Business
Model Competition
SPONSORED
BY:
THE BUSINESS MODEL
COMPETITION (BMC)
Business Models are the engine of a business or
organization. They describe, usually in graphical form on one 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 will show how the business will acquire 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 the case of for-profit businesses, 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 in an
established organization requires business modeling skills as well.
After all, who is more likely to succeed in a large,
established business? An employee who requires $10 million in start-up capital
from the enterprise or the one that has three pre-launch clients who will put
up half of the needed capital and take the first six months of production? To
obtain the latter requires a sound business model that pays attention to the
marketing dimension and cost of acquiring customers.
Customers are not just nice to have but they also play a
valuable role in designing new products and services; the entrepreneur or
intrapreneur can reverse out some of the work to them and obtain a superior
product (or service) as well.
Business models may go a step further; they can portray the
entire business eco-system, which may
involve a second (or third) dimension on both the demand-side and supply-side
of the enterprise; e.g., the role that the clients’ clients and suppliers’
suppliers might play in the success of an enterprise.
Business models are a relatively new field of research and
play a key role in formulating a successful business plan. The BMC is designed
to generate interest in and research on business models and encourage
entrepreneurship and intrapreneurship on the part of
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THE BUSINESS MODEL
Business models will score well using the Business
Model Scoring Test when they tend to have the following characteristics:
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 is eligible to enter the competition
if at least half of the team members are full time students of the
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.
Finally, the entrants to the Business Model Competition are
eligible to compete in the Wesley
Nicol Business Plan Competition at the
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 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
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.
Six finalists will be selected by the
BUSINESS MODEL
COMPETITION PRIZES
There will be three prizes for the top business models:
1st place—GOLD MEDAL and $750
2ND place—SILVER MEDAL and $500
3RD place—BRONZE MEDAL and $250
4TH place, 5TH and 6TH
places—HONORABLE MENTION.
Prizes will be shared equally among team members.
Note that the gold, silver and bronze medal winners of the
Business Model Competition are automatically entered into the UOttawa Wesley
Nicol Business Plan Competition with a chance to win $6,000 for first place in
that competition.
SCHEDULE
- Submission: expression
of interest—Second Wednesday in January.
- Submission of one page
business model—First Wednesday in February.
- Final revisions—Third
Wednesday in February.
- Announcement of Six
Finalists—last day in February.
- Competition—First Wednesday
in March.
FOR MORE
INFORMATION:
Dr. Bruce M. Firestone, Entrepreneur-In-Residence, (613)
723-2222 ext 229 or bfirestone@metro-sub.com.
http://www.dramatispersonae.org/
SPONSORSHIP
OPPORTUNITIES
Benefits of Sponsorship:
- Co-Naming rights for
competition.
- Recognized donor of U Ottawa
School of Management (SOM).
- Announcement of winners
in media.
- Winning participants’
names displayed in trophy showcase at SOM.
- Mentions on SOM and
competition website.
Cost of Sponsorship:
- Three year term.
- Five co-sponsors at
$2,000 per annum (CAD).