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

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

If you have your own direct sales people, do the math.

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

Then again for your revenue stream.

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?

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

So archetypes really helped us understand our customers, they value prop, the revenue and some of our pricing tactics.

Defense department's largest contractor.

What could be everything?

So one of the interesting equations for every startup is that

That was the customer acquisition cost, CAC, here.

What's the sum of all the revenue from day 1 purchase, so you're keeping them through all the grow activities you're undertaking.

The customer development process is actually a 4 step process.

I call this the day in the life of a customer.

How much did it cost them to take a test drive of your car or fly your airline?

Done. Last page has Bowman's clients from the U.S.

Who are your key partners and suppliers?

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

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

How do they currently buy and what's the revenue stream that's associated with these kind of pricing tactics?

I can't emphasize enough that the business model canvas is just a start.

We just divide both sides by 0.75.

Pricing is kind of the tactics.

Again, your CAC declines. The idea is what can you do to make this very efficient?

A zero sum game means that if I win, someone else is losing by that amount.

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

How do you actually make money from your product and service being sold to customer segments?

It's the best price that someone's willing to give you for something.

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

One of the most important metrics to think about now that we have an end to end funnel is something called lifetime value and a lifetime value LTV is not your lifetime but your customer's lifetime.

Look, Pat, First Rate got that contract fair and square.

Many companies have huge databases of customer information.

Well, remember this was to acquire a customer.

Instead of pricing based on cost,

You cater an event where the cost to you was 200

I have no idea where my husband is.

Then auctions like eBay are another example of dynamic pricing.

What's my worst case scenario?

If you have world's most perfect business model, investors would love to see this number much bigger than this number and so what you want to look for is a well balanced model that takes into account how much you need to acquire customers but how much ultimately you'll extract from them over the lifetime.

Apple is one of the few, truly cares.

Seems intuitively obvious but what you want to make sure is the amount of money you're collecting over here is bigger than the customer acquisition cost to remember the amount of money you're spending from here to here.

You're all familiar with the business model canvas.

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.

What you really want to think about is not just your internal economics, but the customer insight that you actually have.