Canatu’s revenue model
The revenue model points out the flow of inputs and outputs for each player from suppliers all the way to end user. We focus our discussion on the relationship between our project group and Canatu. There are also other interesting parts in the revenue model, such as the type of revenue between manufacturer and end user (which can be for example subscription model or production model), but those are outside of our project’s focus.
The model shows that we are building a demo for Canatu. Canatu is providing feedback to us during the course to guide us into the most feasible direction. Our point of contact with Canatu is their Chief Chemist. The demo would be especially relevant for sales&marketing department, but interesting for the whole company.
The demo is created mainly for Canatu’s direct customers, but also for the end customer. The main purpose of our demo is to showcase the distinct features of Canatu’s CNB film compared to other touch surfaces.
The demo should be funny, interesting and simple enough, so that you can test it with ease, enjoy the experience and understand Canatu’s value proposition.
The demo application doesn’t necessarily need to have extensive customer demand, since it’s promoting the touch surface, not the actual product. But of course the more relevant the demo seems the more attention it will also get from not only Canatu’s direct customers but also from end customers, who can then demand the product that needs Canatu’s CNB film.
Business model canvas for Canatu (Click for a larger picture)
Business model canvas (BMC) lays out the business case behind Canatu’s product, CNB film. Even though in this project course we’re focusing on building a demo for Canatu, it is essential to understand the business that Canatu is building, so that we can assure the demo and its features are serving the right purpose.
In the heart of BMC are Key Partners. Even though Canatu is creating something consumers will use, they are a B2B business. Other businesses, direct customers, are Canatu’s Key Partners and the Customer Relationship with them is both close and personal. A large number of consumers can be reached with only a few prominent Key Partners. Imagine if Samsung would start using Canatu’s CNB film for their curved screens – that should give you an idea how important, and powerful, Canatu’s direct customers can be. Each of these customers can create massive revenue for Canatu. If the relationship is really fruitful, it can create revenue not only for years but potentially for decades.
Canatu’s Key Partners not only bring significant revenue over multiple years, but they can also affect Canatu’s research and development process. Canatu can focus their R&D efforts to serve the special needs of a customer, which supports the personal Customer Relationship. The R&D efforts needed will impact the price for the customer, but in the end Canatu’s price is mostly dependant on the value it can create for the customer. If the product is no better than competitors, there’s no argument for higher price. On the other hand, if Canatu’s CNB film is superior on every aspect after specific R&D efforts made for the customer, then higher price is more than justified.
R&D is naturally the most cost heavy part of the business, but sales and marketing is also notable. Sales and marketing efforts for landing a client, and maintaining the close Customer Relation can be extensive – but they are also productive, since the customer is regarded as a Key Partner that can potentially bring a large share of revenue over a long period of time. In short the cost of acquisition can be high, but also the customer lifetime value can be very high.
Canatu’s customers can be from different industries, but they are served through same means. The actual CNB film is transported via normal logistics (train, truck and ship), and the personal Customer Relationship is maintained through cooperative R&D efforts.
The Value Propositions in BMC are value propositions for end customers, since Canatu’s direct customers make their decisions based on the needs of end customers. So in order to be valuable for Key Partners, Canatu needs to help them serve end customers better.
After the last blog we have been busy conducting interviews and gathering valuable feedback from outsiders. Like discussed in the business model, our prototype is not necessarily designed with such end-customers as a priority. However, we did get valuable perspectives outside our own bubble of thinking. Below you can find some highlights.
People were interested in using this kind of smart glove to control home appliances / use in conjunction with smart home applications
This is something that we had discussed earlier but we didn’t expect our interviewees to spontaneously bring this up. We suspect that our smart glove is easily associated with emerging and/or future technology and thus the value is seen there. Even though this feedback was quite common, we are still moving forward with the idea of using our glove to control a computer interface. This is due to practicalities as it’s easier and more feasible to demonstrate the unique touch features of our prototype.
The smart glove could be very appealing in professional use because of its capabilities to work in three dimensions.
3D modelling and graphical appliances are not something that we had thought of before. If the tracking is very precise, the use case in such scenarios could be very interesting
There are a lot of practical issues in the current prototype that decrease its value in the eyes of “customers”
As we suspected, it was often noted that it’s not effortless to put on a glove to use something. The vision of being able to interact with appliances effortlessly is not entirely true as long as you have to go pick up the glove, put it on, and start interacting. It’s not convenient to put on a glove to switch channels on television, for example. A similar common feedback was that it’s difficult to see how the prototype brings true value to the user. Many of its applications (a computer mouse, for example) can be replaced with current technologies and products that work just as well, if not better.
Regardless of its limited practical use, our prototype did attract a lot of positive reactions and attention from our interviewees. In general, people perceived our smart glove as cool and futuristic which is great feedback for us in itself.
Price point varied from as little as 40€ to hundreds and thousands of euros
In general, our interviewees said that “if this does a lot of things and does them well, it’s worth a lot”. The estimates were mostly in the 50€-100€ range for private use, but when the interviewee looked at it from a professional / corporate perspective, the estimates rose to the hundreds of euros. And in one scenario, if a similar product could be used precisely in 3D modelling, its price could be realistically in the thousands.
Key takeaway from the interviews was that we’re creating something that’s is interesting for potential customers. Since the demo can also showcase the distinct features of Canatu’s CNB film we are on the right track for creating both a successful and meaningful demo!