Business model innovation

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Business model innovation

  1. 1. Business Model Innovation Leonardo Zangrando leonardo@learningstartup.org
  2. 2. Leonardo Zangrando, MBA, MEng ● Business Strategist ● People Development ● focus on Innovation & Entrepreneurship – shaping the organisation for innovation – providing the tools for innovation – ● bridging innovation strategy and implementation – ● training and coaching innovators Hands-on, active-learning seminars, workshops and courses on innovation & entrepreneurship for international organisations, in English, Italian and Spanish. ● Business Model Innovation ● Adaptive Development of Innovation Ideas ● Early Market Validation of Innovation Ideas ● Digital Disruption ● Social Selling ● ● ● I developed my strategy expertise since 1999 as consultant to global corporations on business strategy and sales & marketing strategy. In the same timeframe I took the opportunity to become involved in hands-on managerial projects for business innovation, acting as interim CTO, COO and CEO. I built my people development skills by training, assessing and coaching large B2B sales forces since 2008, on strategic selling and key account management. In the same area I recently developed training programs on digital disruption and social selling. Since 2010 I focused on innovation and entrepreneurship, pioneering the convergence of these 2 areas, and now I help companies reshape their innovation activities and structure building on an entrepreneurial model. In 2013 I developed the "Learning From Failure" management hack with Gary Hamel's MIX and the CIPD around the theme "Hacking HR for Adaptability Advantage."
  3. 3. What Does a Business Do? 
  4. 4. What Does a Business Do? A Business... Creates and Delivers Value to Customers
  5. 5. Value Proposition What Does a Business Do and For Whom
  6. 6. Value Proposition The Value Proposition lays at the Core of any Business Activity and explains WHAT the Business does and FOR WHOM
  7. 7. What is a Successful Value Proposition? 
  8. 8.  A Few Examples of Failed Products
  9. 9.  A Few Examples of Failed Products Other Failures? Why did they Fail?
  10. 10. Product / Market Fit A Successful Value Proposition Represents a Fit between the Product and the Market
  11. 11. The Other Value Perspectives From What Does a Business Do... ...to How Does It Do It 
  12. 12. The Other Value Perspectives what does the business do and for whom  Value Delivery  Value Creation Value Proposition  how Value reaches the customer how it creates Value  Value Capture how the business gets a portion of value
  13. 13. Business Innovation What is Innovation? 
  14. 14. Business Innovation How do we do Product Development? 
  15. 15. R+D+I Flow ● Research, Early Phases ● Development & Industr. – Experimentation – Planning – Assumption Validation – Forecasting
  16. 16. R+D+I Flow ● Research, Early Phases ● Development & Industr. – Experimentation – Planning – ●  Assumption Validation – Forecasting Why only for Value Creation? (Product Development) Why not also for Value Delivery? (Customer Development)
  17. 17. R+D+I Flow ● Research, Early Phases ●  Development & Industr. – Experimentation – Planning – Assumption Validation – Forecasting ● Why only for Value Creation? (Product Development) ● Why not also for Value Delivery? (Customer Development)
  18. 18. R+D+I Flow ● Research, Early Phases ●  Development & Industr. – Experimentation – Planning – Assumption Validation – Forecasting ● Why only for Value Creation? (Product Development) ● Why not also for Value Delivery? (Customer Development) ● And for Value Capture? (Business Modeling)
  19. 19. The Objectives of Business Innovation Create Value Deliver Value  Feasibility  Interest  Viability Profitable Repeatable Scalable Capture Value
  20. 20. The Tools of Business Innovation Create Value Deliver Value  Product  Customer Development Development  Business Modelling Capture Value
  21. 21. R+D+I Extended  Research  Phase Create  Value Feasibility Transfer  Questions  Value Interest Capture  Value Viability  Output  Skills  Development  Industrialisation What does it do? How is it made? How is it built?  Product Development For whom? How to get to them? How is the sale completed?  Customer Development Is it profitable? Is it repeatable? is it scalable?  Business Modelling Product/Market Fit Business Model Business Plan Entrepreneurship, Experimentation Management, Planning
  22. 22. R+D+I The Inventor's Curse  Research  Phase Create  Value Feasibility Transfer  Questions  Value Interest Capture  Value Viability  Output  Skills   Development  Industrialisation What does it do? How is it made? How is it built?  Product Development For whom? How to get to them? How is the sale completed?  Customer Development Is it profitable? Is it repeatable? is it scalable?  Business Modelling Product/Market Fit Business Model Business Plan Entrepreneurship, Experimentation Management, Planning
  23. 23. R+D+I The Manager's Curse  Research  Phase Create  Value Feasibility Transfer  Questions  Value Interest Capture  Value Viability  Output  Skills   Development  Industrialisation What does it do? How is it made? How is it built?  Product Development For whom? How to get to them? How is the sale completed?  Customer Development Is it profitable? Is it repeatable? is it scalable?  Business Modelling Product/Market Fit Business Model Business Plan Entrepreneurship, Experimentation Management, Planning
  24. 24. R+D+I The Manager's Curse  Development  Industrialisation  Research  Phase Create  Value Feasibility What does it do? How is it made? How is it built?  Product Development For whom? How to get to them? How is the sale completed?  Customer Development Is it profitable? Is it repeatable? is it scalable?  Business Modelling  Output Product/Market Fit Business Model Business Plan  Skills Entrepreneurship,  Experimentation Transfer  Questions  Value Interest Capture  Value Viability  Management, Planning
  25. 25. How to Avoid the Traps?  Research  Phase Create  Value Feasibility Transfer  Questions  Value Interest Capture  Value Viability  Output  Skills   Development  Industrialisation What does it do? How is it made? How is it built?  Product Development For whom? How to get to them? How is the sale completed?  Customer Development Is it profitable? Is it repeatable? is it scalable?  Business Modelling Product/Market Fit Business Model Business Plan Entrepreneurship, Experimentation Management, Planning
  26. 26. Iterative, Lean Approach ● Recognise the assumptions ● Experiment to validate the assumptions ● Learn from the experiment ● Update the assumptions in a better model
  27. 27. On What Should We Experiment?
  28. 28. The Law of Failure Most New Ideas Fail 
  29. 29. The Law of Failure ~90% of all mobile apps don’t make money ~80% of new products fail in the market 4 out of 5 startups lose investor money .... For truly innovative ideas the odds are even worse
  30. 30. One year: 24,543 new products* Failed Disappointed 16% Cancelled 37% Success 14% Star * source: Nielsen 27% 6% Total 100% 80 %
  31. 31. One year: 24,543 new products* Category Breakthrough Line or category extension “Me too” Others (seasonal, etc.) Total * source: Nielsen # of products 334 % of products 1.4% 1,705 6.9% 18,814 76.7% 3,690 15.0% 24,543 100%
  32. 32. the Law of Failure Most New Ideas Fail EVEN IF THEY ARE WELL EXECUTED
  33. 33. How to avoid it? Make sure you are building the right ‘it’ before you build ‘it’ right. 
  34. 34. Make sure you're building the right 'it'...  Research  Phase Create  Value Feasibility Transfer  Questions  Value Interest Capture  Value Viability  Output  Skills  Development  Industrialisation What does it do? How is it made? How is it built?  Product Development For whom? How to get to them? How is the sale completed?  Customer Development Is it profitable? Is it repeatable? is it scalable?  Business Modelling Product/Market Fit Business Model Business Plan Entrepreneurship, Experimentation Management, Planning
  35. 35. Pretotyping Ideas + opinions = TROUBLE Run early experiments to validate customer's interest 
  36. 36. IBM & Speech-to-Text Technology Dear Mr. Jones, In reply to your letter ...
  37. 37. IBM & Speech-to-Text Technology Dear Mr. Jones, In reply to your letter ...
  38. 38. IBM & Speech-to-Text Technology “We love the idea of speech-to-text and we’ll pay big $ for it if you can built it right.” Before
  39. 39. IBM & Speech-to-Text Technology “We love the idea of speech-to-text and we’ll pay big $ for it if you can built it right.” Before After
  40. 40. Pretotyping vs. Prototyping ● Pretotyping ● Prototyping – Investment: hours, days – Investment: days, weeks – Main Q: Would we use it? – Main Q: Can we build it? – Deliverable: [Working] pretotype – Deliverable: Working prototype
  41. 41. Pretotyping Techniques Mechanical Turk MVP Pinocchio One Night Stand Fake Door Impersonator
  42. 42. Business Model Assembling the 4 Value Perspectives
  43. 43. Value Proposition 
  44. 44. Customer Segments Value Proposition  which customers and users are you serving? which jobs do they really want to get done?
  45. 45. Value Proposition Customer Segments what are you offering them? what does it do for them? do they care?
  46. 46. Value Proposition Customer Segments  Value Delivery
  47. 47. Value Proposition Customer Segments  Value Delivery Channels how does each customer segment want to be reached? Through which interaction points?
  48. 48. Value Proposition Customer Relationship / Demand Creation Customer Segments Channels what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?
  49. 49. Value Proposition Customer Relationship / Demand Creation  Value Creation Channels Customer Segments
  50. 50. Value Proposition Customer Relationship / Demand Creation Customer Segments  Value Creation Key Resources Channels which resources underpin your business model? which assets are essential?
  51. 51. Key Activities Value Proposition Customer Relationship / Demand Creation Customer Segments  Value Creation Key Resources Channels which activities do you need to perform well in your business model? what is crucial?
  52. 52. Key Partners Key Activities Key Resources Value Proposition Customer Relationship / Demand Creation Customer Segments Channels which partners and suppliers does your model leverage? who do you need to rely on?
  53. 53. Key Partners Key Activities Value Proposition Key Resources Customer Relationship / Demand Creation Channels  Value Capture Customer Segments
  54. 54. Key Partners Key Activities Value Proposition Key Resources Customer Relationship / Demand Creation Channels what is the resulting cost structure? which key elements drive your costs? Cost Structure  Value Capture Customer Segments
  55. 55. Key Partners Key Activities Key Resources Value Proposition Customer Relationship / Demand Creation Customer Segments Channels what are customers really willing to pay for? how? are you generating transactional or recurring revenues? Cost Structure Revenue Streams
  56. 56. The Business Model Canvas Key Partners Key Activities Key Resources Cost Structure Value Proposition Customer Relationship / Demand Creation Channels Revenue Streams how the business gets a portion of value Customer Segments
  57. 57. from “Business Model Generation” by Alex Osterwalder Business Model A Business Model describes the rationale of how an organisation creates, delivers, and captures value 
  58. 58. Business Model T0 Hands-on Definition of Current BM 
  59. 59. Business Model T0 Discussion 
  60. 60. BM Generation Product / Market Fit ● Work in Groups on Multiple Ideas ● Group Brainstorming ● Plenary Discussion ● Group Fix 1st Iteration ● Group Validation Planning 
  61. 61. Product / Market Fit
  62. 62. BM Generation Other Value Perspectives ● Work in Groups on Multiple Ideas ● Select One Product / Market per Group ● Group Brainstorming ● Plenary Discussion ● Group Fix 1st Iteration ● Group Validation Planning 
  63. 63. Value Value Creation Delivery Value Capture
  64. 64. Thank you! Leonardo Zangrando, MEng, MBA leonardo@learningstartup.org +39 349 4627 186 www.learningstartup.org/blog

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