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What is the difference between Business model and strategy?

So when I help companies to adapt their business models to the current environment, as when I teach the subject of creating a Strategic Plan for the Internet, I realize that my interlocutors confuse these two terms: Business Model and Strategy. Also they confuse strategy with tactics ... but clarify these last two terms in another article. In this we are going to focus on What is the difference between business model and strategy? With these two clear concepts in mind, we can advance the conversion of our existing business more easily.

To go straight to the point and if you do not want to read the whole article, succinctly, "Business Model" refers to the logic of a company, how it operates and how it creates value for its shareholders. Instead, "Strategy" is the choice of business model with which the company will compete in their market. That is, the business model you use depends on the strategy you wish to make.

We will now develop a little more two concepts to fit you clearer:

What is a business model?

The origin of the term "business model" is found in Peter Druker in the 80s, but the term has evolved a lot the last 20 years with the emergence of internet and the need to adapt to this new business environment. An updated definition is:

"Business Model is the representation of architecture value of a business that shows how a company or organization can offer a value proposition to certain market segments, how to define the structure of the value chain is needed to provide this proposal and how it defines mechanisms capture the value that the company or organization will use to generate revenue. "

For if you do not clear:

The functions of a business model are:

  • Articulate the value proposition of the company. So, define what makes you unique offer.
  • Identify market segments that the company wants to attack.
  • Define the structure of the internal value chain that will need to deliver the value proposition and estimate the cost of maintaining the structure. That is, and with plain words, you need to deliver your value proposition and how much it will cost.
  • Define the architecture capture value and estimate the benefits you get when you capture the value. So, how do you get income and what will be.
  • What is your position on competition.

From my point of view, the best way to represent a business model is a Canvas (foot attached and link to the article picture). Although part of the competition is a little lame on Canvas and better treat a part (link at the bottom of the article on how to analyze competitors).

Business model

What is a strategy?

It is creating a plan that will take you to achieve your goals. No es el plan, son las decisiones que deberás tomar para crear el plan. Estas decisiones también incluyen en plan de contingencia, es decir, qué harás en caso de que tu competencia haga algo o algo cambie. El modelo de negocio forma parte de ese plan. O sea, primero decides cuál será tu estrategia y luego eliges el modelo de negocio que más te conviene. Lo que pasa es que muchas veces es más fácil decidir cuál será tu estrategia cuando pones sobre un papel los diferentes modelos de negocio que puedes elegir, de ahí la confusión. También ocurre que a veces, las pequeñas empresas tienen modelo de negocio, pero no siguen ninguna estrategia (esto es malo, obviamente… pero así es la realidad).

I hope I've been helpful and you now have clearer What is the difference between Business Model and Strategy.

You will find more information on these links:

  • Evolution of Business Model definitions and components that form in this article Zott, Amit and Massa: What is a business model
  • My model of how to analyze competitors on the Internet: How to analyze competitors
  • On business models and how to use them to beat your competition in this article Ramon Casadesus and Joan Ricard: business models to compete
  • Link you will find a video explaining how to use a Business Model Canvas and a form for you to download it for free the official version of the model: Business Model Canvas

If you need personalized help to adapt your business model to strategy you decide, do not hesitate to contact me.

We talk to each other.

A hug.

Have they changed the types of online business model?

Adaptation of the business model of a company over time is a key to the survival of the company factor, medium and long term. But the types of business model Internet have changed since 1992 when the first website was created to this day?

Types of business modelEverything depends on classification we use.

With an overall ranking as the "4C" Wirtz, Schilke and Ullrich (2010) (the image along these lines) observed that typologies have not changed. Businesses that were created in the late 90s and businesses created in 2018, can be classified into one of four types:

  1. Oriented business creation / selection / compilation of content (online news, blogs, youtubers, etc.)
  2. E-commerce oriented businesses close transaction whether or not (Amazon, eBay and any online store)
  3. designed to give context to information business (this is the case of Google, for example)
  4. Business oriented to provide networking services (Facebook, Linkedin, etc.).

Although there are some whose model is hybrid, such as Youtube, which in turn gives context to content, but also includes social networking features. The same could be said of Instagram if we consider more than just a social network.

On the other hand, returning to the beginning of this article, lyou must continue to adapt its business model as time passes, este es el caso por ejemplo de Amazon, que empezó en 1994 como tienda online de libros, poco a poco fue incorporando su comunidad de lectores que enriquecían las fichas de los libros, luego pasó a comercio electrónico de todo tipo de producto y finalmente combina su comercio electrónico con un marketplace. Utilizando el modelo de las “4C” parece cómo si no hubiese cambiado, pero lo cierto es que dentro de lo que los autores del “4C” consideran comercio electrónico, hay todo un mundo de subtipos de modelo de negocio… pero profundizar en este tema lo dejaremos para otro artículo.

In case you are interested in topics of the archetypes of business models, I'll leave this table under these lines is what I use in class when I explain the model of the "4C" and key success factors of each type, so as the different sources of income that can use such businesses. (Yes, it's in English ... but this class impart English).

Types of business model

I hope the information is useful to you.

Here you find the article that the authors of "4C" explain their model: “4c” Business Model Archetypes

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Kisses.

Do you really know what you want your client? Just ask!

Why is it so important to create customer value

Seguramente te has preguntado alguna vez porqué hay empresas que triunfan de forma espectacular como Google, Facebook, Amazon, Apple, Booking para citar algunas, y otras empresas que tuvieron su momento como Nokia, Sony, AOL, Yahoo, pero que hoy en día, en plena era 3.0 y entrando en la 4.0 no han sido capaces de sobrevivir o están agonizando. El mundo está cambiando de nuevo. De hecho, está siempre cambiando, pero los modelos de negocio que fueron válidos en la era 2.0, la de las redes sociales, la primera década de los años 2000, ahora no son suficientemente robustos para retener a los clientes actuales, mucho más sofisticados y conocedores de las herramientas online y de las posibilidades de internet. No tenemos más remedio que evolucionar.

The importance of generating value in the business model

In academic definitions of "What is a business model" that is found mostly an abstract concept that no one dares to define with specificity. Luckily we have Osterwalder (the same as in 2009 created the framework Canvas Business Model) that helps us clarify terms and business model defined as "the system that creates, delivers and captures value." On their website you will find more info about this model https://strategyzer.com/

So a good business model revolves around creating value and ability of the company to recover the value as billing and profit ... but how can we create value?

How do we generated value for a customer 10 years ago?

En la época del 2.0 había negocios que con solo formar parte de ellos ya se generaba valor, lo que se denominaba “las externalidades de red” (network externalities, en inglés). Eran el tipo de negocio de floreció desde 1998 hasta más o menos 2010 y que se regían por la llamada “Ley de Metcalfe” que postula que el valor de pertenecer a una comunidad incrementa al cuadrado del número de usuarios que forman parte de ella. Este es el caso de Facebook, de eBay, de todos los portales de citas, de Wallapop, y un sinfín más de negocios online. En 2004 escribí un artículo donde explicaba qué es la Ley de Metcalfe y qué es una Red de Metcalfe, si quieres leerlo lo encontrarás aquí: What is Metcalfe's Law.

The point is that in 2000 businesses operating in a network of Metcalfe are those who triumphed at that time and the value was generated by the market efficiency, the complementarity among the products offered, los lock-in’s who managed the sellers were faithful to the market and novelty posed this market. These are the keys to success SoloStocks, from Infojobs, from eMagisterTo name a few of the businesses that create from IntercomBut also the most online companies created in the early 2000s and had good life until 2010 approx.

From a time, which can be between 2008 and 2010, many businesses began to go into decline. At first it was attributed to the crisis ... wear brand ... but the truth is that the online world was changing and we were starting to get into the web 3.0: Mobile internet, pervasive, intelligent devices, augmented reality, virtual reality, big data and new business models, many of them based on e-commerce and social interaction.

How to create value in today's world?

This question has no easy answer. Each company must analyze how ... but there are several fronts on which we can create value:

In the product: making it reliable, with the exact features you need the client that is easy to use, ...

How to offer the product: a good marketing process, a good process sales, extraordinary customer service, a clear billing process, ...

How we relate to the client: resolution of incidents flawlessly, quality technical support, confidence in our company, ...

... Surely you're asking in your case you do not see clear ... read on ...

How do you know what your customers consider value?

There is a term that is becoming fashionable that is the co-creation ... How can we apply the concept of co-creation with the challenge of knowing what a customer wants? Well, by asking customers own! Something that previously would not have done that would have seemed a weakness of business or weak leadership and vision of the direction ... but now, at the customer has great power (... and knows it) makes perfect sense in the world we do participate in finding new ways to create value.

Here are some examples

LEGO - Example of co-creation of value creation product: through LEGO Ideas this company includes proposals to create new products and ensure that when the product reaches the market has accepted and at least a certain number of buyers will be with him. In addition, the person who proposed the idea gets a share of the profits and is cited in the boxes as the creator of the idea, and rewarding creativity and participation, while loyalty of users.

ALAIN AFFELOU - Example of co-creation of marketing value: This eyewear manufacturer has created Ideas4afflelou.es to propose challenges, receive new ideas and customer loyalty. The challenge today is marketing they have open and ask users how would like the "Black Friday" of Affelou this year 2018. Do you realize the change? It not that the marketing department does not have ideas, is that the ideas offered and voted by users ensure good customer orientation, while client loyalty and are innovative.

BANK SABADELL - Example of co-value creation from employees: since 2010 the Banco de Sabadell has BS Idea on the intranet of this entity, a community created by employees, regardless of position, they offer ideas for improvement to the bank's management. So far 21,000 have contributed ideas on evolution processes, product processing and new business lines.

So summarizing:

  1. The future of your company depends on your architecture value. That is, how to detect what your customers think it is worth, how you manage to generate that value and how you are able to recover as billing and profit.
  2. Forms of value creation on the internet that were valid 15 years ago, now they are no longer. We need new formulas.
  3. Do not cut and Ask your customers how think your company could generate more value for your business (if B2B) or how they think your company you might be more useful (if B2C) ... plus useful for loyalty, make this question is trendy… además de agile (toma palabreja).

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Montse.

What is the conversion rate of a website? and how to improve

He conversion ratio or a web site conversion rate is the percentage we get by dividing the number of goals met by the total number of visits to a website. So, this is the metric that measures the success of a website. English call conversion rate.

For example, if this month you've got 20 sales through your website and you had 600 visitors. Your conversion rate is 3.3% (a good conversion rate for e-commerce).

Or for example, if this month you got your users fill 100 forms asking for more information about your products and you had 1,500 hits, you have achieved a conversion ratio of 8.3% (not bad for a contact form, although it could be better).

For each type of website is a definition of conversion: get a download, a sale, a request for quote, book, newsletter registration, etc.

Why is it important to know the conversion rate of your website?

If all you are measuring how many visitors you have and do not create a funnel for various purposes, you can not improve the performance of your website. You'll spend only bring traffic to the site without realizing that instead of a funnel have a strainer that loses users everywhere ... and this is very expensive. In the long run you have serious financial problems.

There are 4 ways to increase sales of a website:

  1. Increasing the number of visits
  2. Improving the conversion
  3. Achieving an increase in the average ticket, ie getting your customers to buy more in each transaction.
  4. Increasing margins with which you work, ie, increasing prices (if your customers put up) or performing best buys (if your suppliers consenting).

The easiest is the second. If you improve the conversion rate with the same traffic, the same price and the same purchase price, you'll get better results.

How to calculate the conversion rate of your website?

The first thing you should decide is what to target or targets have your website. With this information creates a Funnel as you see along these lines and set up conversion goals in Google Analytics. Once configured you can start measuring the behavior of your users.

The next step is to start working the increase in conversion rate.

What conversion rate should have your website?

For e-commerce: Between 1% and 3%. May reach 5% to 9% if the product is very good and you're a super specialist in digital marketing. Also keep in mind the industry for which you work.

For a web contact form: Between 10% and 15%. When you do not ask money if you do not fill out a contact form is easier to obtain a good conversion, so it is normal to get up to 15% if the digital marketing is well done and really attract to your website only your target audience.

When you start, you do not normally get 0.5% but as you know your users and understanding how your business works online you improve this rate to achieve the expected results.

To help a little in determining what would be your correct ratio included this table that WordStream indicates ratios CTR by industry, ads in Adwords updated data 2018. Ojo, are not the conversion rates of the site are only ads ... but they can give you an idea of ​​the variations by type of industry.

If you want to read the whole article, you got here: conversion ratios by industry.

How to improve the conversion rate of a website?

There are many variables that affect the conversion of a website. But these are the main ones:

Download speed: If your website is slow people do not want to navigate it and go before've become. In addition Google will penalize you for being slower than normal and above will not have traffic ... so the download speed is important. Measure it on the Google tool: Google Speed ​​Test. Follow the personalized tips that will tell Google.

Usability: Make sure your users understand well what to do on your website and do not get lost along the way. Also check out what it's like sailing through a mobile. Google performs the test: Mobile optimization test and follow Google's advice if your page is not optimized.

Persuasion: verifies that your website indicate what to do and persuasive in your messages explaining what to solve the problem and how you will serve your product to the user. Segmented do so. That is, for each segment, a specific page, speaking from the point of view of the customer and vocabulary. Shows photos of your segment using your product to be reflected in them.

Transmission of trust: make sure your site is professional, with a design that reflects your brand values ​​and is user friendly. Encrypts the entire website to the user's browser indicates it is safe (used in https instead of http) And the user feels safe. If you are a member of an association or chamber of commerce, indicate also gives users peace of mind knowing that if they have a problem you can appeal to a higher entity. In the "about us" shows photos of yourself or your team generally stick up for your business conveys confidence.

Attracting well done: Obviously, if people entering your website is not your target audience can not convert them. Make sure the SEO and other techniques to attract visitors are well done.

With these 5 tips you should start increasing your conversion rate and therefore your billing.

I hope this article has been helpful.

We're going talking.

How much is my site? - Discover the 5 variables that give value to your website

Surely you've ever wondered what it's worth doing the work you are creating content for your website and struggling to attract traffic and customers.

This article aims to analyze the 5 variables that affect the value of a web, and at the same time, show you tools that can be helpful to quantify these variables.

What variables affect the value of a website?

Variables that affect the value of a site: the domain name, users of your website, market segments to which users belong, your database, your audience on social networks.

How much is a domain name?

A new domain

The market price of a new domain is between 5 € and 15 € a rule. It all depends on the domain extension you use (.com, .es, .cat, etc.). This year we have put on sale a lot of new extensions and each extension manager decides the price of the domain extension.

Search for a domain here CDmon.com the price for that domain with different extensions, if new.

Domains with words of great value

There are numerous markets where you can buy domains containing words of great value. If also the domain and the extension becomes a meaningful sentence, the value is even higher (in English call "domain hacks"). For example: www.aero.taxi is for sale at Sedo for $ 699.

Some of the major trading markets domains are:

Here you will find a tool that will search "domain hacks" related to what you want: Domain Hack

A domain with history

Typically your site already has a history, if your reputation is good, this is also payable.

To see the history of the domain, you can access: Archive.org

To know the reputation of a domain, look at: Majestic SEO

A domain with history and good reputation is worth at least 1,000 euros.

The value of your domain depend on the years you have and the Trustflow and Citationflow assign you Majestic.com

How users a website worth?

Visits to a website can make them profitable advertising and affiliate programs. To find the value of the advertising potential of your website calculates the following:

1) Number of visits. For example 100,000 visits per month.

2) Page views per user. For example 4 pages per visit (see your Google Analytics).

3) Monthly Pageviews. Current will tell you the your Google Analytics, but if what you want is to make a prediction, then multiplied visits you think you have, the pages visited per user.

With Adsense you can win 20 € per 100,000 page views (nothing fancy ... but that's how things)

With affiliate programs you'll find the Zanox (www.zanox.es), with 100,000 visits you can check about 750 € (calculated with conversion rate of 3%, 4 page views per user, and collection of 1 € per contact achieved).

So more or less, with a page of 25,000 users, generating 100,000 page views per month, you can check 770 €, per year this will be 9,240 €. The value of this type of website as this variable is calculated by multiplying 3 its annual turnover, so the page value would be: 27,720 €

Prueba la calculadora que hemos creado desde Quadrant Alfa: Cuánto vale mi web

The market segment they belong

Si tus usuarios pertenecen a un segmento de mercado que es apreciado por los anunciantes. Por ejemplo, mujeres entre 25 y 45 años interesadas en la cosmética. Entonces el precio la publicidad puede aumentar drásticamente pudiendo llegar a 20€ cada 1000 páginas vistas. Si son muy jóvenes, valdrán menos… y además como utilizan Adblock es más difícil hacerles ver publicidad.

How much is a database?

Los datos de contacto de un grupo de usuarios se pagan entre 0,45€ y 0,60€ por registro, es decir, por nombre, apellidos, email, como mínimo. Súmale 0,7€ por cada criterio de segmentación que puedas ofrecer (edad, ciudad, idioma, IP, etc.). Si consigues sacarle provecho cada mes, multiplica el valor por 12 y luego, como en el caso de la facturación por publicidad, multiplica el resultado por 3 años (la teoría es que el comprador, sin hacer nada, debería poder sacarle el mismo rendimiento que tú, los próximos 3 años).

Remember that the Data Protection Act prohibits you from selling data from your users, so this is the value if signing over the company and the data were valued as assets. You have to monetize with advertising or sponsored messages.

How much does the audience on social networks?

This is easy to calculate because you can know if you approach it from the point of view of how much it costs you to advertise on social networks and get more followers.

Twitter and Facebook, a follower cost about 1 €. So if you have 1,000 followers, your network has a value of 1,000 €. Again, segmentation or a special public can make up this price.

Con todos estos datos, puedes calcular más o menos el valor de tu sitio web. O puedes probar la calculadora que hemos creado para la ocasión: Cuánto vale mi web

Make your calculations and see the result.

Although entrepreneurial advice and eBusiness specialist teacher.

  1. A website is worth what you are willing to sell to you charge for. You have to start thinking: if I pay 1,000 € I sell it? No. If I pay € 10,000 I sell it? Maybe. If I pay 100,000 me sell it? Yes. Well wing, you have a price range. Refines and find the value you give to your website.
  2. A web worth what someone is willing to pay for it. The willingness to buy from people and businesses is not always rational. So although calculated as we have done in this article value is one, someone may be willing to pay more for it. Or less ... given the case.

The final value of your website which will consider 3 things: the asset value, the value you give it, and the value that gives a prospective buyer. I hope this article has been helpful.

We're going talking

Montse.

From 19 to July 30: Summer School for Entrepreneurs Startup

From July 19 days of the start Summer Startup School in Barcelona.

These seminars aim to foster corporate culture, motivate and energize stakeholders in self-employment and business creation, as well as helping entrepreneurs who want to improve some aspects of their projects.

My participation in Summer Startup School will be twofold: on the one hand, on Monday 19 I impart a lesson on how to create a dot com company (See key success factors and different business models, all based on my experience in creating companies within Intercom Group), And secondly, on Tuesday I will coordinate 27 Digital Marketing workshop where we will see how to perform an analysis of competition, how to conduct microsegmentation the target audience of a business and how to program actions to attract different segments of the target audience to the website of a company, then convert them into business contacts.

If you are interested in this conference, you will find more information here:

http://www.summerstartupschool.com/index.php

  • Duration: 40 hours
  • dates: 19 to July 30
  • Schedule: Monday through Friday, from 18h to 22h
  • Place: CINC (C / Llull 321-329, Barcelona)
  • Price: the subsidized 150€ (Total Course 400 €)

We talk to each other.

A hug.

How to make a good executive summary? (See examples)

These days, some of which I impart Masters in Digital Marketing classes are coming to an end and students must present their final projects Master. These projects can be in the form of research, in the form of Marketing Plan or as Business Plan. Most of my students choose the latter option. So tutorials in recent weeks are to finish finalize their projects, prepare executive summaries (Which although included at the beginning of a business plan is written at the end) and to prepare presentations to be performed before a court of the university.

During tutorials this week I realized that for many of these students perform executive Summary It is not as easy as it seems to me. So for them, I wrote this post.

What is an executive summary?

A executive Summary It is a document provided as an appendix of a business plan that aims to summarize in a two-page, our business plan.

This document is the one that will give our potential investors in a first contact. We never deliver our business plan directly for two reasons:

  1. Because our potential investor does not know if you're interested or not our business, and therefore do not want to read a document that can have more than 100 pages (you'll want most, spend 5 minutes to listen).
  2. Because we do not know our future investor (... could be a future competitor) and we're not delivering our business plan to anyone.

How can you make an executive summary easily?

The easiest and most effective way (or at least this is my opinion based on my experience) to make good executive Summary It is putting it in the form of FAQs (Frequently Asked Questions), ie, in the form of questions that may arise our potential investors and we will look to respond in three lines max per question.

What questions poses a potential investor?

These are some of the questions that our executive SummaryAt least, should respond:

  1. What problems have you encountered?
  2. What is the project about? (How will you fix the problem?)
  3. Where is the business? (How do you earn money?)
  4. How much money is needed to create it?
  5. How long it will reach breakeven (or neutral, or break even.. depending on where the investor is)? and What economic results will be obtained?
  6. What equipment is carried out?
  7. Why do you think you will succeed?

These same questions are surely the court to hear our final Master thesis will also consider well worth the students to take well prepared and be able to answer without hesitation.

In this video I explain how.

To see an example of Executive Summary including the questions, click here: Example executive summary

To see an example of Executive Summary written up no questions included, click here: Example executive summary 2

Both examples are both perfectly valid to present to a court of projects to present to potential investors.

I hope I have been helpful.

We talk to each other.

SoloStocks celebrates 10 years

Last January 27 took place in Intercom 10 years SoloStocks. Although as indicated by its current CEO Philipp Gavaldà, the date is not exactly this since there was a name change through and there was also a small corporate change.

The actual chronology was roughly as follows:

  • First half of 1999 functional analysis is performed to create a market place for buying and selling wholesale products.
  • Second half of the 1999 program implementation and design of the corporate image is performed. Digital Commerce is, S.A. the company that will manage the portal.
  • We put online in December 1999 the first version of Infostocks.net and started looking for content. The first 100 stocks believe were achieved in February. It was incredibly hard, since no one wanted to put products into an empty market. We got it based on acts of faith of friends & family. It was also hard because many companies still did not use the email and the Web as tools to generate business.
  • March 2000 Infostocks.net name is left (passing as Infojobs.net, we did not have the .com domain), so we decided to change the name ... (Infojobs chose to buy the .com when I had enough money to do so) and we become SoloStocks.com.
  • We started to grow and the market began to be self-feeding. I had the pleasure and the honor of leading this company during its first 4 years.

The market place has lasted more than 10 years online, and the times, this is quite an achievement. In addition, we must conclude that it does in full power, constantly growing and developing new markets.

Currently, SoloStocks has 400,000 active compounds (ie, that are on sale at this time), more than 1 million registered users and over 5 million unique visitors per month. It is the largest B2B marketplace in Spain, both registered as visits to your website business. Quite an achievement !!

Internationally, SoloStocks has a presence in 12 countries: Spain, Germany, France, Italy, Morocco, Poland, Portugal, Argentina, Brazil, Chile, Colombia and Mexico. And continues to expand throughout Latin America to become the largest Spanish-language B2B market.10 years SoloStocks

So there is much to celebrate, there will be organized a great party and that we should celebrate these 10 years all together.

The party took place at the offices of Intercom in Sant Cugat and we met a lot of people. I took a visit to greet old friends, catch up on their new achievements and as always in these cases, ask for one and all for absent members ... so that somehow it was a celebration a little nostalgic, but no less interesting and fun.

The attached image is a photograph I took at the end of the celebration.

I hope that within 10 years we can celebrate together again and again!

A big hug.