Business Models Matter with Ann Miura-Ko

Ann Miura-Ko (FLOODGATE Fund co-founding partner) believes it’s the business model that matters most, rather than the business plan. A well-thought out business model that is data-driven and scenario-focused will be seriously considered.
According to Miura-Ko, models do a better job of unearthing assumptions about a company’s users, customers, pricing, demand creation, sales channels, supply chain, and overall logistics – all critical components to building a successful venture.

The Video is a cut of a speech “Entrepreneurial Thought Leaders Lecture”.

Transcript

I believe that at this stage of development the seed stage for a company, it’s the business model that matters not the business plan. So send me a 50 page business plan, I probably won’t read it. But send me a picture of your business model all the hypothesis that you have around your business model and I’ll take a really good look.

And the reason why that’s really important is that business models will enable you to understand exactly what your assumptions are and there are a lot of diagrams that we’ve put out that show what my version of business model/diagram looks like and Steve has that on his blog.

Alexander Osterwalder also has a book on business model generation and so there are different frameworks now that exist out there where you can use them to figure out what your business model looks like. The business model is then really, really important because what we have our startups do is they’ll go through each component of a business model. In my mind those would be your users, your customers, your pricing which also includes your customer lifetime, how you do customer demand creation, your sales channel, and then on the backend if your producing something or if you have inventory your whole supply chain that could all your components, design, manufacturing, and inventory warehousing.

You should have assumptions around your entire business model of how you relate to all these different entities in your ecosystem.

How do the customers view you, what’s your value proposition to them?
What’s your value proposition to the manufacturers? What’s your value proposition to the sales channel?
How do you do demand creation?
What’s the cost of customer acquisition?

These are all questions that you should be constantly thinking about. And if the dollars in are not greater than the dollars out, then you need to rethink your business model right then and there.

Ann Miura-Ko - FLOODGATE

Ann Miura-Ko is a co-founding partner at FLOODGATE, where her investment interests include innovations in ecommerce, security, and big data.

In addition to serving at FLOODGATE, Miura-Ko is a lecturer in the School of Engineering at Stanford University, where she also received her PhD focused on mathematical modeling of computer security. She teaches High-tech Entrepreneurship with Steve Blank and she is a frequent lecturer in courses such as Technology Venture Formation, High-tech Entrepreneurship, and the Mayfield Fellows Program. Many of her students have gone on to secure Angel and VC funding for their ideas.

Prior to joining FLOODGATE and her stint at Stanford, Ann worked at Charles River Ventures and McKinsey and Company.

Miura-Ko grew up in Palo Alto, California and, as a result, she was exposed at an early age to the world of start-ups, technology, and venture capital. She developed an early passion for robotics and went on to major in electrical engineering at Yale University, where she received her BS degree. For her senior project, she was part of a five-person team that designed four robots to autonomously play soccer. That team placed fourth at the second annual Robocup competition held in Paris, France in 1998.

Related Links: http://www.floodgate.com/