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Business Models

Jeff Cutuli
Executive, Engineer, Entrepreneur, Consultant, Adviser, Executive Coach, Lean Startup
Mentor

SV Startup Cup
LAUNCH, UC Haas School of Business
Spartups
Clean Tech Open Accelerator
NSF i-Corps

LinkedIn.com/in/JeffCutuli

May 26, 2015


Jeff Cutuli Business Models SCC Small Business Summit

Business Models
Objectives:

What is a Business Model?

How Startups use Business Models

Various Business Models and Similarities

Business Model skill requirements


Customer Development Process
Jeff Cutuli
2nd Annual Santa Clara
County Small Business
Summit
May 26, 2015
Jeff Cutuli Business Models SCC Small Business Summit

What is Business Model?

Is it something that
you play with
Jeff Cutuli Business Models SCC Small Business
Summit

a Puzzle that requires time and patience


to assemble and has lots of interconnecting
pieces

Jeff Cutuli Business Models SCC Small Business Summit

or a complex Process, which


requires testing, measurement and
control, with many steps?

Jeff Cutuli Business Models SCC Small Business


Summit

Play Thing, Puzzle, Process are all truebut


really

A Business Model is a

Tool
Enabling entrepreneurs to
discover, create, deliver, capture value
Launch Startups & Accelerate Growth

Jeff Cutuli Business Models SCC Small Business


Summit

How Startups use Business Models

The Goal of a Startup is NOT to be a Startup


Lean and Temporary organization
Searching for Truth

Discover
Find the Problem before the Solution
Seek guidance from experts

Create and Validate a Business Model


Product-Market Fit
Repeatable
Scalable

Deliver & Capture Value


Learning and Doing
Build team
Partnerships

Jeff Cutuli Business Models SCC Small Business


Summit

Several Business Models

Alex Osterwalder: Business Model Canvass

Rob Fitzpatrick: Startup Canvas

Ash Maurya: Lean Canvas

Sean Griffin: Startup Cup Model

EntrepreneursSeek Guidance
from Mentors, Coaches, and Teachers

Jeff Cutuli Business Models SCC Small Business


Summit

Alex Osterwalder:
Business Model Canvas

Jeff Cutuli Business Models SCC Small Business


Summit

Rob Fitzpatrick: Startup Canvas

Jeff Cutuli Business Models SCC Small Business Summit

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Ash Maurya: Lean Canvas

Jeff Cutuli Business Models SCC Small Business Summit

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Sean Griffin: Startup Cup


Model

Jeff Cutuli Business Models SCC Small Business


Summit

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Business Model Similarities


Evidence-Based
Tools

Test Assumptions
Get Lots of Data
Feedback Loop
Diagnose Pain
Differentiate Your Claim
Demonstrate Gain
Deliver the Value

Jeff Cutuli Business Models SCC Small Business


Summit

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Business Model Similarities


1. Problem

4. Revenue Streams

Be Specific

5. Cost Structure

Wheres the Pain

6. Team

2. Customer

Niche / Individual

3. Value Proposition
Product-Market Fit
Solution
Customer Acquisition
Unfair Advantage

Core Competence
Key Activities
Human & Capital
Resources
Partnerships
Advisors, Mentors,
Coaches

Jeff Cutuli Business Models SCC Small Business


Summit

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Business Model Tools


Require Customer
Development
Skills

Jeff Cutuli Business Models SCC Small Business Summit

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What is Customer
Development?
Find early customers and confirm their intent to buy
(without biasing them) before building everything.
Rob Fitzpatrick The Mom Test

You cant guess how your product is valued by customers


Customer Development allows you to discover the
economics needed for value pricing your product.
Steve Blank The Four Steps to the Epiphany

Its a Learning Process


Jeff Cutuli Business Models SCC Small Business
Summit

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Customer Development Learning


Process
Steve Blankss Customer Development Process:
Search and Test Assumptions before Executing

BUSINES
S MODEL

TEST
Assumptions
n >30

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Wanted: Customer Development


Skills

No GuessingTest Assumptions

Curiosity

Active Listening

Unbiased Questioning

Discipline

Collect Statistically Valid and


Significant Data

Analyze the Data

Act on the Data

Rinse and Repeat

Jeff Cutuli Business Models SCC Small Business Summit

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Take Aways

Business Models are Tools for Startups


Discover, Create, Deliver & Capture Value
Quantify the Problem before Solution

Business Models require Skills


Customer Development Process
Show me the Evidence!

Business Models expedite the Learning


Challenge our assumptions and thinking
Learn with help from mentors, teachers, customers
Learn by doing at a Business Model Competition

Several Business Models and Competitions


No excuses. Just pick one and Go!
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Summit

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Final Thoughts:
"There are more ways than one to skin a
cat
so are there more ways than one of
digging
for money.
Seba Smith - The Money Diggers, 1840

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Its normal to resist change. Business Models give


entrepreneurs a better way to discover, validate and
exploit business opportunities.

Jeff Cutuli Business Models SCC Small Business


Summit

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Dont let this happen to


you!

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References:
Blank, Steve; The Startup Owner's Manual: The StepBy-Step Guide for Building a Great Company; K & S
Ranch; 1st Ed.
Blank, Steve; The Four Steps to the Epiphany; K & S
Ranch; 1st Ed.
Croll, Alistair, and Yoskovitz, Benjamin; Lean Analytics:
Use Data to Build a Better Startup Faster; O'Reilly
Media; 1st Ed.
Fitzpatrick, Rob; The Mom Test: How to talk to
customers & learn if your business is a good idea
when everyone is lying to you; Create Space
Independent Publishing Platform; 1st Ed.
Osterwalder, Alex; Business Model Generation: A
Handbook for Visionaries, Game Changers, and
Challengers; Wiley & Sons; 1st Ed.
Osterwalder, Alex; Value Proposition Design: How to
Jeff Cutuli Business
Models SCC Small
Business
Create Products and Services
Customers
Want;
st

Summit

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Questions?
LinkedIn.com/in/JeffCutuli

May 26, 2015


Jeff Cutuli Business Models SCC Small Business
Summit

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