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Webinar: Three levels of Business Models, Rita McGrath Slides


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Webinar: Three levels of Business Models, Rita McGrath Slides

  1. 1. // Learning from Habitual Entrepreneurs 1
  2. 2. PAGE 2 The cost to a customer of switching to another provider is relatively low The cost to a customer of switching to another provider once they have signed up with us is relatively high The model is based on individual transactions which must be re-purchased each time The model is based on a series of transactions (such as subscriptions or long term contracts) which are subject to renewal The user interface for the model is pretty much the same for all providers (for instance, an ATM interface) The user interface for the model is different for different providers meaning it is easier for users to learn one system and stick with it The benefits provided by the model are optional or discretionary The benefits provided by the model are required, specified in or mandatory There are few network effects in this business or we are a late mover We have the potential to create positive network externalities in this model This model solves the customers’ problem once and for all The customers’ problem is ongoing The model is arms-length or transactional The model establishes some kind of relationship The model has little impact on the customers’ experience or the impact is negative The model involves changing the customer experience significantly and the impact is positive The model operates on a standalone basis The model creates a platform others can use to accomplish their goals We create the offer The offer is to some extent co-created
  3. 3. // Discovery Driven Growth and the Flops File CargoLifter Webvan Revlon Vital Radiance PAX tire Microsoft Kin Phone Google Radio 3
  4. 4. //4 A very robust research finding • Different disciplines are required for exploring uncertain areas than you would use in a predictable situation • Assumption to Knowledge ratio • Cost, not rate
  5. 5. // Planning to learn at lowest possible cost • Define success before you start • Impose market and competitive discipline • Lay out clear operations specifications • Articulate and document assumptions • Plan to checkpoints • Used for startups, corporate ventures, services businesses, governments & NGO’s, IT projects, B2B businesses…anything with a high assumption: knowledge ratio 5
  6. 6. // Uncertainty / Cost Profile over time Range of Uncertainties (Risk) Checkpoints Investment Profile (Costs) 6
  7. 7. //// Toolkit now available! PAGE 7© 2017 Rita Gunther McGrath
  8. 8. If we don’t make small amounts of resources available for experimentation, our ventures get big before they get smart. @rgmcgrath