Business Model Canvas

Business Canvas Model Technology and innovation continues to advance and provide people around the world with things that not only make life easier, but also that can make life much safer. As a result of this, people worldwide are relying on technology to run most aspects of their lives and will spare no expense for a product that can fill the void that they have or even the one that they didn’t know they had. Technology has also become one of the biggest causes of distractions by drivers in the United States. On average there are about 6 million car accidents annually in the U.S., in which about 3 million are a result of distracted driving (Car Accident Statistics in the U.S., 2021).The product in which we will create will be a smartphone app that blocks all text messages, phone calls, and other multi-media apps that can cause a driver to become distracted while driving. The app utilizes the phones cameras and GPS information to determine if the individual operating the smartphone is currently driving and will only operate the blocked apps through voice command, by utilizing the vehicles Bluetooth technology. Key Partners We will first look at the key partners for this product. Key partners for this product are not necessary for the development and completion of the app. They will, however, be extremely beneficial in helping to market the app once it is completed. These key partners will use this product as a selling point to boost the demand for their own products. By having the latest and greatest products featured within their own, it will provide great motivation for the key partners to further showcase our product. Some examples of these key partners are insurance companies, drivers and parents. Key Activities The next area of the business model canvas we will discuss are key activities. Key activities are a huge aspect that is an instrumental to the design of the app. This is based off what the entrepreneur needs to complete in order to help in the selling of the product. The first activity will be to build the base platform for the app. Then, we will test the GPS and camera integration to ensure that they are functioning properly. Once the internal testing of the app is completed, we will then focus on external consumer testing to determine our target market and potential demand for the app. Value Propositions Ensuring that the product is distinct, different, and serves a specific need are all important factors in the success of a product. In order for accomplish this, you need to ensure that the product has a Unique Value Proposition (“UVP”), a Minimal Viable Product (“MVP”), strong customer relationship retention strategy, the proper channels of distribution, a clear and defined target market, along with a detailed account of the expenses and revenues of the product. “In business and marketing, the UVP (unique value proposition) is a statement that clearly tells your potential customers how they will benefit from your offer, how your products or services will address their needs and solve their problems, and what makes your offer different from the competition” (What is UVP, 2019). The UVP of the app is that it incorporates the GPS aspect and the use of the cameras to determine if the smartphone operator is the one driving the car. Whereas, MVP, is the earliest version of a product that has only required features, enough to deliver the core value and verify it to early customers (Minimum Viable Product, 2017). The MVP is that the baseline app that includes the blocking of apps for any individuals in the car. We will use our external consumer testing to get necessary feedback in order to ensure that the final product includes all of the features that they are looking for. Such future features would be the full GPS/camera integration, along with the linking with the cars Bluetooth system. The target market of the app will be for drivers between the ages of 16 and 30, with the initial focus being on U.S. drivers. Customer Relationships The next aspect that we will look at are customer relationships. In business, a relationship with a customer is key. A good working product, paired with a fair cost and great customer service are the keys to retaining a customer. When it comes to the customer relationship and retention strategy, this will be accomplished by the use of multi-year subscription discounts, new customer referral benefits and further app development to include future features and benefits. The combination of these benefits will ensure that we not only retain our current customers year after year, but also gain new through word of mouth referrals. Key Resources We look next at the key resources of the business canvas model. As the creator and designer of the app, I will be the main key resource. Our external testing consumers will be the next group of key resources. They will provide feedback on the functionality, usability, and overall desire for the app. Once the app has been tested and is finalized our last group of key resources will come into play. They are the Apple App Store and Google Play Store. This is not only where the consumers will be able to find and download the app for use, but will also serve as a promoter of our app. Channels We will next look at the channels of distribution for our app. Our two main channels of distribution, will be the Apple App Store and the Google Play Store. Almost anyone in the U.S. who owns a smartphone, no matter the brand, will utilize one of these two platforms to showcase the apps that can be used. Their widespread use will allow our app to be available to millions of people at the time of launch. While, these are the main method of direct distribution of the product, we will look to utilize social media platforms to help promote the product. Social media has become one of the biggest ways to market a product in today’s market. This is especially true due to the sheer number of people that utilize social media platforms every day. With social media, you have the ability to easily and cost effectively reach a significant base of people. Cost Structures The cost structures of the app, are another big aspect of the business model canvas. The creation of the app, will require a significant time requirement, which is anticipated to be approximately 10 months including development and internal testing. While there is a large time investment, the overall expense investment for the first year of the app is about $260,000. This can be broken down as follows: $140,000 to develop the app, $85,000 for marketing and $35,000 to cover the first year of maintenance of the app (Chomko, 2012). In year 2, we would be looking at expenses of approximately $150,000, with the expenses staying relatively flat year over year. Given the undertaking of this project, these costs are relatively low and will help to aid in the long-term profitability of the app. Revenue Streams The main revenue streams for the app will be through the yearly subscription to the app. Upon signup for the app, Customers will provide credit card information that will be used for the first initial payment and all future automatic renewal payments. When looking at the revenue goals for the app, we anticipate 350,000 downloads per month, with a monthly subscription cost of $4.00, which would result in a total revenue of $16,800,000 in the first year of operation. The U.S. currently has a population of just over 332 million people, so while people may one day fall out of the app’s target market, there will be a continuous need for the app as more new drivers enter the target range each year (United States Population, 2021). In conclusion, the app will succeed and will provide a large profit for the overall amount of work and effort that it took to get off the ground. Furthermore, and from more of an entrepreneurial point of view, it would be the most beneficial for the app to be downloaded and subscribed to as early as possible, thus ensuring they take full advantage of immediate benefits that it brings along with the ability to secure long term pricing benefits. This could lead to an influx in subscribership in the first few months of the app’s release, but the constant need for safety will keep the app relevant and marketable for many years to come.