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What is Business Model Competition?
Empresario represents a radical departure from the past and the crest of a new paradigm in entrepreneurship. Empresario is not a business plan competition. Rather than focusing on developing a robust business plan, complete with financials and slick presentations, business model competition focuses on identifying and precisely defining the assumptions of the new venture, testing those assumptions in the field, and then pivoting (changing) based on the lessons learned. It rewards entrepreneurs for
- Breaking down ideas into key business model assumptions.
- Getting outside the building and testing their assumptions with customers.
- Applying customer development and lean startup principles to nail the solution.
- Learning to pivot (change) until arrival at a customer-validated business model.
How does a Business Model differ from a traditional Business Plan?
The International Business Model Competition is about recognizing that any new venture is just a guess at a problem / solution and the only valid way to test whether those guesses are right is to “get outside the building” and start working with customers. So what exactly is the difference between a business model and a business plan?
- Outside versus Inside the Building: Most business plans are written using library research. Successful business models are achieved through talking to customers and making changes based on feedback from those conversations.
- Input versus Output Focus: The goal is to identify your assumptions and turn them into facts by getting outside the building. And when a startup has done this, the story is compelling and it is an awesome one to tell because it is based on facts. Validated learning about what customers reallywant is the stuff a business model is made of and music to the ears of potential investors.
- Lean Development versus Product Development: Apply Lean Startup principles to radically compress your development cycle and take a prototype (even if it is just a picture drawn in the late hours of the night) to jump start the learning process. Find the most creative but minimally viable product and start learning.
- Change versus Fortify: Most business plans attempt to fortify/prove the core idea with evidence. Judges of the Empresario will be looking for instances where teams learned they were wrong and made a pivot in a new and right direction. Your application should focus on the lessons learned and “pivots” made—the more the better.
- Chasing Customers versus Chasing Funding: Let’s face it, many business plans are written to raise money. Unfortunately the business plan formula doesn’t capture the answers VCs most want to see: real validation you can make a product customers want. Instead of chasing the money, chase customers. Getting into the field you will validate the model and raising money will be relatively easy.
- Launching versus Talking: Business plans often talk about what will happen in the future. Empresario is about what you learned by applying a Customer Development / Lean Startup / Nail It then Scale It process.
Business Model Development
Based on, Steve Blank’s Customer Development process, Alexander Osterwalder’s Business Model Generation book, and Nathan Furr’s Nail It then Scale It process.
- Find a Problem: Find a big customer problem worth solving and write down all your key hypotheses about the business model to solve this problem. We recommend that you use Alex Osterwalder’s Business Model Canvas as a scorecard to track your assumptions and the changes that you make.
- Nail the Pain: Get outside the building and inter-view customers face-to-face to understand the “job” customers are trying to do, their current pain, and how they solve that pain. Pivot when you discover you are wrong.
- Nail the Solution: Develop a minimum viable product prototype and get outside the building face-to-face with customers to test your vision of the solution. Pivot when you discover you are wrong. Re-peat these tests until you nail the solution.
- Nail the Go-to-Market Strategy: Get outside the building to understand the end-to-end customer buying process, the market communication infrastructure, the distribution infrastructure. Identify the leverage points.
- Nail the Business Model: Use the facts discovered to validate the revenue model for the business.
- Pivot: Throughout the process learn to change course whenever you discover you are wrong.
Business Model Canvas
How to prepare your submission?
All the teams who qualifies the first round, need to submit a documentation which must adhere to the following submission requirements:
Although there is not one format for successful submissions, we suggest that it should contain the following components:
- Title Slide: Who are you and what does the business do (pain and solution)?
- Assumption Slides: What were your initial hypotheses? Did you identify a customer problem? What were the key hypotheses about the business model? Remember some of your most important hypotheses are about customer pain and your solution to that pain.
- Action Slides: How did you test these hypotheses? What specific tests did you conduct? What did you discover? What facts were uncovered? What facts remain to be uncovered? One of the major purposes of the competition is to see if you have truly NAILED THE PAIN—but what data do you have?
- Pivot Slides: How were your initial assumptions proved right or wrong? What pivots did you make?
- Validated Business Model Slides: Diagram your business model (See Business Model canvas) and present the facts? How does the business make and deliver value? Consider the following critical points to communicate:
- Solution Slides - Explain your current solution to the customer problem. What evidence do you have of this solution (customer statements, pilot commitments, purchase orders?)
- Go-to-Market Strategy - Indicate the decision-makers and influencers of getting to a consummated sale. Share the facts and opinions you have gathered from customers that show you understand and can convincingly communicate with customers.
- Size of Market - Be able to show TAM (Total addressable Market), SAM (Serviceable Addressable Market), your target market, and your apex for entry into the market.
- Lessons Learned: Be sure to communicate the lessons learned, including pivots and failure.
- Appendices: Appendices should be included only when they support the body of the model. These additional slides need to be available for giving context and for answering questions judges might have. Because judges might not read all the material in the appendices, the body of the model must contain all information pertinent to the model.
What is a patent? How do you file a patent?
When inventors come up with a new device, the first thing they want to do is patent it. Patents are enforceable rights in a particular jurisdiction given to an inventor to exclude others from using, making or selling their invention. For a certain period of time, patent-holders are allowed to control how their inventions are used, allowing them to reap the financial rewards of their work. Patents are a palpable, legally-binding manifestation of a person's genius and innovation; they allow a person to actually own an INVENTION.
One can obtain a patent by filing a patent application in a prescribed format in any one of the four patent offices in India. Patent application will result in defining your rights over the invention and how broadly you have protected your invention. Even simple words in patent application can change your right over the scope of invention drastically. Patent attorneys or patent agents are the best people to write and draft your application. Filing an invention in India will give you a right only in India as patent right is jurisdictional in nature. One has to file patent applications in other countries wherever he/she feels the invention needs to be protected.