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Lesson Info

Business Model

All right, let's, look at the business model application. First of all, what business model? So a business model is the way your business creates, delivers and exchanges value? Yes, and this is on page fifteen because I don't know why it's my fault. So your business model is the way your business creates, delivers and exchanges value. What does that mean? Well, the bit way your business creates value is again thinking of value in terms of the effect that your product has on a customer, the change that it helps them make the way they use at what it helps them accomplish. The creation is the the creation of value is the product itself, and getting it in the hands of your customer to allow them to use it delivering is the actual getting it in their hands. How is this being delivered? Am I delivering it through etc? So you know the distribution channel essentially about distributing it through at sea through ah wholesale account through my own store that's the delivering peace in this case...

, and then the exchanging pieces the actual transaction that happens, what is this? Ah, product worth what I'm charging for what's the price tag I'm putting on it, what are people willing to pay for it? So it's those three pieces of the puzzle all working together now there are more than those pieces of the puzzle when it comes to actually writing out your business model and so I'm not going to actually spend a ton of time on this. This might be a really good homework assignment for everyone, but I want to go through the whole thing, so in the workbook it looks simply like this and it's just really easy grid and I do this have just four categories for you to fill out the first is the product, and so you could do this in two seconds. Just write down the products that you have to offer and you know if you if you sell twenty different kinds of illustrations, you don't need to write down all twenty different illustrations write down illustrations by price point that's generally the easiest way to do it same thing with scarves or with anything that has a lot of variety in it. You don't have to do red scarf blue scarf, green scarf you sell a scarf for x number of dollars that's the product makes sense cool so that's the product category that's straightforward these are things you're already offering. You can also do this exercise to figure out how new products figure into your work. The next column is jobs and the jobs are the things that we talked about in the holes not drills segment there'll be the behaviors, the change that environment changes and skill thes air the things people want to stop and start something new with remember that yes re on the same page and then the market segment is who's actually buying this who individually out of your most valued customers is actually buying this why are they buying it right then that's another really good way to answer that question so for example and his most valued customer might be you know might be a whole group of moms, for instance, but the market segment for any one of her products might be the mom of a newborn or the mom who needs a gift for her son's friend on dh so that that could be the market segment it's a specific circumstances specific reason people are going to buy or what they're trying to accomplish. And then in the last category I kind of combine two things price and goal what's the price of each product and what's your goal for selling them seat the goal that's the important part too, because if you're your goal has to be so high that you can't reach that to be able to make your business work, then you need to rethink things right? And so any number any box really on this grid can be re worked to make your business model work better all right um meghan, can I pick on you actually what we what I have you come up for your hot seat now okay okay and so we'll take a look at your website and we can also kind of work through maybe one or two lines of your business model and and yeah I think that'll help everyone get through it a little easier so come on up and let's grab one of your I don't think he's here actually showed this one off earlier let's show the other one off because I love this one here throw that out there all right cool look here we are alright see uh if you scroll down yeah wait house it's really working here we go you can get a little bit further and on the right will be that little club you think like that alright, perfect thank you I want the scroll all right, do you have an itch to stitch? So, first of all let's talk about how this fits into your business models to tell us about the product so these are embroidery. This isn't a burger of the month club and it started I turned one of my illustrations just late at night into an embroidery that I did myself and everyone wanted to sew it I didn't know howto let them sew it so I learned how to create patterns and it's becoming an incredible way the leverage my work because no matter how many people join it's, no extra work for me, so it really allows people this chance to create their own artwork and get a sense of accomplishment and, you know, showing up when people come in the house and they think I made this yeah, perfect. Okay, so we've got the product is the embroidery of the month club. The job you sort of just mentioned is going allowing teaching people how to create their own art essentially just through the pattern there's no training and there's no even tutorial along with it, right? I only know how to go up and down it's the easiest wait did it? Yeah, exactly. So you've really empowered people t figure out how to create their own art themselves. So that could be what goes in your job category in and in that that's almost if you've heard the term value proposition before which I hate that phrase because what does that mean? That's what that means? So I'm just giving you any way to think about that. Tell me about the market segment who and why are buying this? You know, I honestly didn't think that they would exist within my existing market, but it is true that people have so many more hobbies and talent then you know about and so it was these people who and they loved the work, but they also are crafters themselves and so they really wanted to get their hands on something, and while they may not be able to draw, this is what they could do, so a lot of them our existing embroidery fanatics gotcha they're not beginners! And so what was the problem that they were running into that maybe embroidery of the month club so appealing to them what I kept hearing over and over again was I've never seen designs like this and that's because there's they're done in a sketching manner it's the simplest stitches but it's not a zoo I mention before it's not the designs that you did with your grandma twenty thirty, forty years ago it's very different but the stitching is such said that allow it's not intimidated yeah, but off the month that are a month when I discovered wass if you just do one put in the shop the druid really fast and they want more and I couldn't keep up on dh I have always had this passion to have ah fruit of the month membership because give the awesome and I realized I could leverage it in that way to so they just they sign up ones and it's this gift themselves that comes every month in the in their inbox and they get to sit down it's an excuse to just have me time and to sew something that allows them tio give gifts that are unique as well so right they get to improve your skill and being awesome gift giver yeah so there were so many means going on this particular product you were able tio filled people's desire to create art themselves toe have these projects to do you are also able to help them fill therein insatiable need for new pattern through this program so that's perfect for your market segment tell me about the price and what's your sales goal for this do you have like a per month goal so the price is I broke it down six months ago I broke it down because I feared the twelve months would be too much of a commitment kind of with everything you want to test the water so the twelve months is fifty dollars for the year on then the six month is thirty dollars for the year I didn't have a monthly goal I had um a year legal okay um could you tell us what that if yeah I'm not anywhere near it but the goal is to get one hundred okay? Because then I was breaking down the prices that's you know, hundred times fifty sounded like him for you a good number and helping so in a hundred people and the more people that came on it was no extra work for me right um so yes it was I do need to break it down to be a monthly gone so I think that would be much easier to plot out in terms of marketing and how to get the sales yeah it probably helps you break down the marketing for it as well yes so it's not just about you know how how am I going to get the school or how my garden number so much bigger yeah exactly. So then by breaking it down to a month's a month goal you know what I need to send out this many calls to action over the next few weeks to reach that month to month goal yes yeah I just love this can you tell us just a little tiny bit about what this is done in terms of your business model for you? Yeah it's well, it has added a tiny bit of work because I have to remember to do it every month okay for uh what you were creating patterns before? Yes. And I've gotten to the point where I have figured out that what the people value most is not my sewing ability it's my design ability so now I simply designed them I don't have to sew the original which took much longer than it would take them yeah eso in terms of um the business model it's allowed me to reach a whole new market because now I can actually approach this crafting magazines which before with illustration you don't really touch beautiful um and he's expanded your conversation yeah greatly and I meet a lot of new people who can tell me different things about different stories that I can use and different ideas such as I remember doing this one with my grandma and I've actually had people conditions they've sent me patterns that their grandma's did and that they did on dh I have actually turned it into artwork but it's been very interesting to see the response from people wow so there's so there's so much like customer perspective process goodness like embedded right in this you said you learned that what people valued was not your own sewing but with patents themselves which is hugely important to completely change the way you worked in terms of that yeah there's this there was kind of like a community element here I think as well there's this passage income element you that by focusing in on exactly what people wanted and not what you assumed they wanted, you've been able to create our restore our a a revenue stream that can scale ad infinitum right? This could you could serve ten thousand people a month the same way you shares fifty people a month yeah, which is less that's huge, right? Right. Yes um oh and it was something that I'd worked with you before and you said what have your customers? What is the smallest thing you khun d'oh that the answer to that question that they've always been asking you for? And I put a favor? Yeah on I put on my web site this level sign up if you would like to know, I didn't even know if I would get a reaction I said sign up if you'd like to know about a possible invited the month club and the inbox just flood it and I knew right then that that's what it was and it was people always been asking, but I was not listening yeah, I love it good was were there any questions that you had specifically about this product and your customer's perspective? I think I mean, you don't have to have a question, we totally just broke the whole thing down, which is awesome, you know what? Tell us where this is pertinent to this to the content marketing piece of this tell us where the embroidery club has been featured because you mentioned this, allowing you a much broader conversation and being able teo, you know, inject yourself into new media outlets tell us where this has been featured, so I there are a few, I think it's mr x stitch, which a lot of them do weird, like you instead of like the nice home sweet home it's like curse words and whatnot but it's weird enough that I can get on their wild olives sent tons of her followers because her bog is all about embroidery and she does a free club and so that was surprising to me that they would all come yeah over and pay for mine um mom calls family at a recent fair and I was getting rid of all these kids I used to sell the kids and it was the last of the line and they said you know we wantto work with you to agree revamped these and sell them fantastic so that was something I thought they only sold dresses to be oh so actually them by being able tio use your customer's perspective to revamp this product it freed you up to be able to serve ah marketplace like mod cloth which I think is another problem that people have is they get they spend too much time in the products that take up too much time that they can't do the bigger things that might make a really big difference in their bottom line and that's exactly what you were able to do at us and outsourcing and everything it's not a bad for you need to do it yeah also it's a good ways to approach it but yeah cool. Thank you. Yeah, a couple of questions for you from the internet making from heda heda who says how did you get your site in front of all these clients who are interested in your stitching patterns? And I just want to say that lots of people are thrilled with the idea of the of the month I even inspired a lot yes yeah so I will take any fruit of the month subscriptions that coming have you? How did you get clients there to your second? So a lot of it was using by existing market and simply putting out the email that like you told us the smallest possible stuff and it was simply I created a landing page and my sight that just said if you're interested in this sign up here and you'll be the first to know when it comes out, it didn't even have to come out you know, if I didn't get enough right, they would just never hear from me but the response was great enough once it once I knew it was gonna go out, I started contacting my friends who are much more crafty than me because I never let people see the back of these embroidery on and they knew you know they're networking system was other crafters, so not necessarily even people making money from their kappa just saying that they love to so and I was able to contact them and they just I wanted to feature the work or get a story it's unusual for someone so young to be creating these new patterns in an old medium, and I want to answer that to the impression I got from the question was, where did you even find the potential customers to put the landing page in front of? And I just want to say that you sent an invitation to your existing email last, right? Megan's been doing the illustration for years had been doing the embroidery kits, and so this was a new product she had and yes, that certain this is certainly easier if you've got an existing business, but any time, you know, that's what's so powerful about email marketing, and we're talking a lot about that on sunday, so make sure you're still listening for that. But yes, so she was able to use that existing email marketing list that she had to put an invitation in their inboxes, get people excited, initially test the water with that minimum viable product of a landing page and then put this all out into the world. And there's been, this has been a learning process. This wasn't like this was fully formed when you put the idea out the the messaging, the price, everything has pretty much changed from the beginning, right? Yeah, so I think that's really important, you don't need teo even use your existing list you could use those pictures that you sent up to the media and as you do, you send them to the flash map instead of getting a free product it's simply a sign up for this possibly no possible product twitted allows you to test the water and you're out no money and you out almost no time. Yes. Amen. Thank you. Yeah, I met you let's go teo linda and do another hot seat and then we'll go to final questions. Yeah, awesome. Just as we are going up way are going through her is people are wondering if you could again explain the four categories specifically the jobs and one of the job and the market segment and ella alysia but I saw a couple other people that had asked about those columns. Sure, so the job is back to what we talked about in segment three. So back to the hole's not drill segment of each job that your product does is like changing a behavior is a job changing and the environment is a job change learning a new piece skill that's a job so it's how your customer is using the product what your customer is using your product to accomplish that's what needs to go in that second column then the third column is the market segment so your m v c is a whole group of people, all those individuals that you put on your focus group that's the market that's all all those people that you're serving on a regular basis, but within that for each product, different customers have specific needs that caused them to buy specific products. So think about specific desires specific the circumstances, like birthday parties or weddings or anniversaries that caused people to go off and actually buy that product at that particular time, you know, we so your whole business has a most valued customer. It has a market that it's targeting, but within that each product generally pertains to a spa civic person, a specific reason to buy that's your market segment. Cool. Yeah. Thank you. Yeah. So, um, tell us we can get to the etc from here, actually. Okay, that link on the top of the show. Yeah, we cool goingto see? Uh, okay, never mind. So let's dio is there a particular product you want to talk about? Um, I think the braille necklaces are right over here, but oh, they're not here at c yeah, okay, let's, talk about, um, let's. Think about those stud earrings. Okay, we have mentioned before, sure, uh, which lets do these like these, I want some of these I'm sure many other people are going to want visas well this's bird of virtue dot com says lenny is business tell me how this fits into your business models to tell me about the product the job, the market segment the price sure well these I actually introduced in september of last year and they proved to be really successful they well obviously they're just wouldn't study rings um that come in an array of colors I try to match the colors to the seasons pantone's s so that it really goes with the clothing that's happening um the job let's see well the prices said they're seventeen dollars so it's a really reasonable price and it's like a really accessible prices are equal don't have to think about it and they're really cute they come on little cards and people rightful through it and they get a great kick out of looking for the right cares um so the job what are people trying to accomplish with these? I've got an idea but I want to hear from you well, I think for me the overriding thing in my business is I I prefer simplicity I mean, I wear solids and whatever I accept or stripes alex traits, but um but they're just little minimal sort of things you know, just to add like a little pop of color and to me and they're fun teo so to me this is the behavior is I want to stop going hearing list and I want to start being thrown a pair of earrings and feel good about it yeah, you know you're wearing nice big earrings today I'm wearing fairly big earrings often wear earrings that are much bigger than this but I I have mercy on the sound guys today and so these are good, you know, I would imagine really great for someone who's not used to wearing big earrings or often goes hearing list and so this is allows them to just change a super simple behavior, but it could really start them on a path of wearing more jewelry or incorporating more pops of color into their wardrobe, right? Right? Yeah, and I also I do have the studs kind of match the rest of my jewelry so my necklaces or whatnot so it can kind of being a and ensemble together we're totally going to talk about that promotion pricing tomorrow too sighting on then so the market segment sounds I think that ties in really well into the job probably the people who are buying this are people who are looking for that hearing toe wear when they would either wear nothing at all or looking for an earring toe wear because they're just starting to incorporate jewelry into their outfit well, yes and also I find a lot of that I do a lot of other designs besides that too, but um it it's usually younger people to the print which is cool tio have like another market that I'm getting into but part of the reason that I created this these was just tow have like a a starting point to get into my line because like some of my other prices you know they go up to eighty dollars and not everybody has eighty bucks too I want something so you could still get some sort of little like part of virtue laser cut yeah it's called a gateway product you're totally going to talk about that tomorrow awesome yeah thank you so much for sharing these I think we're running out of time so we'll make sure that we get to show off more of your stuff over the weekend but that was great for how that fits into your a business model. One more thing I just want to talk about like a content marketing peace with this since we've identified that the job is perhaps changing behavior around not wearing an airing versus wearing an earring I think you could probably do a whole maybe gift guide of small jewelry pieces for people who don't normally wear jewelry right? Yeah yeah or simple ways to add pops of color to your outfit so there's two concept marketing pieces for you well you're gone I totally okay so those are your three applications for the customer perspective process. Obviously, the customer perspective process is, my friend, tanya said, can change everything. You can really use everything that we've dived into today dove into today. Teo affect so many different parts of your business the way you develop new products, the way you send out e mails, the way you create block post the way you listen on facebook versus always broadcasting on facebook. Hopefully, this has given you a new way to think about at least the marketing piece of your business, if not its entirety.