Management technologies of business modeling in it startup marketing

Стаття присвячена основним проблемним питанням взаємозв 'язку міжуправлінськими технологіями бізнес-моделюванням та маркетинговим плануванням ІТ-стартапів. Проаналізовано сучасні підходи до класифікації, завдання, шаблони та елементи побудови бізнес-моделей. Розглянуто актуальні проблеми та можливості менеджменту та маркетингу в індустрії стартапів. Запропоновано для зменшення ризиків використовувати інструменти бізнес-моделювання в ланцюжку етапів ефективного управлінського процесу для стартапів. Обумовлено роль управління бізнес-моделями ІТ-стартапу у плануванні маркетингу. Описано переваги для підприємців та інвесторів адекватного застосування бізнес-моделей задля розуміння того, як буде реалізована бізнес-ідея та оцінки прибутковості проекту. На прикладі українського стартап-проекту «Monobank» проаналізовано роль маркетингового планування при управлінні IT-стартапами за допомогою управлінських технологій бізнес -моделювання. Сформульовано принципи інтеграції та конвергенції менеджменту та маркетингу IT - стартапів при вирішенні проблеми з залученням інвестицій та з виведенням інноваційного продукту або послуги на ринок.

Ключові слова: управлінські технології бізнес -моделювання, ІТ-стартапи, бізнес-моделі стартапів, маркетингова стратегія, інструменти бізнес -моделювання.

Statement of the problem in general form and it's connection with important scientific or practical tasks

The modern problems of IT startup management include a lack of theoretical background and marketing management skills among entrepreneurs. A deficiency of forms, methods and tools of marketing management for innovation projects leads to the wrong choice and realization of marketing strategy. Statistics show that 25.5% of startups are unable to launch their product to the market and become successful companies. The reason of this situation is a weakly developed business model. The business model gives an understanding of business processes and added value generation. This is important for business idea owners and investors to assess the profitability of a marketing project. The point is that while the business model is developing, marketers and managers make decisions such as formulation of the mission of the company, the value proposition of the innovative product creation, the target audience selection, the market segmentation, the portrait of the client and the selection of sales channels.

Analysis of the latest research and publications, which initiated the solution of this problem on which the author relies. Scientists and researchers from all over the world have made significant contributions to the study of this problem: Steve Blank [6], Bob Dorf [10], Eric Ries [4], O. Gassman [15], M. Schick [7], K. Frankenberger [1], A. Osterwalder [13], I. Pinet [11] and others.

The study of business modelling began n the period of the development of information technology and the emergence of large-scale projects in various sectors of the economy. It encouraged business experts to consider the organization as a system with interacting components. In 1994, Peter Drucker wrote about business modelling in a Harvard Business Review article, using the term "business theory," defining it as «assumptions about what a company gets paid for» [14].

Then Adrian Sliwotski, Albert Whiskey and Bruce Pasternak, Paul Timmers, Alexander Osterwalder and other famous business researchers presented their understanding of business models to the world [4].

Nowadays, there is not single opinion about business models. As aresult, there are a lot of different approaches, concepts, styles and templates for their development.

For example, Joan Magrette, in her article "Why business model matters," defines the business model as a value chain. According to her opinion, the business model consists of two parts. The first part includes all activities related to the creation of the product: design, purchase materials, production, etc. The second part includes all activities related to the sale of the product: finding and attracting customers, making the sale, distributing the product or providing a service [8].

Research carried out by Andrian Sliwotski, David Maurice and other specialists of the consulting company Mercer Management Consulting, led them to the conclusion, that the business model is the way, how a company chooses the consumer, formulates proposals, allocates resources, enters the market, creates value for the consumer and gets profit.

In other words, a company's business model is a complex system of actions and relationships

Highlighting the previously unresolved parts of the general problem to which the article is devoted. The process of business modelling has been thoroughly studied by various scientists and business experts. These studies have explored the functions of business modelling, analyzed approaches to building business models, and studied the business model as the main management tool of start-up management. Most studies also focus on the problem of attracting investors to finance a startup. However, the rapid development of the international startup industry creates an environment of fierce competition. Therefore, the development of a proper marketing strategy plays a major role in the innovative company's success.

Formulation of the purpose of the article (statement of the problem)

The purpose of the article - to analyze the relationship between business modelling and the marketing strategy of IT startups, as well as prove the importance of proper marketing planning for the realization of a startup project.

Statement of the main material of the research with full justification of the scientific results obtained. As mentioned earlier, there is no single way of understanding business modelling. As a result, there are many different approaches, concepts, styles, and templates for their development. However, most of these theories have lots in common.

For example, the authors of the book "The Business Model Navigator: 55 Models That Will Revolutionise Your Business " A. Gassmann, M. Csick, and K. Frankenberger claim that 90% of all new business models are not so new, because they are based on existing patterns.

Let us first consider some of the most famous templates: Hamel's Model and «The Nine Blocks of the Business Model Canvas» by Alex Osterwalder and Yves Pigneur.

One of the business models was proposed by G. Hamel. He defines a business model as a “business concept that has been put into practice ” [13].

He fashions a business model framework based on four key components: Core Strategy, Strategic Resources, Value Network, Customer Interface (Fig. 1).

Figure 1 Gary Hamel's Business Model [13]

Hamel also identifies three “bridges”:

- Configuration refers to the unique way in which competencies, assets, and processes are combined and interrelated in support of a particular strategy;

- Customer Benefits refers to the specific bundle of benefits that are being offered to the customer;

- Company boundaries encompass the decisions that have been made about what the firm does and what it contracts out to the value network.

«The Nine Blocks of the Business Model Canvas» by Alex Osterwalder contains nine units: key partners and stakeholders, key activity, value proposition, customer relationship, customer segment, key resources, channels, cost structure, revenue stream.

Next, let's analyze the influence of business modelling on marketing strategy.

To do this, let's consider the structural elements of Hamel's and Osterwalder's business models, which involve planning a marketing strategy for IT startups.

Thus, after considering the approaches to building business models using these templates, you can see the emphasis on market analysis, determining the needs of the chosen target audience, building relationships with customers, creating a sustainable competitive advantage.

Useful management tools for business modeling can be business modeling evaluation techniques that can be used to analyze the marketing strategy of IT startups.

The study of business model evaluation techniques is especially important for business owners, senior managers and investors.

Evaluating startup business models helps investors assess the risks and profitability of a business. Business owners and top managers need to evaluate business models to accomplish the following tasks (Table 1).

Table 1

The structural elements of Hamel's and Osterwalder's business models

Qualitative methods of assessment include methods based on subjective identifying the [1, p. 32]:

1) strengths and weaknesses of the business;

2) evaluating the performance of your team;

3) developing measurable goals;

4) implementing cost controls;

5) identifying and solving problems through appropriate and optimal strategies. Business model analysis techniques can be divided into quantitative and qualitative.

Examples of qualitative assessment methods are SWOT-analysis, Mateu and MarchChord methodology or polygon of competitiveness and others.

Quantitative business modeling analyses include the aforementioned DuPont 12-factor analysis, CVP-analysis, situational modeling of the break-even point.

Let's analyze one of the methodologies of business model evaluation for startups - Mateu & March-Chorda's methodology [9, p. 29].

Mateu and March-Chorda's methodology (2016) proposes a scale for ex-ante business model assessment consisting of eight indicators that evaluate eight key factors in the model. The evaluation is carried out by answering specific questions about the model that is being analysed. Possible answers are 1, 2, 3, 4 and 5 (Table 2).

Table 2

Mateu and March-Chorda's Methodology

To evaluate a "Value creation condition" 1 point means a totally useless proposition, 5 points - extraordinarily useful.

To evaluate a «Complete value proposition condition».

Rated with a score of 5: easy to implement models that require very low economic investment, and do not need any sophisticated technological resources or particularly qualified staff.

Rated with a score of 4: models that require a small economic investment (the purchase of some equipment) and/or to hire qualified staff with specialisations which abound in the labour market (tax advisors, for example).

Rated with a score of 3: models that require a more significant economic investment or sophisticated technological resources. Although an asset such as a bus or minibus can be rented, with or without a driver, the supplier will demand a certain minimum commitment, which will raise the required investment, although not as much as if the vehicle has to be purchased. Conversely, we understand sophisticated technological resources as being the software and other elements required to start up a more innovative service.

Rated with a score of 2: models that require a larger-scale investment, for example, to buy goods that cannot be rented, are expensive or are hardly accessible.

Rated with a score of 1: models that require major investment and/or cutting-edge technological adaptations.

To grade the «Sufficient size of the market condition»: 1 point means that the consumer will not use the product/service, 5 points - constant use.

To evaluate «Access to the potential customer condition»:

Rated with a score of 5: models which are obviously useful (they do not need any explanation), regardless of whether the service is of interest to a particular resident.

Rated with a score of 4: models which, given their professional foundation, require a certain degree of explanation in order to show their value or usefulness.

Rated with a score of 3: models which, given their novelty value or innovative nature, represent a change in the way potential customers now solve the specific need that is served.

Scores 1 and 2 have no meaning in this context.

For the evaluation of «Willingness to make an effort condition»:

Rated with a score of 1: services usually offered for free.

Rated with a score of 2: models that offer services that the customer can self-provide or can hire at a low cost and with little effort.

Rated with a score of 3: models that offer services for which the customer has comparable alternatives, though with different attributes.

Rated with a score of 4: models that provide significant added value to potential users. This would be the case of a service that provides something occasionally or that gives an advantage when needed (such as buying second-hand goods or renting them).

Rated with a score of 5: models for which we understand that the effort required of users will be made willingly.

For the evaluation of «Affordable costs condition»:

Rated with a score of 1: models based almost exclusively on personal effort, with no economies of scale.

Rated with a score of 2: models that have a certain degree of economies of scale in secondary activities of the value chain, or can delegate certain activities to the customer via technology. The first case would be the case of models that require a physical space for their provision, in so far as they can benefit from economies of scale in terms of the rental cost.

Rated with a score of 3: models that involve better economies of scale.

Rated with a score of 4: models that only require sporadic or occasional staff participation, that is, the user does not require assistance from staff during the service.

Rated with a score of 5: models with excellent economies of scale, network economies or others.

For the evaluation of «Entry barrier existence condition»:

Rated with a score of 4: models that have network effects, or other similar effects, that would help a first mover to gain a competitive advantage.

Rated with a score of 3: models that are easy to imitate but which have a considerable entry barrier given the volume of investment they require and the small market they serve.

Rated with a score of 2: models that are easy to imitate but could have first-mover advantages at local level.

Rated with a score of 1: easy to imitate models where it is difficult to establish any barrier to deter copies [10, p. 39].

Management experts and specialists in certain categories evaluate eight indicators. The first category, for example, is related to the value proposition. Therefore, to evaluate this indicator, it would be useful to know the opinions of potential customers.

Factor №3 measures not only the size of the market, but also the part of the market that is interested in the value proposition. For example, marketers can evaluate these indicators.

A technology analytics platform created for a global network of executives and startups, CB Insights conducted research on the reasons why some of the startups are unviable and certainly not competitive.

Consequently, the following results were obtained.

According to a survey of 368 startup founders [3], 25.5% of them were unable to bring their products to market and grow into a full-fledged company because they neglected business modeling (Fig. 2).

Figure 2 Reasons why startups are not viable

A business model is a description of how a company maps the key components and processes of an enterprise and organizes them into a revenue-oriented system.

In addition, experts indicate that the business model performs the following functions:

1) definition of the key competencies of the project;

2) determination of the cost and income structure,

3) analysis of cash flow;

4) definition of value for consumers;

5) identification of the market and the purpose of using the product created by the project;

6) identification of the startup's position in the relationship with suppliers, customers, and competitors;

7) forming the competitive advantages of the project.

After a detailed analysis of the reasons for the failure of startup projects, we can conclude that the main reason why startups are unable to bring their products to market and grow into a full-fledged company is the inability to create an appropriate business model for the startup project and the inability to manage it.

Next, by the example of the Ukrainian startup Monobank analyze the role of marketing planning in the management of IT-startups with the previously discussed management techniques.

Monobank project is a startup according to the following features:

1) offering banking services only online, innovative for Ukrainian market;

2) rapid development;

3) active development of target audience and relevant market segment;

4) offering services in new markets, providing them to new clients.

Universal Bank became a partner of the project. Monobank is not a separate bank, with its own license or infrastructure.

In fact, Fintech Band created and develop the banking application as a brand for Universal Bank.

Next, let's examine Monobank's business model, using the The Business Model Canvas (Table 3).

Table 3

Description of the business model of the innovative Monobank project using the BMC

Monobank - the first bank in Ukraine, which does not have traditional offices and serves its customers only with the help of mobile applications.

The range of services offered by Monobank includes free money transfers, control of your own financial operations, etc. To analyze this business model and marketing strategy, we will use Mateu & March-Chorda's methodology and examine the project according to the proposed eight categories (Table 4).

Table 4

Description of the business model of the innovative monobank project using Mateu and March-Chorda's Methodology

In December 2020, 57.2% of users were men and 42.8% were women. The most common user age is 23 years old. Customer base growth for 2020 [12].

The Fig.3 shows a steady growth in the number of users.

Figure 3 Dynamics of the number of Monobank customers in 2020

At the beginning of the year the number of customers was 1.8 million, but at the end of the year this indicator reached 3.1 million, i.e. for 2020 the growth of customers was 1.3 million. Currently, the number of monobank's clients is 4.3 million.

The Fig.4. shows the structure of customers by regions.

Figure 4 Customer structure by region 2020

The largest share of monobank application consumers is observed in Kiev (16.4%) and Dnepropetrovsk region (11.4%). It is also known that 23% of customers are students, 60% of customers have higher education, 85% live in cities with populations over 250 thousand people.

To become a client of the bank you need to download the application, take photos of documents and send them through the application. There is also an option to order free card delivery to your home or workplace. If users have any problems or questions, they can use the support services via Viber, Telegram, Facebook or by phone. The main partners of monobank are Sport Life, Comfy, Rozetka, MOYO, Citrus, Foxtrot, ect.

Firstly, the main role plays the digitalization of business processes, as sales, customer relations, and key activities are performed online. Second, partnerships are crucial to this business model. As the project was developed and continues to exist thanks to the cooperation of Fintech Band and Universal Bank. The revenue stream is generated as in conventional bank models.

The marketing team of mononbank has chosen young people, who are focused on progressiveness and digitalization, as their target audience. This choice became the basis for building a marketing strategy uncharacteristic for banks.

First of all, the promotion channels were youtube, social networks and media sites specializing in business and technology topics.

The second major difference is the "tone of voice". Mononbank uses an informal style of communication with its customers.

Another interesting solution for such a service was to feature a personage (a cat). There are many other innovative tools that are used, such as sets of fun stickers that are given when you get a card, comments from the "cat" and rewards in the app, and so on.

Considering the non-standard for the banking sphere marketing strategy, it makes sense to explore the client structure of neobank in detail.

We can conclude that the marketing team of monobank used the blue ocean strategy.

The blue ocean strategy is one of the possible variants of the company development strategy formulated by K. Chan and R. Mauborgne [2]. According to this concept, a project or business should create an innovation of value for the consumer, not just a benefit or value.

New value is created for consumers with innovative products, innovative methods of their production and fundamentally new ways of sales, which the market has never offered before.

Conclusions from this research and prospects for further developments in this area

Running startups with business models has a number of features that are different from traditional businesses. The business modeling of a startup involves analyzing market opportunities for innovation, selecting a target market segment, developing a pricing policy, developing mechanisms to protect the business from copying (including patenting tactics, brand building), attracting investors, calculating possible risks, including the closure of failed projects. The business model evaluation uses quantitative (Du Pont model) and qualitative evaluation methods (Matheu and March-Chord Methodology, SWOT).

The evaluation of startup business models is important for owners, senior managers and investors, and even for marketers.

Management techniques for business modeling, namely templates for building business models and business modeling evaluation techniques have a close connection to marketing strategy, as their main tasks include:

1) Conducting a target part and market analysis, which helps to find the correlation between the startup's capabilities and the sales market.

2) Segmentation of customers into target groups

3) Positioning. Marketing development strategy involves clearly defining one's position in a niche. It is possible to take the leading position in a highly competitive niche only if you have a valuable USP, competitive advantages and corporate identity.

4) Development of pricing policy, promotion strategy, determination of sales channels.

Having also analyzed the reasons of success of national IT startup Monobank, we can conclude that in conditions of fierce competition and market oversaturation, an important and sometimes even decisive role is played by a properly developed marketing strategy. Because today's business environment includes not only problems with attracting investment, but also difficulties associated with bringing an innovative product or service to market.

That is why it is necessary to study the management and marketing of IT-startups as a complex, not separate.

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