Page 114 - Transforming an Idea Into a Business with Design Thinking

S tage 3: Craft Business to Know Viability ◾ 93

proposition doesn’t work out, the whole business model collapses. The
value proposition could also be considered as the foundation of any busi-
ness model.

There are six key components to a business model.

◾◾ Value Proposition. The first component that we have been discussing so
far focuses on understanding what problem is being solved, for whom
and why it is worth solving.

◾◾ Value Delivery. How will the customer know about the product or
service being offered, and how will the value be delivered to the
customer?

◾◾ Value Creation. How will you build the product or service and what
capabilities are needed to build the solution?

◾◾ Value Partnering. Who do you need to rely upon throughout the value
chain? Who are the external players you need to partner with in this
endeavor, and why would they want to partner with you?

◾◾ Value Capture. How will you generate revenue from customers? Who
will pay for your solution? How much will you charge?

◾◾ Value Funding. From where will you get the funding to support your
venture through the early stages and scaling aspects? (Figure 5.6).

Although any sequence could be followed to complete the Business
Model Map, a logical sequence would be the following sequence:

◾◾ Value Proposition
◾◾ Value Delivery
◾◾ Value Creation
◾◾ Value Partnering
◾◾ Value Capture
◾◾ Value Funding

5.3.1 Value Proposition

You must have realized by now that from the start of this book until now,
the key focus has been to understand the value proposition to the custom-
ers – the inner circle of the map. Value proposition essentially answers the
question: “WHY is the venture worth doing and whether the problem is
worth solving for the key customer segment?” In this section, I’ll be giving
guidelines on the remaining five components of the Business Model Map.