Okay, we've talked through the right hand side of the Business Model Canvas, the customer-facing side. It's time to talk about the other side of the Business Model Canvas a little bit, just as an introduction before we get started. We're going to pay much less attention to this side of the Business Model Canvas in this course. In 12 weeks, it's logical to think that maybe we could find a value proposition for a customer segment, maybe we'll find product market fit. It's not logical to think that we're going to get the whole business model nailed down in 12 weeks. It may happen, but it's not likely and you don't want to lose focus, you want to pay attention to the customer base inside first. But on the other side of the business model canvas in the sectors that are numbered 6,7,8 and 9 here are these internal sides of the business. These have to work right for the business to work, but they're not as important to nail down right away. Except if they're conscious, you have to sort of nail down the main things first. The key partners is a question of what are you going to do yourself and what are you going to have other people do for you? I'm sure you've heard the term core competencies about a business. These are the things that you really do well, that you are doing that are unique that no one else is doing. The other stuff, why not have someone else do it if you can't. That's where partners come in. So the question here on the business model canvas is who are these key partners? Who are your key suppliers because they're a very important kind of partner, particularly if you're in the business of making physical goods? And what are you getting from that? And of course, you don't get without giving, so when you get something from them, what are you giving back to them? What is your relationship with those partners like? That's the key partners part of the business model canvas. Key Activities are the core competencies. Those are the things you're going to do yourself. What do you need to do? And what can you do well? You need to do manufacturing. Is manufacturing something you're going to outsource or is it something you're going to do yourself? Are you good at it? Are you great at it? Maybe that's a key activity for you. What about software development? Do you have to do that? What about securing intellectual property? Do you have to do that? Key activities are things that you must do in order for your business to be a success. Resources are what you need to get your partnerships done and what do you need to get your activities done? What do you need in the way of money? What do you need in the way of physical space? What do you need in the way of manufacturing space, office space? What geographies do you have to operate in? What do you need in terms of intellectual property? What patents do you need, what copyrights do you need? What trade secrets do you need to protect? What do you need in the way of human resources? How are you going to find the talent that you need? What are the talent groups that you need and how are you going to locate them? That's the sort of question of Key Resources. Resources, activities and partners are sort of a balancing act. They all go together. You might need a key resource, but not need or want to supply it yourself, in which case you have to find a partner who will supply it for you. So, you pin down the resources, they tell you what you need. Which of the things are going to be your core competency, those are your key activities, and you find stable partners to whom you can offer value to do the rest of the things. Finally, last but not least, is the cost structure. What are the costs of your business? This is last in the business model canvas enumeration that we're doing today, but getting a rough beat on this baby first because if you can't produce the thing profitably, you don't have a business at all. If it turns out that people are only going to pay 10 for something and it takes 20 to make it, you don't have a business. So you have to nail that down in some very broad terms before you get up very far with the business model canvas. It's a little bit akin to what happens with electricians on the work site. They're the very first to do work on the work site because everyone else needs electricity, but then they come back and finish up later. So you get a rough idea of your cost to begin with, and then you come back and finish it up later. The main points, the left-hand side of the business model has to do with how you do it. It's your internal processes. It's what you need to get the job done. What do you yourself? What do you have others do? What does it all cost? Once again, let me remind you that the business model canvass is a living document. You're going to be putting down your assumptions, you're going to be correcting them as you go along. And then at the inflection points you're going to have something that you can show to others and say, this is how my business works. Thank you.
