CRI 400 Lecture Notes - Lecture 3: Minimum Viable Product, Value Proposition, Business Model Canvas

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CRI 400 Lecture 3
Jan 29th 2016
Canvassing
3 components
1. Entrepreneur
2. Opportunity
3. Resources
**there’s uncertainty everywhere, so do a fit and gap analysis
Biz Model: describes how your startup creates, captures, and delivers value
2 parts
1. Cost
2. Revenue
Revenue Model
- all sources of $$$
- eg. restaurant: food, condiments, catering, drinks
- Museum: gift shop, admissions, private events, donations, audio tours, membership
Break down each source by category--different drivers (something that helps you make money)
4 Key drivers:
1. New customers
2. price
3. frequency
4. average transaction size
Ex. musicians
songs: frequency 1, because people will only buy 1 (1 version), can’t change price--could find
more people and make more songs
Find people via social media or collaborate or tour or run ads
merch: could increase number of things you sell, e.g. shirts and posters and pins
Cost Model
- COGS
- Operating Costs
- **need to decrease/eliminate these costs
Managers focus on controlling costs, but entrepreneurs let costs be--they focus on making more
rather than spending less
- Exhaust revenue options, then look at costs
Business Model Canvas
- Break down parts of business, have common language between different departments
- Very operations based
- before, long lead time and inefficient
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