Turn%your%idea% into%a% Business%Model% % %

Turn%your%idea% into%a% Business%Model% % % Salvatore)Majorana) ) Is#tuto'Italiano'di'Tecnologia' Genova,%March%2012%

who am I, where do I come from, what do I do?! Trained as an Electronic Engineer! Some lab experience! Moved to large corporate (Telco)! Jumped on the New Economy, on the VC s side! Management consultant! MBA! Started a niche PE firm! Credit crunch! Fix it and move on! Technology Transfer ''''''''Is#tuto'Italiano'di'Tecnologia '' 2'

TODAY s TALK IS ABOUT YOU! your ideas, your goals ''''''''Is#tuto'Italiano'di'Tecnologia '' 3'

Are you an entrepreneurial spirit? yes no Are you constantly thinking about how to create value and build new businesses, or how to improve or transform your organization? yes no Are you trying to find innovative ways of doing business to replace old, outdated ones? yes no ''''''''Is#tuto'Italiano'di'Tecnologia '' 4'

What s between your idea and your start-up? Business Strategy idea Business Model Business Plan P&L SALES%OF%SERVICES Number'of'customers''[B] 0 Number'of'sales'[C] ''''''''''''''''''''' 0 2 Unitary'price'(Euro) '''''''''''' 350.000 350.000 ''''''''''''''''''''' 2 Number'of'test'&'tuning'Partners ''''''''''''''''''''''''' 1 1 Unitary'price'of'test'&'tuning'service'(Euro) 100.000 Total%Direct%Revenues %%%%%%%%%%%%%%%%%%%%%% : 700.000 ''''''''''''''''''''''''' ''''''''''''''''''''''''' 4 ''''''''''''''''''''''''' 6 ''''''''''''''''''''''''' 8 ''''''''''''''''''''''''' ''''''''''''''''''''''''' 4 ''''''''''''''''''''''''' 6 ''''''''''''''''''''''''' 8 '''''''''''' '''''''''''' 350.000 '''''''''''' 350.000 '''''''''''' 350.000 %%%%%%%%%%%%% %%%%%%%%%% 1.400.000 %%%%%%%%%% 2.100.000 %%%%%%%%%% 2.800.000 ''''''''''''''''''''''''' ''''''''''''''''''''' 0 ''''''''''''''''''''' 0 ''''''''''''''''''''' 0 '''''''''''' '''''''''''' 100.000 '''''''''''' 100.000 '''''''''''' 100.000 '''''''''''' 100.000 Total%test%&%tuning%service%Revenues %%%%%%%%%%%%% 100.000 %%%%%%%%%%%%% 100.000 %%%%%%%%%%%%%%%%%%%%%% : %%%%%%%%%%%%%%%%%%%%%% : %%%%%%%%%%%%%%%%%%%%%% : TOTAL'REVENUES 100.000 800.000 1.400.000 2.100.000 2.800.000 Delta'Stock '''''''''''''''''''''' < '''''''''''''''''''''' < '''''''''''''''''''''' < '''''''''''''''''''''' < '''''''''''''''''''''' < TOTAL'VALUE'OF'PRODUCTION 100.000 800.000 1.400.000 2.100.000 2.800.000 %'su'vdp 50,0% Software%Licences (10.000) (10.000) (20.000) (25.000) (27.500) Personnel (396.050) (480.585) (572.583) (601.213) (706.209) Real%Estate%rent (19.800) (20.790) (21.830) (38.202) (40.112) Cloud%Computing%Service (100.000) (150.000) (200.000) (300.000) (400.000) Utenze (48.000) (50.400) (52.920) (55.566) (58.344) 50,0% Communication%and%Advertising (5.000) (36.500) (47.750) (55.375) (58.263) Car%Rental (13.500) (13.500) (13.500) (13.500) (13.500) Legal%and%fiscal%advisors (8.000) (8.800) (9.680) (10.648) (11.713) Board%Members (10.000) (30.000) (50.000) (60.000) (70.000) TOTAL'INDIRECT'COSTS (634.350) (836.575) (1.024.263) (1.195.503) (1.421.640) Travel%and%other%expenses (24.000) (36.000) (36.000) (36.000) (36.000) Amortization EBIT %'su'vdp (534.350) (36.575) 0534% (24.400) (558.750) 0559% 05% (39.033) (75.608) 09% 375.737 27% (60.250) 315.487 23% 904.497 43% %'su'vdp 1.378.360 49% (77.758) (88.721) 826.738 39% 1.289.639 46% Fund Raising & start up 9,00% Interests%and%financial%costs 0 (18.000) (9.000) 0 0 EBT (558.750) (93.608) 306.487 826.738 1.289.639 %'su'vdp 0559% 094% 306% 827% #DIV/0! 27,50% Ires%(27,5%) 0 0 (84.284) (227.353) (354.651) 3,90% Irap%(3,90%) 0 (15.794) (34.635) (55.690) (77.838) 857.150 %'su'vdp (558.750) (109.402) 187.568 543.695 0559% 014% 13% 26% 31% ''''''''Is#tuto'Italiano'di'Tecnologia '' 5'

A business model describes the rationale of how an organization creates, delivers, and captures value Alexander Osterwalder Business models enable (new) products and technologies and help solve (entirely new) customer problems Steve Blank ''''''''Is#tuto'Italiano'di'Tecnologia '' 6'

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How do you search for the right Business Model? It is a trial-and-error process...but there are some tools that can help www.businessmodelgeneration.com % SteveBlank.com/books.html% ''''''''Is#tuto'Italiano'di'Tecnologia '' 8'

Who do you want to reach and serve? mass / niche / multi-sided market segmentation strategy diversification strategy ''''''''Is#tuto'Italiano'di'Tecnologia '' 11'

How do you create value for your customers? do your product and/or services satisfy a new need? do they have better performances? do you offer personalization? Are you cheaper? ''''''''Is#tuto'Italiano'di'Tecnologia '' 12'

How do you want to deliver to your customers? direct vs. indirect channel own vs. Partners channel Sales force / Web / flagship stores / franchising / distributors ''''''''Is#tuto'Italiano'di'Tecnologia '' 13'

How do you want to interact with your customers? personal relationship (CRM) automated relationship (IVR, self-service machines) Community ''''''''Is#tuto'Italiano'di'Tecnologia '' 14'

How do you earn money from your goods and/or services? Sell / Rent / Lease Subscription / License / Commission... ''''''''Is#tuto'Italiano'di'Tecnologia '' 15'

What do you need? people space / natural resources / highways know-how finance ''''''''Is#tuto'Italiano'di'Tecnologia '' 16'

How does it work? production R&D / quality assurance customer care after sales assistance ''''''''Is#tuto'Italiano'di'Tecnologia '' 17'

Who are those who will help you make it work? strategic suppliers consortium franchisees licensors ''''''''Is#tuto'Italiano'di'Tecnologia '' 18'

What is the relationship of costs with the whole? cost-driven vs. value-driven model fixed and variable costs scale and scope economies ''''''''Is#tuto'Italiano'di'Tecnologia '' 19'

IF you get it right......hardly it will be on your first trial!!! ''''''''Is#tuto'Italiano'di'Tecnologia '' 40'

Share ideas, ask others but......be ready to take criticism and react! ''''''''Is#tuto'Italiano'di'Tecnologia '' 41'

SWITCHING COST how easy or difficult is it for customers to switch to another company? ''''''''Is#tuto'Italiano'di'Tecnologia '' 43'

RECURRING REVENUES Is every sales a new effort or will it result in follow-up revenues and purchases? How evenly distributed are your revenues through the year? ''''''''Is#tuto'Italiano'di'Tecnologia '' 46'

EARN BEFORE YOU PAY Are you earning money before you are spending it? ''''''''Is#tuto'Italiano'di'Tecnologia '' 48'

GAME CHANGING COST STRUCTURE Is your cost structure substantially different and better than those of competitors? ''''''''Is#tuto'Italiano'di'Tecnologia '' 49'

GETTING OTHERS TO DO THE WORK How much does your business model get customers or third parties to create value for you? ''''''''Is#tuto'Italiano'di'Tecnologia '' 50'

SCALABILITY How rapidly and how easily can you grow your business model without hi[ng roadblocks (e.g. infrastructure, customer support, etc.)? ''''''''Is#tuto'Italiano'di'Tecnologia '' 55'

VIRALITY / NETWORK EFFECT How viral is your business model? How substantial are the benefits to share with others? ''''''''Is#tuto'Italiano'di'Tecnologia '' 56'

PROTECTION FROM COMPETITION How much is your business model protection you from competition? ''''''''Is#tuto'Italiano'di'Tecnologia '' 57'

Structure your business model Explore alternatives Evaluate your business model Face the market and see if it works ''''''''Is#tuto'Italiano'di'Tecnologia '' 59'

GOAL: test your market Customer Discovery: are they really interested in my product? Customer Validation: be sure you can sell in a repeatable way; Customer Creation: sustain your demand Company Building: give yourself structure but only when the market is confirmed!! ''''''''Is#tuto'Italiano'di'Tecnologia '' 60'

Things I did not tell you: Techniques for Market and customer behavior analysis (data collection, customer segmentation, ) Competitors analysis (SWOT analysis, BCG matrix, ) Business plan financials: Profit & Loss / Balance Sheet / Cash Flow How to choose your shareholders, the statute and shareholder agreements Compensation and incentives in a start-up environment ''''''''Is#tuto'Italiano'di'Tecnologia '' 62'

Remembering that I ll be dead soon is the most important tool I ve ever encountered to help me make the big choices in life. Because almost everything all external expectations, all pride, all fear of embarrassment or failure these things just fall away in the face of death, leaving only what is truly important. (Steve Jobs) Stay focused, do your homework and GOOD LUCK! ''''''''Is#tuto'Italiano'di'Tecnologia '' 63'

THANK YOU Salvatore Majorana Istituto Italiano di Tecnologia Via Morego 30 16163 Genova Tel: +39 010 71781 Cell: +39 366 6860345 salvatore.majorana@iit.it Is#tuto'Italiano'di'Tecnologia' Genova,%March%2012%