A New Approach to Designing

Business Models
Alex Osterwalder
Lift Events Sàrl © 2011
[@] getab.li/23901
Video:

Rating Take-Aways

8
9 Applicability • The automaking process offers valuable lessons for entrepreneurs. Car manufacturers
sketch, prototype and test various ideas before deciding on the best version and putting
9 Innovation it into mass production.
6 Style
• Entrepreneurs, on the other hand, rarely entertain alternate business models before
launching their enterprises. This tendency incurs great risks and costs.
  • However, start-ups can heighten their chances of success by exploring alternatives to
Focus each and every constituent of their business models.

• A typical business model contains nine components: “customer segments, value

Leadership & Management proposition, channels, customer relationships, revenue streams, key resources, key
Strategy activities, key partners” and “cost structure.”
Sales & Marketing
• Solar energy firm SunEdison successfully navigated around failure by
Finance reconceptualizing the pricing and financing elements of its business model.
Human Resources
IT, Production & Logistics
Career & Self-Development
Small Business
Economics & Politics
Industries
Global Business
Concepts & Trends

To purchase personal subscriptions or corporate solutions, visit our website at www.getAbstract.com, send an email to info@getabstract.com, or call us at our US office (1-877-778-6627) or at our Swiss office
(+41-41-367-5151). getAbstract is an Internet-based knowledge rating service and publisher of book abstracts. getAbstract maintains complete editorial responsibility for all parts of this abstract. getAbstract
acknowledges the copyrights of authors and publishers. All rights reserved. No part of this abstract may be reproduced or transmitted in any form or by any means – electronic, photocopying or otherwise –
without prior written permission of getAbstract Ltd. (Switzerland).

This summary is restricted to the personal use of Osama Ali (Osama.Ali@Unilever.com) 1 of 2

LoginContext[cu=2111523,ssoId=765920,asp=2424,subs=2,free=0,lo=en,co=EG] 2016-05-16 02:13:12 CEST

getabstract

getabstract
Review
getabstract
When attempting to launch a business, entrepreneurs often formulate business plans that look great on paper but
that ultimately flop. According to Alex Osterwalder, author of Business Model Generation, many new enterprises
fail because they don’t test their ideas or consider alternatives before launch. He adroitly suggests turning to
automakers for inspiration. getAbstract believes Osterwalder’s insightful guidance offers a beacon of light to
neophyte entrepreneurs feeling their way in the dark.
getabstract
getabstract

getabstract
Summary
getabstract
Before bringing a new car to the market, automakers follow a thorough development
“Car design is a pretty process : Engineers sketch a range of ideas before constructing prototypes to analyze how
structured creative their concept machines would behave in reality. Simulations then provide performance data,
process where you have
tests…before you hit which allow designers to make modifications. Manufacturers conduct crash tests in labs and
the road. Do we have try out the car on the open road before launching the new model. Entrepreneurs can learn
crash tests in business?
Actually it’s the real
much from this structured approach. Yet few start-ups test their business models before
life: We go out there, we launching them, which is why so many new ventures fail. To heighten your chances of
crash the wall and burn success and to save money, you should incorporate the principles of car design into the
the cash, and it’s over.”
process of developing a “Business Model Canvas ,” which typically has nine components:

Don’t “stick to 1. “Customer segments” – Who are your customers?

[your] first idea, 2. “Value proposition” – What do you promise to deliver to these clients?
which is what…many
entrepreneurs do.” 3. “Channels” – Do you reach your customers online or offline, for instance?
4. “Customer relationships” – Are your interactions with your clientele automated, like
an online company, or face-to-face, like a private bank?
“The first idea is never 5. “Revenue streams” – Do you generate revenue from sales, fees or subscriptions?
the best. And if it is 6. “Key resources” – What resources does your firm need to deliver customer satisfaction?
the best…prove it by
sketching out many 7. “Key activities” – What services does your business primarily provide?
different ideas.” 8. “Key partners” – Do you collaborate with backers, investors or co-participants?
9. “Cost structure” – Once you have defined the first eight elements of your model, the
cost structure will become clear.
“Every technology,
every product, can have
5, 10, 20, 30 different Solar energy firm SunEdison offers a textbook example of the importance of testing the
business models, and
we need to take the
components of your business model. The firm initially experienced low B2B demand for
time to at least think its solar panels due to the technology’s high up-front costs. So SunEdison deployed an
through a couple of alternate pricing strategy: It offered solar energy at a fixed price for five to 10 years with no
those alternatives. If
we don’t do that, we installation costs. When the company didn’t attract investors, SunEdison raised financing by
are not serious about creating an “investment vehicle” and selling it through financial institutions. Subsequently,
creating great business
models.” the firm became the biggest solar energy provider in the United States. By sketching several
business models, prototyping each one, creating simulations and testing each model prior
to launch, entrepreneurs can alleviate risk and save money in the long run.
getabstract
getabstract

getabstract
About the Speaker
getabstract
Alex Osterwalder co-founded Strategyzer, an app that assists in designing business models.

A New Approach to Designing Business Models                                                                                                                                           getAbstract © 2015 2 of 2

This summary is restricted to the personal use of Osama Ali (Osama.Ali@Unilever.com)

LoginContext[cu=2111523,ssoId=765920,asp=2424,subs=2,free=0,lo=en,co=EG] 2016-05-16 02:13:12 CEST