Lean Startup Cycle Adapted from Lean Startup methodologies, this framework integrates agile principles, focusing on developing, testing, and iterating products quickly with real customer feedback. It is especially useful in tech startups that aim for rapid market entry. Source: https://scaledagileframework.com/ 31 SAFe Lean Startup Cycle https://scaledagilefr amework.com/#larg esolution 32 SAFe Lean Startup Cycle: Spotify Spotify uses a lean and agile methodology to continuously develop and refine its product based on customer feedback, aligning well with the SAFe Lean Startup Cycle approach. 33 29/10/24 Agenda Business Models and Value Proposition Recap How to get to a Business Model Business Models Value Proposition Your chance Key Learnings 34 Business Model The business model tells you where your money comes from. 35 Wich Business Models do you know https://www.menti.com/alw7jo4bq6pr 36 Direct-to-Consumer (D2C) Channel Models Business Model: Subscription Business Model: On-Demand Model Service Model Example: Netflix – Sells directly Example: Uber – Directly to consumers through its connects drivers with customers platform, with no via an app. intermediaries. Channel: Mobile app. Channel: Online, app-based. Business Model: Direct Sales Business Model: Freemium Model Model Example: Spotify – Directly Example: Apple – Sells directly provides a free service and to consumers via physical stores charges for premium features. and its online store. Channel: Online, app-based. Channel: Physical retail and online. 37 Intermediary/Platform-Based Channel Models Business Model: Marketplace Model Business Model: Franchise Model Example: eBay – Acts as a platform Example: McDonald's – Franchises sell connecting buyers and sellers. through physical locations, while the corporate office supports and licenses the Channel: Online platform. brand. Business Model: Affiliate Marketing Channel: Physical franchise locations. Model Business Model: Advertising Model Example: Amazon Affiliate Program – Third-party affiliates promote Example: Google – Offers its services for and sell products through free to users, but advertisers pay for Amazon's platform. visibility on its platform. Channel: Website and third-party Channel: Online platform (search, YouTube). links. 38 Physical/Service Location Channel Models Business Model: Franchise Model Business Model: Licensing Model Example: 7-Eleven – Franchisees Example: Disney – Licenses its characters and operate physical stores. intellectual property to other companies for merchandise and experiences. Channel: Brick-and-mortar locations. Channel: Physical retail (licensed products), theme Business Model: Razor and Blade Model parks, and media. Example: Gillette – Razors are sold Business Model: Product-as-a-Service (PaaS) through physical retail outlets, and consumables (blades) are Example: Xerox – Provides managed print services purchased repeatedly. through physical equipment at the customer’s location. Channel: Physical retail and online. Channel: Physical locations, managed service agreements. 39 Hybrid (Online and Offline) Channel Models Business Model: Freemium Model Business Model: Razor and Blade Model Example: Dropbox – Provides free and premium services through an online platform, used in both Example: Nespresso – Sells personal and professional (offline) settings. coffee machines (offline), but capsules are frequently Channel: Online services integrated with offline use (files purchased online or through accessible anywhere). physical stores. Business Model: Subscription Model Channel: Online and physical stores. Example: Amazon Prime – Provides benefits like free shipping (offline service) combined with streaming services (online). Channel: Hybrid, physical product shipping and digital streaming. 40 Business-to-Business (B2B) Channel Models Business Model: Licensing Model Business Model: Advertising Model Example: Microsoft – Licenses Windows Example: Facebook Ads – Businesses software to manufacturers (e.g., Dell) and pay Facebook to advertise their businesses. products and services to users. Channel: B2B contracts, online, and software Channel: Online advertising platform. distribution. Business Model: Product-as-a-Service (PaaS) Example: GE Aviation – Sells aircraft engines as a service, with ongoing maintenance and operational support. Channel: B2B agreements, physical servicing, and online monitoring. 41 Multi-Sided Platform Models Business Model: Marketplace Business Model: Advertising Model Model Example: YouTube – Provides free content to users, Example: Airbnb – Connects while advertisers pay for exposure to that audience. hosts (sellers) and guests (buyers) through a digital Channel: Online platform (user-generated content platform. with advertiser integration). Channel: Online platform. 42 Summary Direct-to-Consumer models like Netflix and Spotify sell directly to users through online platforms. Intermediary/Platform-Based models like eBay and Amazon Affiliates depend on third- party interactions facilitated by an online platform. Physical/Service Location models like McDonald's and Gillette depend on physical locations or products sold in stores. Hybrid models like Amazon Prime and Nespresso integrate both online and offline channels. Business-to-Business (B2B) models like Microsoft and GE Aviation focus on selling directly to other businesses. Multi-Sided Platform models like Airbnb and YouTube rely on facilitating interactions between two distinct groups. 43 29/10/24 Agenda Business Models and Value Proposition Recap How to get to a Business Model Business Models Value Proposition Your chance Key Learnings 44 What is a value proposition? https://www.menti.com/alw7jo4bq6pr 45 Why is a Value Proposition so important? Customer Problem or Need: Identifies what the customer is struggling with or looking to improve. Solution: Describes how your product/service solves that problem or fulfills the need. Unique Differentiation: Explains why your solution is better or distinct from others in the market. 46 Example: For Apple’s iPhone, the value proposition could be stated as: “A high-performance smartphone that combines cutting-edge technology, seamless integration with Apple’s ecosystem, and a user-friendly design, providing an unmatched user experience.” Here, Apple addresses customer needs for innovation, quality, and ease of use, while highlighting the uniqueness of its ecosystem and premium experience. In short, a Value Proposition answers the customer’s question: "Why should I choose this product or service over others?" 47 Value Proposition iPhone 29/10/24 Agenda Business Models and Value Proposition Recap How to get to a Business Model Business Models Value Proposition Your chance Key Learnings 49 Your chance to rack up points that will count towards the exam You can get two points for each homework assignment if you send it to me or present it here. You get this chance 5 times in total, so you can get a maximum of 10 points. This corresponds to 17% of the exam points. Yes – you can work in teams.  Your chance to rack up points that will count towards the exam -apple watch -kindle Choose 2 products or services (it doesn't matter which ones) and create the corresponding value proposition based on this scheme. https://www.strategyzer.co m/library/the-value- proposition-canvas While filling the value proposition format think of this check-list You know who the customers are and have a clear picture of them You know the customers' wishes and needs You know the customers' problems, risks and concerns The value proposition matches the customer's requirements Customers have a real problem that can be solved with the idea/product  „Dream big. Start small. But most of all, start!“ Simon Sinek 29/10/24 Agenda Business Models and Value Proposition Recap How to get to a Business Model Business Models Value Proposition Your chance Key Learnings 54  Take Home Messages Understand the Value Proposition (What and Why) Customer-Centric Value Proposition is key. The Value Proposition Canvas is an effective tool to achieve this alignment. A strong value proposition should clearly communicate what makes the product or service unique in solving customer problems more effectively than alternatives. There are several ways to creating Business Models. For startups the Canvas Business Models are a good method to start with Business Model Canvas: Provides a structured, visual overview of the essential components of a business (Customer Segments, Channels, Revenue Streams, etc.) There are different types of Business Models. They are an essential part of the Product-Market-Fit Product-Market Fit: Achieving a good product-market fit means the product addresses a real need in a way that resonates with customers. Distribution and interaction models (The Business Model) companies use to reach customers include Direct-to-Consumer, platform-based intermediaries, physical locations, hybrid channels, B2B, and multi-sided platforms. Innovation and Value Creation: Value creation lies at the heart of successful business models. Identifying unmet customer needs and addressing them through innovative solutions is key to standing out in the market. Customer Discovery: Actively engaging with potential customers helps validate the problem-solution fit and refine both the value proposition and the business model. Customer feedback is invaluable in shaping the final product. 55 Next time - 12.11.2024 Market Research and Validation 56