CEBU INSTITUTE OF TECHNOLOGY – UNIVERSITY

COLLEGE OF ENGINEERING AND ARCHITECTURE

DEPARTMENT OF INDUSTRIAL ENGINEERING

COURSEWARE

ES038-L01
TECHNOPRENEURSHIP
WEEK 4: MAY 18-23, 2020

Prepared by:

Engr. KRISTAN IAN D. CABAÑA

Instructor – ES038 L01

Summer
Academic Year 2019-2020
 ABOUT THE COURSE
Course / Section ES038 TECHNOPRENEURSHIP L01 Credit Units 3
Term Offered Summer 2020 Total Hours 54
Instructor Engr. KRISTAN IAN D. CABAŇA
Pre-Requisite/s ES034 ENGINEERING MANAGEMENT
Co-Requisite/s None

COURSE DESCRIPTION

Technopreneurship is a philosophy, a way of building a career or perspective in

life. The course covers the value of professional and life skills in entrepreneurial
thought, investment decisions, and action that students can utilize in starting
technology companies or executing R&D projects in companies as they start their
careers. The net result is a positive outlook towards wealth creation, high value
adding, and wellness in society.

COURSE LEARNING OUTCOMES

CLO1: Evaluate and define the market needs and provide solutions to key problems
CLO2: Experience the entrepreneurial process from the generation of creative ideas
Explore the feasibility and creation of a business enterprise, and experience
CLO3:
the dynamics of participating on a business team
CLO4: Create and present a business plan for a technology idea
CL05: Develop creative idea into a real product

WEEK 4 TOPIC

MODULE 4: BUSINESS MODELLING

LEARNING OUTCOMES
LO1 Identify the components of a business model and their importance.

LO2 Construct a business model canvas of a business concept.

DO VISIT & ANSWER THIS LINK:

We are serious in ensuring that you will have the ability to think on your thinking
and feeling. Having the habit of reflecting crystallizes your mind and clarifies
your emotions. It is a key skill as a future manager.

bit.ly/IE-WeeklyDigitalLearningJournal

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 PREFACE
Hello! I welcome you to this course of exploring your business
and techie mind using a wide range of tools.

“The entrepreneurial mystique? It’s not magic, it’s not mysterious

and it has nothing to do with the genes. It is a discipline. And like
any discipline, it can be learned.” -Peter Drucker

This introductory courseware is designed to introduce you to the

foundational concepts of technopreneurship, including the
definition, profile of the technopreneur, and the role of venture
creation in society. You’ll explore where technology
entrepreneurship and impact entrepreneurship align and where
they diverge, and you’ll learn proven techniques for identifying the
opportunity, assessing the opportunity, hypothesis testing and
creating a prototype.

By the end of this course, you’ll know how to test, validate and
prototype your idea, and also whether or not you fit the profile of
a technopreneur!

Tips for Studying Online:

Having the freedom to study online can be convenient, but this

might make it difficult to focus and start studying. When learning
online, you should become a self-directed learner!

Here are some great tips for you:

• Read the syllabus and course guide: all the important
information can be found here.
• Plan weekly study time ang if possible email output on time.
• Spare time for the class at least 3 times a week.
• Ask questions to your instructor (check your course locator)
• Make connections with your fellow classmates.

COURSE SYLLABUS:
https://bit.ly/TECCourseSyllabus

COURSE PLAN:
https://bit.ly/TECCoursePlan

COURSE LOCATOR:
https://bit.ly/ES038-L01-CourseLocator

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 WEEK 4 TOPIC
MODULE 4: BUSINESS MODELLING

BUSINESS MODEL
I am pretty sure you have had quite a number of light bulb moments from last week's
module. You have come up with a great business idea and are ready to start a business.

But, are you really?

Before you start a business, you need to create a business model. A business model is
the roadmap for the success of your business. And no, a business model is NOT a
business plan. A business plan can not even be made until you have created a "blueprint"
for your success with a business model.

I know this has all been confusing, but worry not, as we will be taking a closer look on
business modelling, the business model canvas and its components, and a complete
guide on how to create a business model canvas for your business idea.1

What is a BUSINESS MODEL?2

A business model is the core logic for how a firm is designed to create and capture value
for a target market. A business model expresses the core business logic of how a firm
needs to be organized, the revenue model that will enable it to make money, its activities,
and what channels and communications will be used to market its products or services.

A simple way to think of what a business really is, is to think about it in three parts:

1. Creating something that customers want to buy.

2. Identifying who and how to market to the customers.
3. The revenue model – How much does it cost to produce and market? How much
will we make? Is the business idea profitable?

A business model helps you to clearly express how the pieces of your business
come together to create a product or service that customers will buy and enable
you to make a profit.

If you can’t describe your business model clearly and efficiently, you will have a lot of
problems that result in losing effort, time and money. Clearly describing your business
model to others, such as partners, investors, consulters, employees, etc., enables you to
share your knowledge and effort simply and completely.

So, how should you describe your business model?

With the use of a Business Model Canvas.

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 THE BUSINESS MODEL CANVAS
If you think about writing all the information about your business in a document, then it’s
obviously going to require multiple pages to capture all information. If you think about
trying to get all that information you’ve just captured into your brain and play with it, then
it’s a complicated and confusing task and it’s really easy to see why people get
overwhelmed when thinking about business models.

This is where the business model canvas comes in. It gives you a way to create a pretty
clear business model using just a single sheet of paper when you want to start your
business professionally. What is great about it is that it can be used to describe any
company from the largest company in the world to a startup.

With the Business Model Canvas, you can sketch out new business ideas or
visualize existing businesses.

Why Entrepreneurs Use a Business Model Canvas3

1. Easy to understand
It can describe a business model in a single sheet of paper.

2. Focused
It removes all the unnecessary details that might have been present in a traditional
business model.

3. Flexible
It’s quick and easy to make changes to your model and sketch out new ideas.

4. Customer Focused
It forces you to think about the value you’re providing to your customers and only
then what it takes to deliver that value.

5. Shows Connections
The single page and graphical nature of the canvas shows how the different parts
of the model relate to each other. That’s something that’s hard to understand from
a traditional business plan.

6. Easy to Communicate
The canvas is so easy to understand, you’ll be able to share and explain it easily
with your team. Making it easier for them to get on board with your vision.

The Business Model

Canvas can be used in
teams as a shared
language to have better
strategic conversations or
individually as a tool to
structure your thinking.

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The Canvas: Building Blocks3,4
The business model canvas consists of 9 blocks as shown in the image below. These
blocks are used to describe any company business model.

Before we go deeper into each of these elements, there is one thing you should be aware
of. We can say that elements on the left-hand side of the business model canvas
represent costs to the business. Similarly, elements on the right-hand side of the
canvas represent revenue for the business, or they generate revenue for the business.

1. Customer Segments

In module 3, we discussed about defining your target market through market

segmentation and making buyer personas. In the customer segment block, you should
describe your target market – for whom you are creating a value. It is in this block where
you identify the different customer segments you will serve.

For example, Google serves two customer segments. It serves people who perform
searches, but it also serves advertisers.

2. Value Proposition

In the value propositions block, you will describe the group of products and services that
create value for your Customer Segment – what problems do you solve for each segment,
what needs do you satisfy. Value proposition answers the question, why will customers
buy from us.

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Common value propositions:

• Newness
• High performance
• Ability to customize
• Design
• Brand/Status
• Cost reduction
• Convenience

3. Channels

In this block, you will describe how your company communicates with customer
segments. How does the company reach its customers and deliver a value proposition?

Ask yourself, how do customers want to be reached or even how are you reaching them
right now. You can either have your own channels or you can partner with someone else
who has a channel. Your own channel includes any combination of things like stores you
own, a sales force you employ, or even your website.

Partner channels could include a multitude of options. For example, using a wholesaler,
maybe working with affiliates, or even using Google AdWords to advertise on Google.

4. Customer Relationships

The customer relationships block describes the strategies and tactics used to get, keep,
and grow customers.

Get: How do customers find out about you, and make their initial purchase decision? For
example, you could advertise through Facebook.

Keep: How do you keep customers once you’ve got them? For example, excellent
customer service might help you to keep your existing customers.

Grow: How do we get your customers to spend more. For example, you could set a
monthly newsletter strategy to keep them informed about your latest products or your
latest services.

Easiest way to define all this is to walk through the entire customer journey in detail. That
is to define how customers find out about you, how they decide whether to investigate
your product, how they buy your product, and then how they managed after they’ve made
the purchase.

5. Revenue Streams

In the revenue streams block, you will describe the cash a company generates from the
customer segment. Where does the money come from? What you’re actually trying to
figure out is what strategy you’ll use to capture the most value from your customers.

In a practical sense there’s a bunch of ways you could do this. Will customers pay a one-
time fee? Will you have a monthly subscription fee? Perhaps you give away your product
for free like Skype does and hope that some portion of your customers upgrade to your
premium product.

If your company serves more than one customer segment, the revenue must be declared
for each customer segment. Also, if your company provides more than one

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product/service, the revenue generated from each product/service should be described
separately.

6. Key Resources

The key resources block describes your most important strategic assets that are required
to make your business model work. The resources can be owned or leased by the
company, or they may be acquired.

These resources are typically a combination of:

• Physical: Buildings vehicles machines.

• Intellectual: Brands, specialist knowledge you have, patents and copyrights.
• Human: In creative industries human can be a resource.
• Financial: Lines of credit, or cash balances.

7. Key Activities

These are the most important strategic activities you must do to make your business work.
These could include promotional activities, further product research and development,
etc. Key activities should be directly related to your value proposition. If they’re not, then
something is wrong. Because, the activities that you view as being most important in your
business aren’t actually delivering any value to your customers.

8. Key Partners

The key partnerships block describes the network of suppliers and partners that support
you in running the rest of your business model blocks. In this block, you list the tasks and
activities that are important but which you’re not going to do yourself. Instead, you’ll use
suppliers and partners to make your business work.

For example, Spotify’s key activity is probably updating their platform by uploading music
from artists. However, as it doesn’t produce its own music, one of the key partnerships of
Spotify will be the deals that it strikes with the artists, record labels and publishing houses.
Without those deals, there literally wouldn’t be any music in Spotify.

9. Cost Structure

The final block of the business model canvas is cost structure. This is where we map key
activities to costs. The cost structure block describes all costs incurred to operate the
business model, such as the basic operating costs of the business, the cost to build and
make the product, the costs of using different channels, the cost to get, keep, and grow
customers, etc.

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 When describing a business model, try not to describe each block as
being isolated from the rest of your business model. While describing
each block, try to describe the impact of the blocks on each other and
how they work together to form a business model as a whole.

Here is a 2-minute video by Strategyzer

explaining the Business Model Canvas.
https://www.youtube.com/watch?v=QoAOzMTLP5s

Found in the annexes section of this courseware are the business

models of Google and Skype.

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The Business
Model Canvas
Instruction Manual5

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Materials
Canvas Template

The Business Model Canvas may be printed in a letter-size or A4 sheet of paper. It is preferred to
use a B0 sized sheet for better visualization and discussion. You may also use an online electronic
material like Google’s Jamboard or Strategyzer.

Sticky Notes

Prepare sticky notes in several colors.

Markers

Thick permanent markers are preferred to keep your ideas rough.

Six Ground Rules

In terms of time it takes to sketch a business model
canvas, there is no specific rule. For existing business
models, it could take you anywhere from 10 minutes
if you do it by yourself, up to half a day or more if
you work with a management team. And for new
business models, you want to keep you first
prototypes to a very short time, 5 minutes to sketch them out briefly or 30 minutes, and then
later on, when you know if something could really work, you can add more detail and go into it
more granularity.

Rule # 1: Avoid writing directly on the canvas.

Use sticky notes. Sticky notes will allow you to have a very tangible
conversation, a strategic conversation, by stretching out every
building block on your business model canvas.
Remember, there is no risk in doing this because you can move things
around. And when you put one up that you think shouldn't be there,
you can take it away.

Rule # 2: Don't get stuck with blah blah blah.

One of the things we see a lot is that people stand in front a business
model canvas, and they start talking about one building block they
could sketch out, another one, or what they actually need to do here

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to sketch out their entire business model. What you really want to
do is just get started. Put up the sticky notes. Now, why do you want
to get started? Because you want to have a tangible visible, concrete
conversation and there's no risk. You can move the sticky note
around or if you think something shouldn't be there and the
conversation shows that, you can always take it away.

Rule # 3: Start with any building block

Just get started. You can start with the easy one like customer
segments or with a value proposition. And if you sketch out a new
business model, same thing. It doesn't have to start with customer
segments or value proposition. You could start with key partners, for
example, if you want to build a new business model together with a
key partner. Or if you have a patent, you might to start with key
resources, and build a business model around that. Or what very
often happens is that we have to change the cost structure, reduce
the costs, start there. Or maybe you have a great channel reaching a
lot of customers, but you don't know exactly what else you could do
around that, start there and sketch out the rest of the business
model. Just get started.

Rule # 4: Neve use bullet point.

Never use bullet points. Never. Because if you use bullet points on
one sticky note, you can't move thing around. You can't use the
business model canvas as a strategic playground. What you really
want to do is to put each element as a separate sticky note so you
can move them around so you can play. Remember, this is now your
strategic playground.

Rule # 5: Avoid too much detail.

One of the things we see a lot is that people write a lot of stuff on
sticky notes. Don't do that. The right way to do it is to write as little
as possible, so use the thickest marker you can find and only use
large caps. That way you won't put lots of information on your
business model canvas on the sticky notes and you'll always be able
to process the big picture. Even better is if you use visual thinking.

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Sketch out stuff on a sticky note, make it clear of course, because
your brain processes images faster than words. And the best way to
do it is using images and words so it's crystal clear what you're talking
about and your brain can still process this very quickly, and you can
look at the big picture of an entire business model.

When it comes to granularity, a lot of people get started, they get

excited about the business model canvas, they put everything that
comes to mind, and that's the right way to do it when you start. But
at look this picture, once there's too much there, you can't
understand what the essence is of this business model. So, what you
really want to do is after having all those things up there, synthesize
it, take away those elements that don't show much of a big picture,
reorganize it so you really have a story, the story of your business
model, the big picture of what you're doing with your business.

Use different color of sticky notes to highlight certain aspects of your

business model. For example, use different color if you have two very
different customer segments in your business model with very
different jobs-to-be done (e.g. advertisers and users). Then continue
to use the same colors for the corresponding
value propositions, channels, etc.

Rule # 6: Be precise for every building block.

Be precise for every building block, but remember, without writing
too much on a sticky note. So, let’s take the example of Google.
Everybody knows they earn most money from advertising, but we
want to be more precise here. We might not want to say
"advertising", because it is too broad, but we want to say how they
really earn money, by auctioning off search items. That's still one of
the most profitable ways for Google to earn money and that's not
simply advertising, that's something very concrete that made then
very, very wealthy.

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Instructions
Getting started:
Start sketching out your business model by creating sticky notes for each one of the nine building
blocks. Some people prefer to begin with listing their customer segments or value propositions.
Others prefer starting with their key resources or key activities. It doesn’t matter. Just do it.

Add all elements relevant to your model:

Ask yourself what all the elements are that your business model requires to create, deliver, and
capture value. Create a sticky note for every single element that is important.

Check completeness and coherence:

Make sure you don’t create “orphan” elements in your business model. For example, for each
customer segment and their jobs-to-be-done you should have a corresponding value proposition.
Or, for instance, for each value proposition you should list the key resources and activities that
are required to create it. Don’t forget to use color coding.

Tell a story:
When finished sketching out your business model, try telling the story of your model one sticky
note at a time. Take all the sticky notes down and explain your business model by putting up one
sticky note after the other on a blank Canvas. This will force you to tell a coherent story element
after element.

In this video, the business model of Disney is

explained using the Business Model Canvas.
https://www.youtube.com/watch?v=Dqakc-VuKjs&t=14s

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 WEEK 4 BUSINESS MODELLING
DEADLINE:
BMC - Friday, May 22, 2020 on or before 11:59PM
PITCH DECK - Saturday, May 23, 2020 on or before 11:59PM

GENERAL DIRECTION:

1. With the same group and business idea that you have, create and layout your
BUSINESS MODEL CANVAS (BMC).
*See annexes of Week 4 Courseware for the SAMPLE TEMPLATE.
2. Upload BMC to your designated google drive folder using this:
FILENAME: 04-T1-BUSINESS MODEL CANVAS*
*T1 – Team 1, T2 – Team 2, and so on…
3. Submit your BMC on or before 11:59PM of Friday, May 22, 2020.
4. Prepare your PITCH DECK (containing all your worksheets starting Week 1) and
upload on or before 11:59PM of Saturday May 23, 2020.
*A separate instruction will be given for your midterm requirement. Use the PITCH
DECK I will be posting this weekend. Please standby.

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 END OF MODULE 4
BUSINESS MODELLING

SOURCES
1. Samantha Garner, “Why a business model is so
important?”,
http://canadianentrepreneurtraining.com/why-a-
business-model-is-so-important/
2. Gary Fox, “What Is A Business Model? Definition,
Explanation & 30+ Examples”,
https://www.garyfox.co/what-is-a-business-model/
3. Muammer Huseyinoglu, “Business Model Explained”,
https://medium.com/swlh/business-model-canvas-
explained-545434daa7cc
4. Today Founder, “How To Describe Your Business
Model”, https://todayfounder.com/how-to-describe-
your-business-model/
5. Strategyzer AG, “The Business Model Canvas
Instruction Manual”

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 ANNEXES
Google’s Business Model Canvas
Skype’s Business Model Canvas
Business Model Canvas Template
Blah-Blah-Blah Card

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