Lecture at Semmelweis International BioEntrepreneurship Program by Attila Berces
Business models describe the way a product or service is delivered to the customer, who the customer is, how the product creates value to the customer. The key messages of these lectures are: (1) The key question to the business model is what value do we create to the customer?, (2) Business model is more important than technology for market success, (3) The development of a business model is a process just like technology development.
King Gillette’s razor business model, (lose money on the razor and make it up on the blade) is a classic example of how the business model can determine which competing product in the same market can succeed. Another example is the Xerox photo copier, which IBM turned down to license and distribute, because in the traditional business model it would have not been viable due to its high cost. Haloid/Xerox financed a business model based on monthly rental fee plus copy charges, which made it affordable and also made it possible to try it without paying the full acquisition cost. Xerox grew this business 41% compounded for another twenty years.
In an open question to students we discuss what the business model of their favorite company is.