Business Model Competition

 

INTRODUCTION


Business Models are the engine of a business or organization. They describe, usually in graphical form on a single page, the relationship between customers and clients on one hand and the business and its suppliers on the other hand. They must also include an orthogonal dimension—the marketing dimension which shows how the enterprise acquires customers and clients in a cost effective manner.

Business models not only impose discipline on a for-profit enterprise but are also a useful requirement for Non-Governmental Organizations, charities, not-for-profit corporations and other types of enterprises. A business model allows the entire organization to maintain its focus on its core mission. In all cases, it gives the enterprise a greater opportunity to succeed.

Sam Palmisano, Chair of IBM, in an interview with BusinessWeek (April 3rd, 2006), put a great deal of emphasis on the importance of Business Model innovation. Mr. Palmisano is quoted in the article as saying: "...with product innovation, it's a certainty that your competition is shortly going to copy what you have done. With business-model innovation, though, if you can come up with a unique way of doing things, it's much tougher to react to."

Business models are not only essential for start-ups and established enterprises but are as useful to the intrapreneur as to the entrepreneur. Starting or managing a division or new initiative or launching a new product as its product manager in an established organization requires business modeling skills as well. After all, who is more likely to succeed/get the next promotion in a large, established business? An employee who requires $10 million in start-up capital and R&D from the enterprise or the one who has three pre-launch clients who will put up three quarters of the needed capital and take the first six months of porduction? The intrapreneur is more likely to get his or her project green lighted and also get a promotion.

To better understand business modeling, read: The Complete Business Model.

Business models need to include:


a) significant differentiated value;


b) emphasis on pre-sales and building cashflow through early acquisition of customers and clients;


c) focus on self-capitalization;


d) involve smart marketing to keep the cost of acquisition of customers and clients low;


e) reverse out some of the work to clients or suppliers*;


f) design an enterprise that creates custom products (or services) from standard inputs;


g) has a short or negative cash conversion cycle*;


h) provide an opportunity that creates more value than a JOB and can outlive the Founder of the enterprise.

(* For example, Dell's web site allows its clients to design and customize their PCs for their individual needs. Dell then builds only to order and can produce a bewildering variety of PCs and other products from standard inputs. (Interestingly, Dell has a negative cash conversion cycle—they get paid before they build anything and, indeed, they get paid before they even have any inventory on hand. Their JIT inventory system compels suppliers to provide inventory only minutes before the products are assembled by Dell and after they have been paid.))

Students are encouraged to use the online tools provided for this competition including: a) the Business Model Generator, BMG; b) the Business Model Scoring test, BMS; c) the Guerrilla Marketing test, GM.

ELIGIBILITY

Any team of up to four students is eligible to enter the competition if at least half of the team members are full time students of the University of Ottawa (either undergraduate or graduate). It is also recommended that students enter the Entrepreneurs Club Elevator Pitch competition and use the experience gained there to improve their prospects in this competition. Find more about the EP competition at: http://sites.telfer.uottawa.ca/tecde/?q=node/53.

Finally, entrants to the Business Model Competition are eligible to compete in the Wesley Nicol Business Plan Competition at the University of Ottawa. The winner of the Wesley Nicol Business Plan Competition is eligible to go on to compete in the National Finals against more than 12 other Universities in Canada. The finals are held each year in Ottawa at the Fairmont Chateau Laurier.

ENTRIES

All entries must have the following elements:

a) a one page graphical depiction of their business model;

b) a one page spreadsheet demonstrating the value proposition of the business for a single client or customer;

c) included with the above spreadsheet should be—1. an estimate of the size of the market opportunity and the rate of growth (obviously a larger, faster growing market is more likely to produce value beyond what you could obtain by simply getting a JOB); 2. goals (expressed simply as N = ?) for the business for its first three years in terms of, for example, the number of customers, the volume of sales, the volume of sales per employee or other fundamental measure of business success; 3. benchmarking your enterprise or organization against the best in the space using, for example, your sales per employee per year and comparing that to the best of breed in your industry or comparing the percentage of revenues used for good works (as opposed to administration) for a charity organization;

d) a description of the business model of not more than 400 words pointing out how your business model can—1. produce custom outputs from standard inputs; 2. become scalable; 3. takes advantage of network effects, 4. reverses out some of the work to suppliers or customers; 5. looks at how the business can become a part of the business ecosystem thereby enhancing its survivability by examining not only the relationships between the business and its customers and suppliers but the suppliers to its suppliers and the customers of its customers (at least 2 dimensions on each side of the business model); 6. creates differentiated value, controls a factor of production (labour, capital, management or land) to create a defensible concession and uses pixie dust to not only differentiate itself from the competition but deliver additional value to the client; 7. can be bootstrapped so it has a relentless focus on acquiring customers and cashflow and keeping costs down as well as keeping the founder(s) in control of the business; 8. using smart marketing or guerrilla marketing techniques to create low cost or even negative cost marketing campaigns that ensure the cost of acquiring a customer is low enough that the business can sustain itself and grow.

e) a photo of each member of the group (jpeg please) and their student status together with a brief bio of not more than 80 words for each member and including a telephone number and email address where each member may be contacted;

f) a letter stating that the University of Ottawa may use their material, their bios and their likenesses on the websites of the University of Ottawa and the BMC and in any related Media Releases and Public Relations.

The description of the Business Model should take note of and demonstrate some or all of the characteristics that are described above and in related material. A panel of judges will rank the finalists, one through six; these finalists will go on to compete for $8,000 in the University of Ottawa Wes Nicol Business Plasn Competition.

Sample Entry (2010): BadServer.ca

BUSINESS MODEL COMPETITION PRIZES

There will be three prizes for the top business models:

1^st place—GOLD MEDAL and $750

2^ND place—SILVER MEDAL and $500

3^RD place—BRONZE MEDAL and $250

4^TH place, 5^TH and 6^TH places—HONORABLE MENTION.

Prizes will be shared equally among team members.

SCHEDULE

1. Submission: expression of interest—Second Wednesday in January.
2. Submission of one page business model—First Wednesday in February.
3. Final revisions—Third Wednesday in February.
4. Announcement of Six Finalists—last day in February.
5. Competition—First Wednesday in March.

FOR MORE INFORMATION

Dr. Bruce M. Firestone, Entrepreneur-In-Residence, (613) 422-6757 ext 250 or bfirestone@partnersadvantage.ca.
www.Twitter.com/ProfBruce and www.EQJournal.org

Student Preparation

Marking Grid

http://dramatispersonae.org/EntrepreneurialistCultureFrontPage.htm

 

http://dramatispersonae.org/AssignmentsADM3396.htm

 

http://dramatispersonae.org/AssignmentsADM3396BusinessModelCompetition.htm

 

http://dramatispersonae.org/AssignmentsADM3396WesNicolBusinessPlanCompetition.htm

 

http://www.dramatispersonae.org/WesleyNicolBusinessPlanCompetition/UOttawaWesleyNicolBusinessPlanCompetition.htm

http://www.dramatispersonae.org/