Creating Your Value Map – Steve Case and America Online
Steven Case created America Online from scratch into the world’s largest online service by making the power of the Internet available to the average consumer.
He describes his source of pain. “In 1982, I bought my first computer and wanted to hook it up and be part of this online world, and I went to great lengths to make it happen. It took many months, and hundreds of dollars to get the modem to work with the software to work with the cable to work with the computer to actually connect to this world. So it was very frustrating.”
In 1985 at a time when General Electric launched Genie online services, and IBM and Sears together launched Prodigy online services, Case launched Q-Link, an online service based in Virginia. In the early 1990s he watched the development of modems and believed that faster modems would become commoditized in the near future which would mean more potential customers for his online service.
In 1991 he changed the name of his business to America Online (AOL) and he took the company public in 1992. By fall 1994 they had one million users plugging into the Internet through AOL. Between 1992 and 1999 AOL added more than 13 million subscribers. That was more new subscribers than The New York Times and The Washington Post together had added in 50 years prior.
In 2003, America Online was the world’s largest Internet access provider (with more than 35 million subscribers using its AOL online service). Nearly 400 million emails were sent and received daily through the AOL network; 13.4 billion Web pages served up daily, and more than 2.1 billion instant messages were sent daily.
Creating Your Value Map
A value map identifies the major flows of product, information, revenues, inputs, and outputs. It details the major benefits, roles, and relationships among your venture’s stakeholders: customers, alliances, and suppliers. Figure 8-1 is an example of a value map. It provides a high-level view of AOL and the value it created for particular markets.
The resources that the venture consumes, or requires as inputs, are shown on the left. The outputs the venture generates—products and services—are shown on the right. Create a work-in-progress value map on the largest whiteboard in your office, so that you and your venture team can look at it everyday.
In a presentation, your value map on a PowerPoint slide helps your investors immediately understand your business model, and helps them see how familiar you are with your chosen market. It quickly leads them through a visual display of your current assumptions.
SOURCE: Roadmap To Entrepreneurial Success
ROADMAP: p. 132
PHOTO: Wikimedia Commons