design and business modelbusiness model innovation innovation & designCradle November 2012? 2012 How does one come up with successful business models? Jeﬀ Bezos
Larry Page & Sergey Brin Lei Jun (雷 ) Xiaomi (小米科技) ? what do these examples have in common?
1 2 they focused on product innovation alone they simply copied they empower the from competitors product through the they invented a new business model business model3 123 they could prove in advance that the model would work they had to take some risk and experiment going beyond business going beyond design going beyond testing product copying waiting model innovation thinking competitors models for proof
businessmodel 1 ? discuss with your seat neighbor what is the business model of Nespresso ? discuss with your seat neighbor what a business model is
customer segment Business Model Canvas deﬁnes the different groups of people or organizations the company aims to help with getting a job done images by JAM value proposition distribution channeldescribes the bundle of products and services that create value outlines the customer touch points through which the company reach the customerfor a speciﬁc customer segments segments to communicate and deliver a value proposition images by JAM images by JAM
customer relationship revenue streamdescribes how an organization gets, keeps, and grows each customer segment and represents the type of revenues an organization generateswhat type of relationships it entertains with each of them from each customer segment for a speciﬁc value proposition images by JAM images by JAM key resources key activitiesdescribes the most important assets, capabilities and know-how required present the most important tasks and processes a company must performto make a business model work to make its business model work images by JAM images by JAM
key partners cost structureoutlines the network of suppliers and partners that describes all costs incurred to operate a business modelleverage the business model images by JAM images by JAM The Business Model Canvas customer key activities value proposition relationships KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES PROPOSITION RELATIONSHIP SEGMENT key customer partners segments KEY DISTRIBUTION RESOURCES CHANNEL COST REVENUES cost revenue structure key distribution streams resources channels 32 images by JAM
HARDWARE DIGITAL DIGITAL DIGITAL MANUFACTURER HUB LIFESTYLE PLATFORM 1998 2001 2007 2010http://www.businessmodelgeneration.com ? What was apple’s business model for the iPod?
1 buzz group http://www.ﬂickr.com/photos/joeshlabotnik/2294656527/ ? describe the Nespresso’sbusiness model using the canvas
RESULTS average growth of 30% p.a. since 2000in 2011, 3 billion CHF annual but Nespresso almost failed in 1987 revenue with 1 product line
1diﬀerentiate business model KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES PROPOSITION RELATIONSHIP SEGMENT R&D DEVELOPMENT HARDCORE HIGH- GAMERS NCE PERFORMA CONSOLE IBM KEY DISTRIBUTION RESOURCES CHANNEL GAME CONSOLE AUDIENCE DEVELOPERS ENGINEERING COST REVENUES CONSOLE SUBSIDIES ROYALTIES E HARDWAR LOSS SALES AT
2006 business model KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES PROPOSITION RELATIONSHIP SEGMENT KEY DISTRIBUTION RESOURCES CHANNEL COST REVENUES[source: art by Nintendo] take-away business model 1 KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES PROPOSITION RELATIONSHIP SEGMENT new untapped R&D market CASUAL DEVELOPMENT GAMERS FAMILY focusing on product innovation is CONSOLE IBM KEY DISTRIBUTION RESOURCES low cost CHANNEL easier ENGINEERING CONSOLE AUDIENCE differentiation GAME DEVELOPERS not enough, it is better to empower GAME it through a business model operations CHEAP PMENT DEVELO COST COST REVENUES CONSOLE SUBSIDIES ABLE PROFIT ROYALTIES E HARDWAR SALES revenues from both sides
design analytical intuitive 2thinking thinking thinking design g thinkin1 DEEP DIVE
2 CUSTOMER ? INSIGHTS what does it means for business models?analyze from the customer perspective ... Day Month Year No. Rank each gain according to its relevance to your customer. Is it substantial or is it insignificant? For each gain indicate how often it occurs. KEY KEY VALUE CUSTOMER CUSTOMER Rank each gain your products and services create according to its relevance to your customer. Is it substantial or insignificant? For each gain indicate how often it occurs.PARTNERS ACTIVITIES PROPOSITION RELATIONSHIP SEGMENT Describe how your products and services create customer gains. Describe the benefits your customer expects, desires or would be surprised by. How do they create benefits your customer expects, desires or would be surprised This includes functional utility, social gains, positive emotions, and cost savings. AN ACTIVIT by, including functional utility, social gains, positive emotions, and cost savings? Y List all the products and services your value proposition is built around. Describe what a specific customer segment is trying to get done. It could be the tasks they are trying to perform and complete, the problems they are trying to solve, or the Which products and services do you offer that help your customer get either a needs they are trying to satisfy. functional, social, or emotional job done, or help him/her satisfy basic needs? RELATIONSHI Which ancillary products and services help your customer perform the roles of: P ANOTHER ACTIVITY Besides trying to get a core job done, your customer performs ancillary jobs in differ- Products and services may either by tangible (e.g. manufactured goods, face-to- ent roles. Describe the jobs your customer is trying to get done as: A VALUE face customer service), digital/virtual (e.g. downloads, online recommendations), A CUSTOMER intangible (e.g. copyrights, quality assurance), or financial (e.g. investment funds, KEY DISTRIBUTION financing services).A PARTNER N PROPOSITIO TARGET Rank all products and services according to their importance to your customer. Describe how your products and services alleviate customer pains. How do they Describe negative emotions, undesired costs and situations, and risks that your Are they crucial or trivial to your customer? eliminate or reduce negative emotions, undesired costs and situations, and risks customer experiences or could experience before, during, and after getting the your customer experiences or could experience before, during, and after getting job done. RESOURCES CHANNEL the job done? Rank each job according to its significance to your customer. Is it crucial or is it trivial? For each job indicate how often it occurs. ANOTHER VALUE PROPOSITIO Rank each pain according to the intensity it A RESOURCE N represents for your customer. Is it very intense or is it very light.? A CHANNEL For each pain indicate how often it occurs. Rank each pain your products and services kill according to their intensity for your customer. Is it very intense or very light? For each pain indicate how often it occurs. Risks your customer experiences or could experience before, during, and after getting the job done? COST REVENUES Create one for each Customer Segment in your Business Model A REVENUE Copyright of Business Model Foundry GmbH COST value proposition canvas Designed by: Produced by: STREAM Business Model Foundry GmbH Stattys GmbH Kalkbreitestrasse 71, Weissbadstrasse 14 8003 Zürich 9050 Appenzell www.businessmodelgeneration.com www.stattys.com
3 MULTIPLE MODELS [source: Sony Pictures] [source: Sony Pictures]
[source: Sony Pictures][source: flickr] architecture
? “if you freeze to an idea too quickly, you fall in Jim Glymph, ” love with it ... Gehry Partner what does it means for business models?prototyping 72
74 take-away 2don’t fall in love with your ﬁrst idea, because it will becomediﬃcult to continue exploring
you get ... 2buzz group + business model KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES PROPOSITION RELATIONSHIP SEGMENTdesign a business model using those two resources KEY RESOURCES DISTRIBUTION CHANNEL COST REVENUES
1 3 CUSTOMER DEVELOPMENTa business model might look ... set of hypothesesgreat on paper... KEY PARTNERS KEY ACTIVITIES VALUE PROPOSITION CUSTOMER RELATIONSHIP CUSTOMER SEGMENT GUESS GUESS GUESS GUESS KEY GUESS DISTRIBUTION GUESS RESOURCES CHANNEL GUESS GUESS GUESS GUESS COST REVENUES GUESS GUESS GUESS .. but after all it is only a...
“ there are no facts in the building... so get the hell out and talk to customers ” Steve Blank entrepreneur & author test each hypothesis ... adapt the business model until you can prove it works only then should you build your company or launch the project, else you’ll risk...customer customer customer companydiscovery validation creation building pivot
take-awayburning your cash while searching 3for a business model until it’s in the market there is no proof that even the best business model on paper will work ? where is solar energy particularly useful?
Jigar Shah in the context of shopping centers 106 1 ? KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES PROPOSITION RELATIONSHIP SEGMENT INSTALL PANELS LONG TERM CUSTOMER RELATIONS What could be a scalable ACQUISITION L MID- TO SOLAR PANEON LARGE PANEL INSTALLATI ORG ZA ANI TIONS MANUFACTURERSbusiness model for SunEdison ? KEY DISTRIBUTION RESOURCES CHANNEL SOLAR EXPERTS SALES FORCE PATENTS COST REVENUES PURCHASING FEE
?why don’t the retail stores and shopping centers switch to solar energy? why sho so do n ppin lar ’t th g en e e re cen ters rgy ? tail stor sw i tch es a to nd 111 ? what if we gave the panels away for free to eliminate the hurdle of upfront investment
2 ? KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES PROPOSITION RELATIONSHIP SEGMENT INSTALL & E MANAG TIONS INSTALLA ACQUIRE PPAS POWER but how to ﬁnance the PULAR PANEL MID- TO LA SORCHASING ORG ZA RGE ANI TIONS AGREEMEN ON PANEL INSTALLATI TSMANUFACTURERS KEY DISTRIBUTION RESOURCES SOLAR CHANNEL upfront investment RCE EXPERTS SALES FO SOLAR ENERGY INSTALLATI ONS COST REVENUES NG & INSTALLI MANAGING S ACQUIRING STALLATI ON REGU IN LAR PPAS PPA PAYME NTS 3 KEY PARTNERS KEY ACTIVITIES VALUE PROPOSITION CUSTOMER RELATIONSHIP CUSTOMER SEGMENT INSTALL & E MANAG TIONS INSTALLA ACQUIRE PACKA PPAS GE & SELL PPAS MID- TO LA RGE POWER ORG ZA ANI TIONS PURCHASING AGREEMENTS KEY DISTRIBUTION RESOURCES CHANNEL SOLAR RCE SALES FO the nce EXPERTS ina SOLAR INSTITUT IONAL to f e nt ENERGY LOW-RISK INVESTMENT & PRIVAT S E how stm INSTALLATI but nve ONS RETURN FINANC INVESTOR nt i IAL pf ro INSTITUT u POOL OF PPAS IONS COST REVENUES NG & INSTALLI ACQUIRIN INVESTMENT MANAGING S G DEVELOPM TION ACQUIRING INVESTOR FEE MONITORI ENT & INSTALLA S REGU NG FE LA PAYME PPA R E PPAS NTS 115
SunEdison is now the SunEdison bought in ’09 by largest provider of solar MEMC Electronic Materials power in the US for USD 200 million thank you ... BusinessModelGeneration.com firstname.lastname@example.org design testing model thinking models