1.
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Nest: Build your connected home
Discover Nest through the eyes of
the 55 Business Model Patterns
Based on the St Gallen Business Model Navigator

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Did you know that 90% of the most
successful companies are based on
only 55 Business Model Patterns?
That means that innovation is mostly
built on the recombination of
already existing ideas.
Want to learn more about the
patterns and the process? Check out
this Slideshare

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Look at how Nest Innovated its Industry

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First, see how the business model of traditional
thermostat providers work
Who is their customer
 Private households and businesses who
seek for heating and climate control.
What are they selling
 Manual or programmable thermostats and
set of components for heating systems
and radiators.
How do they produce their offering
 High quality, technical excellence, broad
range of experience and expertise.
Why is their business profitable
 Producing and selling high quality products

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But nowadays
competition takes place between
business models
and not just
between products and
technologies

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Now, Meet Nest, the Company That Works in a
Business Ecosystem!
WHO is their customer
 Private households and businesses who seek for smart home
solutions.
 Energy provider and governments who focus on increasing
productivity and decreasing costs.

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WHAT are they selling
 Nest Learning Thermostat, Nest Protect smoke & carbon monoxide
alarm and Nest Cam, connected with and controllable from the users’
smart devices anywhere and anytime.

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HOW do they produce their offering
 Creating an ecosystem by collaborating with energy providers and
governments.
 Giving energy providers access to control households’ cooling system.
 Linking customers and energy providers.

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WHY is your business profitable
 Add-on and subscription-based pricing model.
 Compatibility between products.
 Incentives for customers with saving plans.

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But HOW did Nest innovate?

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#1 Add-on
HOW NEST DOES IT: Besides Nest
Thermostat, the customer can purchase
additional Nest products, which can be
monitored and controlled with the same
application. When purchasing a Nest Cam
you can buy an extra service for recoding
video data.

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#24 Leverage customer data
HOW NEST DOES IT: Nest gives energy
providers access to customer data if the
customer participates in the energy saving
program. Moreover, energy providers can
control Nest thermostats and regulate
temperature in order to prevent
shutdowns. In return the customer will
safe energy costs and receives price
reduction on Nest products.

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#32 Open business model
HOW NEST DOES IT: Nest creates an
ecosystem, in which it collaborates with
energy providers and governments in
order to maximize customers’ value and to
extend their business areas.

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#47 Solution Provider
HOW NEST DOES IT: With Nest you can
build your connected home. It provides a
full range of products and services to
design an entire smart home
infrastructure.

15.
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Use the Patterns for Your business!
Buy the BMI Pattern Cards @ Amazon
and visit www.bmilab.com to discover more about
Business Model Innovation!

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WHERE DOES IT ALL COME FROM?
Of course, there was a
lot of research behind
the pattern cards
The result of it is this
book to the right: The
Business Model
Navigator!
by Oliver Gassmann, Karolin
Frankenberger & Michaela Csik