Key Terms
Innovation
A new idea, product, process, or change to an existing one.
Business model innovation (Markides)
An existing business fundamentally changes its model. The new model must enlarge the economic pie — attract new customer
Jobs-to-be-done theory (Christensen)
Customers "hire" a product to accomplish a specific job. Jobs have functional, social, and emotional dimensions.
Value proposition
A summary of the benefits customers can expect from a product or service. It's the intersection of your customers' probl
Best fit
Startups and early-stage ventures. Business model canvas: better fit for established businesses with a complete operatin
Sales projection formula
Target customers x Average revenue per customer = Sales projection (T x A = S)
Breakeven point
The level of operations where revenue exactly covers costs; no profit, no loss.
Fixed costs
Do not change with sales volume (rent, insurance, salaries, office supplies). Variable costs: fluctuate with sales (raw
Projected cash flow
Outlines preliminary and operating expenses plus reserves; shows whether working capital is adequate.
Balance sheet
Assets minus liabilities equals owners' equity. Breakeven point: revenue exactly covers costs; zero profit, zero loss.
Market segmentation approaches
Geography, customer attributes, product orientation.
Include
Competitive review, historical market performance, supply and demand shifts, projected growth.
Business plan
Formal long-range planning document. Competitive matrix: maps startup advantages against competitors on customer-weighte
Available Market)
Portion of TAM you can realistically serve. Social business model canvas: adds impact measures, surplus, beneficiary seg