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Presentation on Real Time Communications Business Models delivered at the IIT RTC conference September 12, 2012 in Chicago.

Presentation on Real Time Communications Business Models delivered at the IIT RTC conference September 12, 2012 in Chicago.

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RTC business models web Document Transcript

  • 1. RTC  Business  Models,  RTC  Conference,  Chicago,  Sept  10  –  12,  2012   1  
  • 2. RTC  Business  Models,  RTC  Conference,  Chicago,  Sept  10  –  12,  2012   Neal  and  Nik,  thank  you  for  the  introduc@on.    It  is  a  pleasure  to  be  here.     I  am  here  to  talk  about  Real  Time  Communica@on  business  models.    I   have  been  working  with  business  models  since  2002  across  a  broad   range  of  opportuni@es  and  mainly  with  high  tech  companies.         I  have  worked  with  advanced  research  labs  discussing  how  to  design  a   business  model  around  new  technology,  worked  with  innova@on  groups   to  develop  new  business  models,  developed  a  disrup@ve  business  model   across  an  ecosystem  and  I  currently  volunteer  and  mentor  start  up  CEOs   on  their  business  model  as  part  of  Springboard  Enterprises.    I    have  a   consultancy  focused  on  business  model  innova@on  and  using  business   model  thinking  to  solve  a  range  of  business  problems.     In  this  discussion,  I  will  first  provide  some  broader  context  before   discussing  business  model  hypotheses  and  then  discussing  methods  for   geKng  to  specific  business  model  opportuni@es.   2  
  • 3. RTC  Business  Models,  RTC  Conference,  Chicago,  Sept  10  –  12,  2012   Business  models  balance  technology,  customer  and  business  requirements  and   are  defined  at  the  intersec@on  of  Is  it  possible,  is  it  desirable  and  is  it  viable.     As  we  seek  to  design  and  define  business  models,  we  are  looking  to  answer  some   key  ques@ons:      -­‐  What  technology  exists  today  to  enable  my  business  model?    -­‐  What  likely  technology  innova@ons  would  enable  business  model  innova@on?      -­‐  What  high  value  customers  are  targeted?    -­‐  For  what  reasons  will  customers  pay  a  premium,  switch  supplies  or    increase  their  loyalty?    -­‐  What  is  the  differen@ated  business  model  value  proposi@on?    -­‐  What  profit  model  is  used  to  capture  value?    How  does  high  profit    happen?    What  are  or  will  be  the  profit  zones?    -­‐  How  can  we  maximize  the  sustainability  of  out  –  year  cash  flows?    -­‐  What  economics  and  performance  systems  are  required  to  execute?   3  
  • 4. RTC  Business  Models,  RTC  Conference,  Chicago,  Sept  10  –  12,  2012   I  wanted  to  start  the  conversa@on  by  looking  at  the  broader  context.    This  graph  is   from  the  Economist  and  speaks  to  the  stages  of  IT  expansion  and  I  have  added  a   perspec@ve  on  the  shiY  in  dominant  profit  models.     In  the  70’s  and  80’s,  we  had  a  systems  centric  period  with  proprietary  systems.    High   profit  happened  in  the  early  years/months  of  with  new  product  introduc@ons.     In  the  90’s  as  PCs  decentralized  to  the  desk,  we  shiYed  to  a  PC  Centric  period.    High   profit  happened  with  the  de  facto  standards  and  high  market  share.    This  has  been   the  wintel  profit  engine.     We  are  now  moving  into  a  network  centric  period  intermediated  by  the  internet.     High  profit  happens  through  the  network  effect  where  ventures  intermediate   between  reciprocal  par@es  e.g.  buyers  and  sellers.     Why  is  this  important?    As  we  design  business  models,  it  is  helpful  to  understand  the   dominant  sources  of  value  crea@on   4  
  • 5. RTC  Business  Models,  RTC  Conference,  Chicago,  Sept  10  –  12,  2012   Over  the  past  20  years,  the  product  was  the  key  component  of  the   business  strategy.    And  although  s@ll  cri@cally  important,  it  is  important   to  recognize  that  as  we  move  more  toward  network  centric  business   models,  we  need  to  evolve  our  mindset.     In  the  systems  and  PC  centric  era  most  of  the  focus  was  on  the  product   and  on  providing  complete  solu@ons.     As  we  are  moving  into  the  network  centric  era,  we  now  need  to  shiY  our   focus  beyond  the  product  and  solu@on,    and  look  to  the  ecosystem  for   sources  of  profit.       There  are  industries  where  the  profit  has  moved  away  from  the  product   to  other  elements  of  a  complete  solu@on  and  the  broader  ecosystem.   5  
  • 6. RTC  Business  Models,  RTC  Conference,  Chicago,  Sept  10  –  12,  2012   Now  let’s  talk  about  the  consumer  /  customer.    How  do  they  experience   Real  Time  Communica@ons?     It  is  a  confusing  landscape  from  many  op@ons  on  the  screen  to  many   op@ons  around  the  screen.    The  ques@on  is  how  does  a  consumer  make   sense  of  it  all?       One  of  the  drivers  of  consumer  choice  is  what  I  call  consumer  economics.     This  is  not  only  about  dollars  and  cents  but  also  about  @me  and  hassle.     There  is  much  variability  with  Real  Time  Communica@ons  consumer   economics.    Just  in  terms  of  dollars  and  cents  there  is  great  variability   around  hardware,  installa@on  and  services.    An  example  is  VOIP  services.     Fixed  home  can  run  from  $10  a  month  to  $30  a  month  for  virtually  the   same  outcome.    Interna@onal  calls  (to  France)  using  your  cell  phone  can   run  from  $3.41/minute  to  $0.02/minute  without  using  any  cell  minutes.     To  make  sense  of  this  environment,  we  look  at  the  job  to  be  done.       6  
  • 7. RTC  Business  Models,  RTC  Conference,  Chicago,  Sept  10  –  12,  2012   What  is  the  job  to  be  done?    It  is  all  about  puKng  what  the  consumer   wants  to  accomplish  at  the  center  of  our  thinking.    The  job  to  be  done  is   defined  not  only  by  the  desired  outcome  but  also  by  understanding   where  there  is  an  experience  gap,  what  mo@va@ons  the  consumer  has,   what  the  customer  economics  are,  what  are  the  choice  available  to  the   consumer  in  what  contexts  and  with  what  social  networks.     Examples  of  a  job  to  be  done  includes  communica@ng  visually  between  a   hotel  room  and  the  head  office,  collabora@ng  on  a  presenta@on  between   Shanghai,  Chicago  and  Paris,  issuing  a  tsunami  warning  to  parts  of  the   west  cost  of  Hawaii.       7  
  • 8. RTC  Business  Models,  RTC  Conference,  Chicago,  Sept  10  –  12,  2012   How  do  we  use  the    “job  to  be  done”  and  start  linking  the  consumer  with   technology  and  product.    This  work  is  also  part  of  the  founda@on  we   need  to  build  to  uncover  business  model  opportuni@es.     One  approach  that  I  have  developed  involves  mapping  possible  value   delivery  systems  and  itera@vely  link  them  to  desired  outcomes.    The   result  is  a  structured  approach  to  answering  the  “is  it  viable  is  it  possible   and  is  it  desirable”  ques@on  for  each  desired  outcome.     Let’s  take  one  concrete  example”    Disaster  warnings.                 Now  let’s  look  at  the  implica@ons  for  possible  RTC  business  models   8  
  • 9. RTC  Business  Models,  RTC  Conference,  Chicago,  Sept  10  –  12,  2012   At  this  point  we  have  some  business  model  hypotheses  that  we  can   make.     One  set  of  business  models  exist  at  the  infrastructure  /  service  provider   level  and  are  part  of  the  RTC  ecosystem.    These  business  models  are   mainly  at  the  product  and  solu@on  level  and  there  is  much  focus  on   crea@ng  common  standards  that  enable  interoperability  among  players.      At  another  level,  there  are  business  models  that  are  enabled  by  the  RTC   ecosystem.    The  RTC  ecosystem  can  be  considered  a  keystone  and  what   is  unique  is  that  the  keystone  is  the  ecosystem  and  not  just  a  single   company.  [A  keystone  aims  to  improve  the  overall  health  of  their   ecosystems  by  providing  a  stable  and  predictable  set  of  common  assets   that  other  organiza@ons  use  to  build  their  own  offerings.]     [walk  through  the  details]       9  
  • 10. RTC  Business  Models,  RTC  Conference,  Chicago,  Sept  10  –  12,  2012   Before  talking  about  how  do  we  develop  specific  business  model   opportuni@es,  I  thought  that  it  would  be  helpful  to  provide  informa@on   on  the  different  elements  of  a  business  model  and  how  they  inter-­‐relate.           10  
  • 11. RTC  Business  Models,  RTC  Conference,  Chicago,  Sept  10  –  12,  2012     The  big  ques@on  is  how  do  we  move  from  a  hypothesis  to  developing  an   understanding  of  the  opportuni@es  available  to  companies.  In  2004  I   developed  some  unique  IP  that  looks  at  ecosystems  from  a  business  models   perspec@ve.    The  analysis  is  not  an  end  in  of  itself  but  rather  fundamental   research  and  understanding  of  how  value  is  created  in  the  ecosystem.         The  key  benefit  to  organiza@ons  is  developing  context  around  your  company’s   role  and  posi@on  in  the  ecosystem  and  make  visible  opportuni@es  to  play   addi@onal  or  different  roles  and  access  significant  value.    It  also  serves  as  a   framework  for  technology  development  and  link  to  the  value  delivery  systems   and  jobs  to  be  done  most  likely  to  succeed.     This  approach  has  been  used  at  Hewleo  Packard  when  significant  value  was   sought  by  senior  management.      It  allowed  HP  to  deconstruct  Kodak’s  master   plan  in  the  digital  imaging  space  and  uncover  both  risks  and  opportuni@es  that   had  not  been  visible  before.    It  was  also  used  to  develop  a  disrup@ve  Billion   dollar  business  model  opportunity  in  the  commercial  prin@ng  ecosystem.   11  
  • 12. RTC  Business  Models,  RTC  Conference,  Chicago,  Sept  10  –  12,  2012   This  is  an  example  of  what  can  be  developed  as  an  outcome  of  this  work.       The  graphic  depicts  all  the  games  that  can  be  played  within  an  ecosystem   across  the  value  delivery  system  and  with  value  crea@on  opportuni@es  in  the   millions  to  the  billions.        There  are  number  of  other  concrete  outputs  but  the  challenge  is  that  many  of   those  remain  confiden@al.               12  
  • 13. RTC  Business  Models,  RTC  Conference,  Chicago,  Sept  10  –  12,  2012   Today  we  started  a  discussion  on  RTC  business  models  yet  we  have   barely  scratched  the  surface.       As  work  con@nues  on  RTC  technologies  and  addi@onal  standards  are   agreed  to,  a  ques@on  is  what  context  will  you  have  to  make  decisions?     How  will  you  balance  technology,  consumers  and  business   requirements?      How  will  you  find  the  intersec@on  of  what  is  possible,  what  is  viable  and   what  is  desirable?     How  will  you  decide  which  jobs  to  be  done  are  more  likely  to  thrive  and   create  value  and  which  ones  are  likely  not  to  take  off?     These  are  the  types  of  ques@ons  I  have  been  working  on  for  some  @me   now  and  that  my  consultancy  specializes  in.     13