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2000 ONSET Ventures

Whats Your Business
Model?

Darlene Mann
General Partner
ONSET Ventures
darlene@onset.com

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2000 ONSET Ventures
[ agenda ]
Business Model Definition
Why do they matter?
What are the components?
How is one developed?
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2000 ONSET Ventures
[ first point of confusion ]
Technology
Product
Company Business
$
$
$
$
$
$
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2000 ONSET Ventures
How do you make money?
[ business model definition ]

A system that enables a company
to grow and make money
on a sustainable basis.
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2000 ONSET Ventures
[ why do business models
matter ? ]
Provides a common language
Enables analogies, hypotheses
Acts as a road map
Ensures focus on sustainable growth
Isolates problems, transition points
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2000 ONSET Ventures
[ what makes a business
model? ]
Complex system
Four main components:
Markets & Customers
Products & Services
Channels of Distribution
Financial Engine
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2000 ONSET Ventures
[ second point of confusion ]
Market
Budget
Buyer
Problem
$
$
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2000 ONSET Ventures
[ creating a business model ]
Technology
Product
Company
Business
$
$
$
$
$
$
Market
Budget
Buyer
Problem
$
$
Opportunity
Value
Proposition
Distribution
Strategy Financial
Model
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2000 ONSET Ventures
[ business model components ]
Profile & Segmentation
Key Pain-points
Size of problem in $$s
Immediacy of problem
Location of $$s
Competition
Markets/Customers
Why & how will they buy?
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2000 ONSET Ventures
[ business model components ]
Products/Services
Whole product definition
Cost to company
Cost to customer
Value & Pricing
Add-on products
What do you offer?
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2000 ONSET Ventures
[ business model components ]
Markets/Customers Products/Services
Distribution
Channel
How do you reach them?
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2000 ONSET Ventures
[ distribution channel ]
Channel Strategy
Direct vs. Indirect
Marketing Strategy
Sales Support
Partnering
Brand & Identity
Implementation Cycles
Realistic adoption
Acceleration strategies
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2000 ONSET Ventures
[ business model components ]
Markets/
Customers
Products/
Services
Distribution
Channel
Can you make money?
Financial Engine
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2000 ONSET Ventures
[ financial engine ]
Pricing & revenue model
Sales and implementation cycles
Cost structure and margins
If VC, assess attractiveness
money and time required
comparables and exit strategies

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2000 ONSET Ventures
[ hi-tech industry examples ]
High-end enterprise software
solutions
High volume shrinkwrap applications
Internet advertising
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2000 ONSET Ventures
[ developing business models ]
Find analogies
Project and reflect
Strong use of qualitative, anecdotal
data
Constructive failure
Know when to walk away
Be determined, not discouraged!
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2000 ONSET Ventures
[ VC issues ]
What VCs look for
size of opportunity
quality of team
Valuation issues
Whats hot
Amount of risk remaining in deal
How to approach VCs
By introduction
Executive summary