We care how we make our profit.

Look, I've got a fantastic idea for an embryonic product in a marginal market, with consumers we've never dealt with before, and I'm not sure it's going to have a big payoff, but it could be really, really big in the future?

Wow, who's this! Brother Sosam!

I wouldn't give up, I would just be going back and looking at the customer segments you are targeting and understand whether you want to build the business or have a hobby.

By now, you're intimately familiar with the business model canvass.

As was simulated, the value proposition includes all the features of your product but also the pains and gains you're solving for the customer segment and that's where the market goes.

They need to understand the external environment and they need to come in.

I mean how do they hear of our products, how do they know about you, and as we'll see later one of the interesting things is there are some customers that are users like in Google

Now if you remember we started here on the left. We didn't earn and paid media.

And in value proposition, the goal of this is to find out that minimum viable product.

You cater an event where the cost to you was 200

Is it about time saved? New efficiency created?

Now we finally come to the last part of the business model canvas.

In customer relationships all the get keep grow metrics, some of which we talked about, some of which you'll discover, what were the customer acquistion costs?

As shown above, it is possible to obtain ample profit and customers with truly simple know how that anyone can do!

Another key component of understanding customers is understanding customer gains, which is a fancy way for saying what are the benefits that customers expect, or desires, so besides the jobs they want to get done what do they want to gain by using your product or service?

In an existing market, if customers react to your hypothesis that what they needed was higher performance and you are correct, this is your revenue curve.

So in our last lectures we talked about value proposition, customer segments, distribution channels, customer relationships get, keeping and growing customers.

So on day one, these were their initial hypothesis coming into the class.

Then again for your revenue stream.

Many companies have huge databases of customer information.

That's your job as the facilitator and coach.

So let's follow our Jersey Square team down and see what they've done for customer relationships.

Instead of pricing based on cost,

I have no idea where my husband is.

What is it you're building and for who?

So, while the goal in value prop is to figure out the MVP, yes, we il see later the goal in customer segments is to figure out who and what the archetype of the customer is.

But here you see it means very, very different things.

Much like ranking ranking pain, I want you to think about ranking gains.

Let me be clear, you could use the business model canvas and customer development to go through the process for nonprofit but actually having some goals that are fairly concrete revenue and profit allows us to measure whether we're succeeding and failing in very clear ways and then we adjust to the question.

And at least it'll give you a sense of how revenues, gross profit, operating profit, pre tax income and net income really are different.

This is really important to pay attention to, because so many people say, oh, a company made this much.

What could be everything?

Again the only way to figure this out is being able to interact with tens or hundreds or thousands of customers so you finally understand what the right revenue streams and revenue model is.

Our interests clash with theirs.

Just as a reminder, what the teams will be starting with in Week 1 is filling out the business model canvas and getting out of the building and testing their hypotheses about the value proposition, customer segments, and channel.

Apple is one of the few, truly cares.

Well, if you think about it, in a new market on year 1 you have no customers, and so your revenue is essentially flat.

Let's take a look.

And now they started to get a better understanding of what customer relationships were, about getting customers, keeping them and growing them.

Banks charge higher interest on loans to risky customers.

The value proposition says, Hey, it's not about your ideal product, it's about solving a problem or a need for a customer.

New Year shrine visit which shrines are potent?

This last step is growing customers for the web mobile channels.

So in the last lecture, you remember the business model canvas, all the 9 components of a startup.