Business Models - Key Lecture Points

Introduction

Objective: Help attendees figure out their business model.
Importance of understanding why a business model is needed.
Agenda: Focus on absolute essence, market multiplication, sustainability.
Key concept: RSVPD model (Repeatable, Scalable, Valuable, Disruptive, Defensible).

Definition: Framework to create, deliver, and capture value sustainably.
Example from HBS: Customer value proposition, go-to-market model, technology and operations model, cash flow formula.
Focus on creating, delivering, and making money sustainably mentioned but not fully covered.

Importance of solving real, meaningful problems or addressing great opportunities.
Common reason for startup failure: Lack of meaningful value creation.
Focus on what's at the core of your value proposition (capability of really exceptional value).
Examples: Harvard University (Prestige, Education, Access), Reddit (Community, Content), Patagonia (Social Mission, Culture).

Breakthrough business models can be as impactful as technology/marketplace innovations.
Create, deliver, and sustain value to the customer in an innovative way.
Examples discussed like Netflix/Spotify (subscription model).

Participants asked to think of one essential customer need.
Group discussions to determine potential business model ideas addressing those needs.
Importance of peer feedback and learning noted.

Slippery (Product-Led Growth): Make the product easy to use and initiate, provide instant value, align with ecosystem.
Pricing and Packaging: Ex: Wistia's freemium model leading to tiered subscriptions.
Co-creation: Win-win by collaborating with communities, strategic partnerships.
Three-Ups (Update, Upgrade, Upsell): Continuous product improvement for customer retention and increased value.
Multipliers and Levers: Increasing LTV, reducing CAC, strategic distribution, and partnerships for scalability.

Initially a hardware company for scientific instruments (failed business model).
Pivot to data management with value in Cloud storage and ecosystem integration leading to success.
Importance of identifying the right core and associated multipliers/levers.

Design business models based on customer journeys and maximizing customer LTV.
Examples: Airbnb (homeowners' utilization), Salesforce (better salespeople utilization).
Participants brainstorm on core multipliers/levers beneficial for both business and customer.

Key elements: Repeatable, Scalable, Valuable, Disruptive, Defensible.
Impact on founder's bottom line through better business practices and higher valuations.
Summary of four secrets: Creating essential customer value, enhancing it through strategic practices, and sustaining through effective business models.