 Hi everyone, welcome to today's product school webinar. The topic for today is leverage. The business model is part of a product manager's toolbox. Before we start, I'd like to quote Salesforce evangelist, Vale of Shar. The difference between market takers and market makers is in product innovation. It is business model innovation. So as you walk through the slide and discuss the role that business models play in the lives of product managers, I'd like you to think about your past experience with business models and how you would like to implement what the dynamics of your business models are into your day-to-day lives as a product manager. So with that said, let's get started. My name is Michael Rosales. I am an MBA. I'm a certified scrum product owner. I am also a certified product innovation professional from Spark Engine. And I am also a certified scrum master. I am a 10 plus year digital product leader and business strategist. I have my contact information on screen for you. I'd love for us to connect. If you'd like, my email address is listed there and also my name profile. This would be available for the deck. So please feel free to reach out to me. A little bit about me. As I mentioned from the outset, I am an experienced innovative user center and entrepreneur product leader, thinker and business strategist with digital DNA leveraging 10 plus years of product management experience. Specifically in managing the ideation, development, launch and scaling of digital products for organizations in multiple industries, utilizing various business models as well as building and implementing product management operational models to continuously capture and deliver value. As we think about business models and again the role they play in the lives of product managers at the center of it is the value exchange. What activities and organization performs to continuously deliver value and as our audience and our customers and our end users, they're constantly seeking to capture the value that they need for whatever tasks they need to accomplish and whatever work they need to get done. Some notable organizations that I've worked with in the past and the president also include Blue Cross, Blue Shield of Massachusetts, Nike Inc, City National Bank, Ingram Micro, Avery Products Corporation, Honda of North America and Core Logic. And every organization that I've worked with the level of my interaction with the product model has either been at the forefront or it's been obvious what's been clear or it's been active in my day-to-day product management activities and sometimes it just lays in the background. But in every role that I've played in, every role that I've worked in, the business model plays a role in how I go about doing my work as a product manager. You'll see also as we discussed the contents, the content of the webinar, you'll also see and get a clear picture of how exactly business models or even if you don't know it in our day-to-day lives as product managers. Let's talk a little bit about the business model itself. A business model describes a rationale of how an organization creates, delivers and captures value, that is the word value again. It can be described in nine building blocks which include customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships and cost structure. The source of this was a strategizer. In our current economy, which is more and more driven within digital ecosystems, the impact, scale, reach and speed that business models are shaping and transforming industries and market landscape is parallel to how emerging and foundational technologies that spread up the need for digital transformation. Digital transformation where business models are in the center of. Value is created by helping people get jobs done, meet their needs and gracefully turn problems into solutions in the form of products and services. As product and business leaders, we are serious about innovating by innovation and optimizing the value exchange between our organization and the market. We need to take on the challenge of the business models, excuse me, we need to take the challenge of the role that business models play in innovation and update any outdated models. A viable, effective and dynamic business model that is reflective of an organization's technology and business strategy is no longer a nice to have, but as we say in the product space, it's a must have. Our takeaways and learning outcomes for today's webinar are two, one, get a deeper understanding of the purpose of business model, of a business model from a product manager's point of view. Two, to learn how the organization's business model fits into the product operations and the ways of working for a PM. And lastly, how to continuously deliver and capture value by keeping the business model top of mind. The webinar deck is organized by the following chapters, chapter one, the product manager and the business model. Two, the impact and relationship between the business model, product operations, product ops and the product manager. And chapter three is connecting the business model to a product manager's day-to-day work. Let's dig into it. Chapter one, the product manager and the business model. We'll be covering such topics as who are we as product managers and what is expected of us, types of product managers, what is a business model and its purpose, and most notable and utilized types of business models. Who are we as product managers, what is expected of us? Product management is a dynamic, complex and multifaceted business discipline and organizational function where business, technology and user experience UX intersect. As you will see in this diagram here, we live as product managers and digital leaders. We live within these three realms and we're constantly tapping into those areas, working with cross-functional teams to make sure that the value that is created and delivered right in the center, right in that sweet spot where you see product management is as optimized as possible. And again, based on what our business model is and how we're driven to continuously scale product market, product market fits and continuously capture value from our market. We spoke a little bit about value and the value exchange. I like to dive into that a little bit more. At our core as product managers with digital DNA, we are digital business leaders, evangelists, thought leaders, outcome driven, customer obsessed and orchestrators of cross-functional teams to create and capture value for business via products and services also known as a value exchange. We continuously translate and activate the organization's vision by strategically driving product ideations to launch in all of the functions, all of the product functions in between and the continual support and improvement of our businesses, products and services. As product managers, we are responsible, ultimately responsible and accountable for defining and articulating the what, who, where, why and when of products while we view the world as our business model of colored glasses. Types of products, types of product managers in the source here is product school. There are many titles that product managers hold but the most common goal regardless of the title is that we thrive in our tasks to efficiently design, build and deliver value to market and maximize the value exchange. PMs work in various industries, markets, businesses operating with various business models, selling unique products and services and within cross-functional teams that implement their own version of an agile framework. Scrum, Kanban, Lean Extreme, Program EXP featured the driven development dynamic systems development method, et cetera, to name a few. Some of the product manager titles that we've all heard of and maybe having some point of our lives actually been functioning as our role include a product manager. The most common and known progression of a PM role is to start off an associate, move up to product manager, senior manager, senior product manager, lead a group or principal, director, VP and ultimately a CPO, sort of a chief product officer. Product owner, technical product manager, data analytics, product manager, growth product manager and in some cases profit and loss product manager. This is obviously not the whole exhaustive list but it provides you a little bit of idea of how our role can be called many different things and how we might function as product leaders in an organization with a different operating title. The business model and the dynamics that it produces is at the center of a PM's toolbox as we seek to capture the hearts, minds and wallets of our users and customers. Depending on the expectations of your role as a PM and to an extent the business units that you engage and partner with, you will have very exposure and impact to said dynamics of a business model. What is a business model and its purpose? The business model is defined as a structural framework for building blocks and interdependence, fluid and dynamic dimensions for an organization to deliver on its product value propositions that optimize the value exchange. As PM's, we live and work in that value zone as we work with teams to ideate, design and build products that meet and continuously scale product market fits. Speaking of product market fit, a product market fit and the product manager. I hope that at some point you have seen this diagram. This is an example of a product market fit pyramid. And to define it a little bit, let's just discuss it. The product market fit, specifically for this topic, according to Lean Startup and Company, product market fit pyramid is an actionable model that defines product market fit using five key components. In this hierarchical model, each component is a layer of the pyramid and is directly related to the levels above and below. From bottom to top, the five layers of the product market fit pyramid are your target customer, your customers underserved needs, your value proposition, your feature set and your user experience. As we go on with the webinar, please reference this pyramid and think a little bit about how it fits into the business model and how it fits into the day-to-day product activities that as product managers we conduct. If you think about the feature set, you think about working with UX to figure out exactly what problems we're trying to solve for our user community and stakeholders. Then we think about how that fits into the value proposition that the organization or at the product level have been set to meet said needs and actually meet the obligation of the value proposition that we promised to our users, to our customer as users in the market. Most notable and utilized types of business models sourced to this was digital transformation expert Benjamin Tallinn. We'll start with free model. This is an ad supported model that is one that makes use of and is supported by ads from platforms like Google and Facebook which we're all familiar with. Premium model, this model is commonly used and allows users to get free access to a basic version of the product. This version may be somewhat limited but the user has the option to upgrade and pay for a premium version should they want additional features. I'm sure we've all come across these products where we get a free version of something and we realize that it doesn't meet our needs. So there's a need for us to upgrade. That is exactly what the organization and the product manager behind the wall there is hoping that we do. The on demand model, this model refers to the virtual product service such as online video stores like Amazon Prime Video or Apple TV. We used to watch a video for a certain amount of time and the most common model which we've all utilized in some points in our lives I would assume is an e-commerce model. This is the buying and selling of goods and services or the transmitting of funds or data over an electronic network. I would like to point out the six types of traditional e-commerce models they include business to consumer or B2C, business to business, B2B, consumer to business, C2B, consumer to consumer, C2C and business to business to consumer, B2B to C. Next is the marketplace model. This refers to a two-sided marketplace where sellers and buyers use a third party platform to buy, trade and sell goods and services as if this includes Amazon and Uber. Digital platform ecosystem model, this model is one of the most complex, scalable and robust digital business structure that leverages emerging technologies such as big data, AI and IOT to name a few. These include Alibaba, Amazon, Apple, Google, Tesla, Uber and Meta. The sharing model access over ownership model. The digital economy opened the door to the shared economy. This model enables an end user to pay for a product or service for a specified time without the need of ownership, a very popular business model. I would say that really has spawned a lot of these startups and a lot of the unicorns that we see out there that are providing that service for users that need a service or need a product but don't necessarily want to take on the responsibility and the cost of that ownership. The experience model, to adding value to goods and services using digital technologies, an example that is Tesla. The subscription model, this model's main component is having a customer pay a recurring price at a regular and scheduled interval for access to a product or service. An example of this is Netflix and Dora. The open source model, this model is an open source community and collaborative project to develop and continuously work to improve open source software. Lastly is generating hidden revenue model. This model is based on end driven by revenue that is generated where the user or customer is the product itself. Moving on to chapter two, in this chapter we will cover the impact and relationship between the product model, product operations, product ops and the product manager. We will cover what is product operations, product ops, role of business model and product ops and lastly, how does the PM product manager impact and influence the business model? What is product operations? As the product management operations organization that evolves, it has put the product or service at the center of the value exchange. The product has become the business and this is further evidence of the presence of scaling rise of product led growth. I encourage everyone watching this webinar to, if they haven't already, to do some research on the emergence of product debt growth and how popular it is now to have products actually lead the business and how the business model that product is at the center of not only just the product portfolio, but of the organization as a whole. Pendle.io defines product operations as an operational function that optimizes the intersection of product, engineering and customer success. It supports the R&D team and their go-to-market counterparts to improve alignment, communication and processes around the product. Again, the product is at the center of the business itself. Role of business models and product ops as a business model defines a structural framework, building blocks and interdependent dynamic dimensions for organization to deliver on as product value propositions, a value exchange. The product model defines and sets the plan, processes and mechanisms of how an organization will optimize the value exchange by aligning cross-functional teams within the organization for a single purpose. Think about the vision. Businesses and product cross-functional teams are becoming more product-driven and embracing a customer-focused product operating model. Product ops has become connected from the top and integrated into all, excuse me, integrated into and across all functions and operations centered around product teams delivering value for customers. The product ops model ultimately merges the why strategy and the how, the process, which is governed by the dynamic elements of the business model, which is guided by, who is the customer? What are the value propositions? What are the revenue streams? What are the channels and touchpoints? How do we manage customer relationships? Who are our key partners? What are our key activities? What are our key resources? And what is our cost structure? How does the PM impact and influence the business model? The principal purpose of a business in any economy and society at large is to create and provide goods and services that meet the wants and needs of its population. Depending on the model, it may or may not operate properly. The role of the PM has been described in several ways, which I'm sure some of you have already heard of and actually might reference yourself as such. The CEO of the product, the glue between all the business functions that delivers a product that users want, the person accountable for what the product does, how it performs and what it means for the business's bottom line, the product manager ultimately influences and decides the work that cross-functional teams invest time, invest time in, which literally cuts across all the dynamic elements listed previous customer value propositions, revenue, our partners, et cetera. Understanding and embracing the challenges and factors that impact and influence the business model provide guidance to how a PM distributes hers of her time, effort and resources to each functions around the who, the student on the what, who, when, where and why of product management. Chapter three, connecting the business model to a PM's day-to-day work. We'll cover the seven phases of business model innovation plus two, dimensions of a business model and how it impacts the work of a product manager. The seven phases of business model innovation plus two, the source here is business model generation written by Alexander Osterwalder and Yves Tenure. A PM will interact, engage with and collaborate with various business people in an organization, all holding various and distinct responsibilities will still share the same goal, which is to perform key activities, make informed and sound decisions and work within a team structure to help business actualize its vision. Products help deliver and execute against that vision. The seven phases of business model innovation as depicted by the business model generation resource includes senior executive, their focus is to establish a new business model in an old industry. The entrepreneur, the focus here is to help exploit the latest technological developments with the right business model. The entrepreneur, the focus is addresses unsatisfied marketing customer needs and builds businesses around them. The investor, the focus here is to invest in companies with the most competitive business models. The consultant with the focus being to help clients question their business models and envision and build new ones. The designer and the focus is to find a business model to launch an innovative product. Next, the conscientious entrepreneur, the focus here is to bring about social and economic change to innovative business models. Number eight is the engineer. The engineer focuses on the design and development of computer hardware and software systems. And lastly is the ninth. The focus for a product manager is to lead a cross-functional team in various product ops activities aimed to reach business objectives for a product to continuously deliver and capture value. As you notice in the title, we have the seven phases of BM plus two. I thought that the picture was a little bit incomplete here so I added two more phases to what we know as being the seven phases of business innovation, I'm sorry, business model innovation. The engineer and the product manager obviously play a key role in delivering those innovative products to brands. The product manager as an orchestrator, the source here with Rahul Abanyankar. You can see here as PMs we serve as orchestrators as such for a symphony trying to deliver valuable music, if you will. And it pretty much starts with understanding what the value we're trying to create. And this is really centered around what problems we're trying to solve, working with our cross-functional teams to create that value, working with various business units to capture that value. Again, working with another cross-functional team to communicate that value and ultimately deliver. So you see it's a never-ending cycle that is non-linear and is constantly in motion. So as product managers, we sit right in the middle of it and we orchestrate those activities, which I think is the most fun and most exciting part of our jobs is here. Nine elements of the business model canvas. Referencing the business model generation canvas, the canvas provides a matrix of nine essential building blocks and areas of focus to build an implementable plan and overall business strategy to be successful in ever-changing competitive last team. How does each element impact the work of product management? Let's start with the first, which is customer segments. When we think about what customer segments, what role they play in our business model and to the extent of what role the understanding of customer segments play in our day-to-day lives as product managers, we're constantly thinking about who is going to use this product to service and who we're going to deliver value to and solve problems for. How will their needs change as a market evolves and potential alternatives to our products are created? How will we respond? So we're constantly thinking about, again, who we're trying to solve problems for and who else in the competitive landscape is trying to do the same thing we are and more than likely trying to do it better at a lower cost and a higher profit to them. Next is product value propositions. What is the value that will be delivered to the customer? How will this make their lives and work better? So again, those value propositions are at the center of how we think we're going to be able to differentiate ourselves, differentiate our products from market substitutes and alternatives. Next is revenue streams. How will the company make money from this product or services? What will be the revenue model, pricing strategy and revenue, what will be the price strategy and what will be the revenue model as well? So we think about how we're going to price our product and services. What model are we going to implement when it comes to if we decide to create a freemium model or subscription? So when we think about revenue, how are we going to have our products and services make money? Understanding this component of the business model is key. Next is channels. How will the product service be sold and distributed? How will the target customer find you? What are the touch points? This is key to how we're going to deliver the value that we've created and how is our targeted audience going to capture this value? In this particular elements of the business model, a lot of communication with our marketing team. If you're in a startup, you may be the marketing team. If you're in a more established enterprise or organization, this would be probably a unit of cross-functional team, a team-age that you work with. Customer relationships. What is success and support strategy for new and existing customers? What is the plan to feasibly capture and retain customers? This is a very integral element of the business model itself, because we as product managers, we operate under establishing solid and valuable relationships. So having this element in our business model, having this element that is part of our business model be a part of our everyday thinking is key as product managers, again, to understand who our customers are and to keep that trust and relationships strong between our organization and our customer base. Key partners. Who are the key partners and suppliers that we need to create and maintain relationships with as part of our business strategy? What is the resource exchange with them? So when we think about the partners that we are in business with, we could be third party vendors, how do we work with them to augment and assist us in making the total experience and complete product experience of our product and services as valuable and as profitable and sought after in the market as we would like it to be based again on our vision and what our business strategy is. What are the key activities? What are the essential and key activities that must be reflected in our operations and processes to optimize that value exchange? Key resources. What are the key resources? People, materials, data, tools, finances, et cetera that we need to develop and manage to deliver our value propositions. What is our cost structure? What is our system to manage the fixed and variable costs to running the business financially responsible? Are we cost driven or value driven? So if you think a little bit about these elements again and how they fit in when we work in our day to day function as product managers, we're constantly thinking about, again, what we're trying to solve for and how that translates into valuable products and services. And all of these nine elements play a key in how we communicate what the value is of our product and services to our targeted audience and stakeholders. So if you think about, again, just the day to day work that we do, establishing relationships, understanding how we're going to solve certain problems and the mechanisms to how we're going to communicate with our targeted audience to say, hey, we have built this product for you and we understand what needs and what problems you're trying to solve for and these are the solutions that we come up with to help you in meeting those problems. Lastly, before we close, I wanted to share with you the innovation metrics, matrix, excuse me. This is provided by Harvard Business Review. The ambition matrix is a tool which helps companies identify ways to execute their strategy around where to play and how to win. The business model that your organization employs will be influenced by where your products and services are on this matrix. So as you can see, you either fall into the core category, which is to optimize existing products for existing services. You're in adjacent, which you're now looking to expand from the existing business and enter new market areas, new products and services that have been developed with sort of the emerging and foundation technologies that we know are gaining traction in the economy. And lastly, transformational, developing breakthrough and inventing things or markets that don't exist yet. So depending on where you fall within this matrix, again, you're working with your cross-functional teams to see what are the most prioritized and more potentially valuable problems to solve in the market and implementing your product operations. Remember, implementing your business model to be that differentiator in the market that captures and optimizes that value exchange. Thank you very much for joining today's webinar. I hope you enjoyed it and learned something about how business models and how they play a role in the lives of everyday product management functions. I hope we can talk about this subject at a future time. Please feel free to reach out to me. As I mentioned at the beginning of the webinar and I'd love to continue our conversation on business models and talk about any subject and product management that you would like. I think we can learn a lot from one another. Thank you.