Business modelinnovation workshop        Indrek Maripuu  twitter.com/indrekmaripuu
Creative CommonsAttribution-NonCommercial-ShareAlike 3.0             Unported License.
WARNING!    It is not a lecture. It is a workshop. You will                   be forced to work!        It is not about wh...
Indrek Maripuu                          ● Brainstormer.                          ● Entrepreneur.                          ...
Clear your mind!                            [Let´s take a bit of time to                            find out what is going...
1. Business model        innovationtwitter.com/indrekmaripuu
@alfrehn have noticed:                                   Communist Party of China:                                     cre...
Do you know this old „proverb“:      “No one ever got fired for hiring McKinsey”.            Modern version of it would be...
Creativity is a ability to         look same things as       everyone else, but to see           different things.      Ou...
Often we focus on the company that launched a      game-changing business model, and forget the    important question: why...
What do you see?twitter.com/indrekmaripuu
This figure was drawn in 1900 by Joseph Jastrow, american        psychologist. The figure can be viewed as a duck or a    ...
twitter.com/indrekmaripuu       So you have sketched a business model? Forget about it!                               Noth...
It is not one HEUREKA moment!                    It is focused effort to find ideas!                 [In order to find a g...
Usual suggestion is: create multiple versions!                                   s                                  e........
The human brain is lazy!          It will only engage if pushed!            Otherwise it will go for the         easier wa...
What associates with...                            ... “foot”?                              86% - shoe, arm, toe          ...
Too bad!             We use             similar            patternstwitter.com/indrekmaripuu
Be careful!                            Your (and mine) brain is                              designed to reognize         ...
Habitual thinking!             „Who the hell wants to hear actors talk?“             Harry M. Warner Warner Bros. 1927    ...
What is the best                                         strategy to                                       overcome this  ...
In order to push            your brain you         need focus & tools!Your focus is the problem you want to solve, or     ...
2. Ideastorm{Focus & tools}
Nothing is more important to exploration and           discovery than the art of asking good                         quest...
Focus!        Ideas for businessmodel innovation can come      from anywhere. Each of the nine building blocks        can ...
Resource-driven Resource driven innovation originates from an organization´s existinginfrastructure or partnership to expa...
Offer-driven   Offer-driven innovation originates creates new value propositions.Example: Cemex, a Mexican cement maker, p...
Customer-drivenCustomer-driven innovation are based on customer needs, facilitated                 access or increased con...
Finance-driven      This is innovation driven by new revenue streams, pricing                 mechanisms or reduced cost s...
Now discuss and decide your    focus for this workshop!    Possible questions to clarify your focus:    ● Resource-driven:...
Tools!twitter.com/indrekmaripuu
Before we                                 start...                            The rational and creative                   ...
For this session, please turn off your rational                         thinking!          [Yes, you are allowed to turn i...
Tool # 1: Brainwritingtwitter.com/indrekmaripuu
Brainwriting            Generate silently at least 3 ideas related to           the question (focus you decided earlier) a...
Tool # 2: daVincitwitter.com/indrekmaripuu
What you can use     tights for?twitter.com/indrekmaripuu
Now let´s use same methodology for        generating ideas for your business                       model.                 ...
3. Selectiontwitter.com/indrekmaripuu
Prioritize                    Map all the ideas based on two criteria:                     investment vs business potentia...
Conceptualize                             Take a look at the ideas!                             Pick up max 8-12 ideas.   ...
PLUS:                 MINUS:            INTERESTING:__________________          __________________   _____________________...
4. New business               modelstwitter.com/indrekmaripuu
Using three best ideas                 develop three new versions                  of your business model!                ...
EW   S!    BA   DN             de l              ess   mo    r bu  sin         t ofYou           st a se is st ill ju     ...
Untested hypotheses                             because you haven´t                            asked customers!           ...
1. How much do switching costs prevent your             customers from churning?    The time, effort, or budget a customer...
3. Does your business model produce                     recurring revenues?     When a newspaper earns revenues from the s...
6. Does your business model provide built-in              protection from competition?         A great business model can ...
Which version (sketch)              of your business models                    is the best?twitter.com/indrekmaripuu
Now,                            prepare                               for                              real               ...
Preparation!   ● Write down your hypotheses for each of the 9   blocks of the business model.   ● Come up with ways to tes...
Thank you! twitter.com/indrekmaripuu
Business model innovation worskshop
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  1. 1. Business modelinnovation workshop Indrek Maripuu twitter.com/indrekmaripuu
  2. 2. Creative CommonsAttribution-NonCommercial-ShareAlike 3.0 Unported License.
  3. 3. Why are we here? To develop new versions of your current business model! - Brainstorm & analyse - Prioritize and develop - Decide next steps - Learn new toolstwitter.com/indrekmaripuu
  4. 4. WARNING! It is not a lecture. It is a workshop. You will be forced to work! It is not about what worked earlier (case studies etc). It is about what may work in the future. You may find it uncomfortable! [In fact, I hope you do! Because only then it is valuable for you!]twitter.com/indrekmaripuu
  5. 5. Indrek Maripuu ● Brainstormer. ● Entrepreneur. ● The evangelist of business model innovation. ● Developing a unique ‘innovation farm’ in Southern Estonia. Twitter: @indrekmaripuuLinkedIn: http://ee.linkedin.com/in/indrekmaripuu
  6. 6. Clear your mind! [Let´s take a bit of time to find out what is going on.] What to you need to say in order to be completely present today? Tell it to your neighbour! You have 5 minutes.twitter.com/indrekmaripuu
  7. 7. 1. Business model innovationtwitter.com/indrekmaripuu
  8. 8. @alfrehn have noticed: Communist Party of China: creativity is natural part in the development of communism and a central part of the revolutionary ideal. Vladimir Putin: creativity will drive Russia. Even Vatikan has its own innovation programs. ...twitter.com/indrekmaripuu
  9. 9. Do you know this old „proverb“: “No one ever got fired for hiring McKinsey”. Modern version of it would be: „No one ever got fired for suggestions like: we have to be more creative.“ There is too much talk about creativity!twitter.com/indrekmaripuu
  10. 10. Creativity is a ability to look same things as everyone else, but to see different things. Our goal today is to learn to see disruptive business models in your industry.twitter.com/indrekmaripuu
  11. 11. Often we focus on the company that launched a game-changing business model, and forget the important question: why didn´t others see the same thing? The problem is not in the knowledge we have or in the stories we have heard, but in how we imagine utilizing this knowledge.twitter.com/indrekmaripuu
  12. 12. What do you see?twitter.com/indrekmaripuu
  13. 13. This figure was drawn in 1900 by Joseph Jastrow, american psychologist. The figure can be viewed as a duck or a rabbit – when the face looks right it is a rabbit; when it looks left it is a duck. You tend to see the whole rabbit or the whole duck. Not both at the same time. It depends on which animal you select to focus on. It is exactly same with business models – you choose where you put your focus and how many different possibilities you see.twitter.com/indrekmaripuu
  14. 14. twitter.com/indrekmaripuu So you have sketched a business model? Forget about it! Nothing is more dangerous than an idea when it’s the only idea you have. - Emile Chartier
  15. 15. It is not one HEUREKA moment! It is focused effort to find ideas! [In order to find a good idea you need lots of ideas!]? Generation [Creative] Synthesis [Rational] DECISIONtwitter.com/indrekmaripuu
  16. 16. Usual suggestion is: create multiple versions! s e....... do ain this b r rk ur O t wo no way! Business Model Canvas is developed by Alexander Osterwaldertwitter.com/indrekmaripuu
  17. 17. The human brain is lazy! It will only engage if pushed! Otherwise it will go for the easier way, the well-known path. [In our case: you just decide you already have a best version of your businessmodel]twitter.com/indrekmaripuu
  18. 18. What associates with... ... “foot”? 86% - shoe, arm, toe ... “command”? 71% - dicipline, army, obey, officertwitter.com/indrekmaripuu
  19. 19. Too bad! We use similar patternstwitter.com/indrekmaripuu
  20. 20. Be careful! Your (and mine) brain is designed to reognize patterns and draw conclusions from them.twitter.com/indrekmaripuu
  21. 21. Habitual thinking! „Who the hell wants to hear actors talk?“ Harry M. Warner Warner Bros. 1927 „Heavier than air flying machines are impossible.“ Lord Kelvin President Royal Society, 1885twitter.com/indrekmaripuu
  22. 22. What is the best strategy to overcome this rational and creative conflict? “The illiterates of the 21st century will not be those who cannot read and write but those who cannot learn, unlearn, andtwitter.com/indrekmaripuu relearn”- Alvin Toffler
  23. 23. In order to push your brain you need focus & tools!Your focus is the problem you want to solve, or the idea you want to expand. We need some creativity tools because we arepretty good at imitating. We are so good that we barely notice when we are imitating.
  24. 24. 2. Ideastorm{Focus & tools}
  25. 25. Nothing is more important to exploration and discovery than the art of asking good questions. Good questions set our focus, ignite passion and energy and illuminate solutions that were previously obscure. Questions are firestarters!twitter.com/indrekmaripuu
  26. 26. Focus! Ideas for businessmodel innovation can come from anywhere. Each of the nine building blocks can be starting point, but all innovations affect other building blocks. Four main epicenters: ● Resource-driven ● Offer-driven ● Customer-driven ● Finance driventwitter.com/indrekmaripuu
  27. 27. Resource-driven Resource driven innovation originates from an organization´s existinginfrastructure or partnership to expand or transform the business model. Example: Amazon Web Service was built on top of Amazon.com´s retail infrastructure to offer server capacity and data storage space.
  28. 28. Offer-driven Offer-driven innovation originates creates new value propositions.Example: Cemex, a Mexican cement maker, promised to deliver cement to job sites within 4 hours (48 was industry standard). This innovation helped them to grow 2nd biggest cement producer in the world.
  29. 29. Customer-drivenCustomer-driven innovation are based on customer needs, facilitated access or increased convinience. Example: 23andMe brought personalized DNA testing to individual clients – an offer previosly available only to health professionals.
  30. 30. Finance-driven This is innovation driven by new revenue streams, pricing mechanisms or reduced cost structure.Example: When Xerox invented the 1st paper copier i was priced to high for the market. They changed businessmodel and started to lease machines and sell copying service.
  31. 31. Now discuss and decide your focus for this workshop! Possible questions to clarify your focus: ● Resource-driven: What new business we can start based on existing infrastructure and / or partnerships? ● Offer-driven: What new value we can offer for our clients? ● Customer-driven: To which new customer segments we can create value? ● Finance driven: How could we create a game changing cost structure?twitter.com/indrekmaripuu
  32. 32. Tools!twitter.com/indrekmaripuu
  33. 33. Before we start... The rational and creative are always in conflict with each other. Rationality likes acting according what our experience tells us, while creativity involves breaking existing rules and habits.twitter.com/indrekmaripuu
  34. 34. For this session, please turn off your rational thinking! [Yes, you are allowed to turn it on later on]twitter.com/indrekmaripuu
  35. 35. Tool # 1: Brainwritingtwitter.com/indrekmaripuu
  36. 36. Brainwriting Generate silently at least 3 ideas related to the question (focus you decided earlier) and write them on the paper. Timeframe: 3 minutes. Pass the paper to the person on your right. Read the ideas you received and develop them. If not able to develop just add a new idea inspired by what you just read. Timeframe: 3 minutes. Continue this process until the circle is closed.twitter.com/indrekmaripuu
  37. 37. Tool # 2: daVincitwitter.com/indrekmaripuu
  38. 38. What you can use tights for?twitter.com/indrekmaripuu
  39. 39. Now let´s use same methodology for generating ideas for your business model. {Now you need your question!}twitter.com/indrekmaripuu
  40. 40. 3. Selectiontwitter.com/indrekmaripuu
  41. 41. Prioritize Map all the ideas based on two criteria: investment vs business potential. ? LowInvestment ? High Low High Business potential
  42. 42. Conceptualize Take a look at the ideas! Pick up max 8-12 ideas. Work in teams: (see template on the next slide) (1) Whats positive? (2) Whats negative? (3) What are the needed further steps? (4) Choose 3 best ideastwitter.com/indrekmaripuu
  43. 43. PLUS: MINUS: INTERESTING:__________________ __________________ ____________________________________ __________________ ____________________________________ __________________ ____________________________________ __________________ ____________________________________ __________________ ____________________________________ __________________ ____________________________________ __________________ ____________________________________ __________________ ____________________________________ __________________ __________________ NEXT BOLD STEPS: ________________________________________________________ ________________________________________________________ ________________________________________________________ ________________________________________________________ ________________________________________________________twitter.com/indrekmaripuu
  44. 44. 4. New business modelstwitter.com/indrekmaripuu
  45. 45. Using three best ideas develop three new versions of your business model! Remember! Change in one block most probably affects all the other blocks as well. Be careful!twitter.com/indrekmaripuu
  46. 46. EW S! BA DN de l ess mo r bu sin t ofYou st a se is st ill ju thes es! dh ypount este
  47. 47. Untested hypotheses because you haven´t asked customers! The most valuable information can only be collected on the field. Not behind your desk or in the workshop. Customers are the only relevant judges of your business model. However, even before you test your model in the market, you can assess its design with following questions by @AlexOsterwalder.twitter.com/indrekmaripuu
  48. 48. 1. How much do switching costs prevent your customers from churning? The time, effort, or budget a customer has to spend to switch from one product or service provider to another is called “switching costs”. The higher the switching costs, the likelier a customer is to stick to one provider. F.ex.: Apple’s iPod “thousand songs in a pocket” was a strategy to get customers to copy all their music into iTunes, which would make it more difficult for them to switch to competing digital music players. 2. How scalable is your business model? Scalability describes how easy it is to expand a business model without equally increasing its cost base. F.ex.: Facebook create value for hundreds of millions of users with only a couple of thousand of engineers.twitter.com/indrekmaripuu
  49. 49. 3. Does your business model produce recurring revenues? When a newspaper earns revenues from the sales at a newsstand they are transactional, while revenues from a subscription are recurring. Recurring revenues have two major advantages: the costs of sales incur only once for repetitive revenues; with recurring revenues you have a better idea of how much you will earn in the future. 4. Do you earn before you spend? This one goes without saying. The more you can earn before spending, the better. F.ex.: Dell assembles computers after the order and managed to decrease inventory costs 5. How much do you get others to do the work? What could be more powerful than getting others to do the work while you earn the money? F.ex.: IKEA gets us to assemble the furniture we buy from them.twitter.com/indrekmaripuu
  50. 50. 6. Does your business model provide built-in protection from competition? A great business model can provide you with a longer-term protection from competition than just a great product. F. ex.: Apple’s appstore. 7. Is your business model based on a game changing cost structure? Cutting costs is a long practiced sport in business. Some business models, however, go beyond cost cutting by creating value based on a totally different cost structure. Skype, for example, provides calls and communication almost like a conventional telecom company, but for free or for a very low cost.twitter.com/indrekmaripuu
  51. 51. Which version (sketch) of your business models is the best?twitter.com/indrekmaripuu
  52. 52. Now, prepare for real tests!twitter.com/indrekmaripuu
  53. 53. Preparation! ● Write down your hypotheses for each of the 9 blocks of the business model. ● Come up with ways to test: what are each of the 9 business model hypotheses? ● Come up with what constitutes a pass / fail signal for the test (e.g. at what point would you say that your hypotheses wasn’t / was correct)?twitter.com/indrekmaripuu
  54. 54. Thank you! twitter.com/indrekmaripuu

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