Disregard Business Gurus

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A SuperMinds 2014 Talk by Olivier Braet (iMinds - SMIT – VUB). How annoyed are you by the generalizations business gurus make about technological innovations? And how can we move away from the dreary world of airport management handbooks, that make grand and bland statements about how everything is about to change everywhere at the same time? Have they forgotten the insight that the future might be here, but it certainly isn’t evenly distributed? Without ignoring the profound impact that technological innovations are having on several industries, my presentation will showcase a sober look on industry disruptions, building on the case of educational games.

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Disregard Business Gurus

  1. 1. Ignore Gurus
  2. 2. Machines  will  be  capable,  within  20  years,   of  doing  any  work  a  man  can  do   —Herbert  Simon,  1956—   “ ”
  3. 3. Within  a  generaBon  …  the  problem   of  creaBng  ‘arBficial  intelligence’  will   substanBally  be  solved     —Marvin  Minsky,  1967—   “ ”
  4. 4.   From  Structured  best  business   pracBces  to  General  Business   Models  
  5. 5. •  Sample  of  educaBonal  games   •  Focus  on  revenue  models   –  Pay-­‐per-­‐download:  ‘Direct  revenues’,  $0.99  to  $3.99   –  Freemium  model:  ‘Indirect  revenues’  +  for-­‐pay  features)  
  6. 6. Centralized control Decentralized control Indirect revenues (advertising) Direct revenues Game Game Game Game Game Game Game Game Game Game Outlier
  7. 7. Companies  that  ignored  the  control-­‐ revenues  link  were  selected  away   Or?  Managers  imitated  successful   examples  from  their  industry.  
  8. 8. What  is  the  business  model  case,     taking  into  account  two  disBnct  groups?   Game  developers   want  to  earn  money   Parents  &  schools   want  to  teach  children  
  9. 9. BUSINESS  MODEL  SIMULATIONS   •  Parents  willingness  to  spend  is  relaBvely  high   =>  €84/Y/child  in  retail  market   •  Schools’  willingness  to  spend  is  relaBvely  low             =>  €2/year/child   •  360.000  Flemish  lower  grade  schoolchildren    
  10. 10. OPTIMISTIC:  180k  STUDENTS   03/06/14 10 €1.512.000 €360.000 €30.240 €1.841.760 €1.080.000 €432.000 €360.000 €21.600 €8.640 €1.841.760
  11. 11. REALISTIC:  90k  STUDENTS   €756.000 €180.000 €15.120 €920.880 €540.000 €216.000 €180.000 €10.800 €4.320 €920.880
  12. 12. PESSIMISTIC  PARENTS  +  OPTIMISTIC  SCHOOLS   €378.000 €360.000 €7.560 €730.440 €270.000 €108.000 €360.000 €5.400 €2.160 €730.440
  13. 13. OPTIMISTIC  PARENTS+  PESSIMISTIC  SCHOOLS   €1.512.000 €90.000 €30.240 €1.571.760 €1.080.000 €432.000 €90.000 €21.600 €8.640 €1.571.760
  14. 14.   Local  market  for  educaBonal  games  is   under  extreme  pressure  to  offer  high   quality  educaBonal  content  
  15. 15. 40%  of  the  Fortune  500  companies  in  2000   no  longer  existed  in  2010   —And  all  the  variaBons  on  this  theme—   “ ” What’s  the  average  company’s  10  year   survival  raBo?   29%  
  16. 16. Ignore Gurus, Trust yr fieldwork

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