Business Ecosystem Design

1. Advanced Visual Business Modeling -or- How to »Prototype« a Business Ecosystem? Service Experience Camp Berlin, September 14th 2013 @Jan_Schmiedgen

2. Consumer Business-to-Business Everyone wants to become a “Platform Business”

4. We all love the Business Model Canvas 5 … and it’s manifold derivates! But they all have the same problem ...

5. ! Image Credits / Sources in order of appearance: Casadesus-Masanell, R., & Ricart, J. E. (2011). How to Design A Winning Business Model. Harvard Business Review, 89(1/2), 100–107. // Porter, M. E. (1996). What is Strategy? Harvard Business Review, (November - December). // Ouden, E. den. (2011). Innovation Design: Creating Value for People, Organizations and Society (1st ed.). Springer London. // Fjeldstad, Ø. D., & Stabell, C. B. (1998). Configuring Value for Competitive Advantage: On Chains, Shops, and Networks. Strategic Management Journal,, Vol 19, 413–437. // valuenetworksandcollaboration.com, 2011 // Tom Hulme (http://weijiblog.com/ startup-tools/) // Patrick Stähler (http://blog.business-model-innovation.com/tools/) // Johnson, M. W., Christensen, C. M., & Kagermann, H. (2008). Reinventing Your Business Model. Harvard Business Review, 86(12), 50–59. // Fraunhofer IAO (http://moby.iao.fraunhofer.de/) ! Choices & Consequences Activity Networks Value Flow Mapping for Ecosystems Value Configuration Perspective: Chains/Shops/Networks Tom Hulmes Canvas (IDEO) Patrick Stählers Canvas (Fluidmind) etc. Other »Scientific Conceptualisations« Fraunhofer IAO Canvas Core Value Proposition Complementary Offerings Supplying and Enabling Network Other Stakeholders Higher Margins via Apple Price Premium Lowest Production Costs Goods & Services Money & Credits Information Intangible Value High Volume and Planning Certainty Manufacturing Knowledge Reputation Hardware OEM's: e.g. Foxconn Official Accessory Manufacturers: e.g. Belkin Retail/Certified Partners: e.g. Gravis Microsoft, Google, etc. ??? IP royalties Seamless User Experience Enriched User Experience App Purchases Comission Sales Platform Apple New Business Ideas Developer Community Higher Margins : Apple Price Premium Broad Service Station Covering Technical and Sales Training Media Industries Digital Sales Channel with DRM and wide Spread Media Delivery ??? IP royalties / Commission Infrastructure Management Service Contract Technical Backend Providers: e.g. SAP Sponsoring / Discounts Apple on Campus Bulk Purchases Schools and Universities Reputation and Awareness Personal Data Price Premium (Hardware, Media and App Sales) Apple Communities Apple Users Software Developers: e.g. Adobe

6. ! Image Credits / Sources in order of appearance: Casadesus-Masanell, R., & Ricart, J. E. (2011). How to Design A Winning Business Model. Harvard Business Review, 89(1/2), 100–107. // Porter, M. E. (1996). What is Strategy? Harvard Business Review, (November - December). // Ouden, E. den. (2011). Innovation Design: Creating Value for People, Organizations and Society (1st ed.). Springer London. // Fjeldstad, Ø. D., & Stabell, C. B. (1998). Configuring Value for Competitive Advantage: On Chains, Shops, and Networks. Strategic Management Journal,, Vol 19, 413–437. // valuenetworksandcollaboration.com, 2011 // Tom Hulme (http://weijiblog.com/ startup-tools/) // Patrick Stähler (http://blog.business-model-innovation.com/tools/) // Johnson, M. W., Christensen, C. M., & Kagermann, H. (2008). Reinventing Your Business Model. Harvard Business Review, 86(12), 50–59. // Fraunhofer IAO (http://moby.iao.fraunhofer.de/) ! Choices & Consequences Activity Networks Value Flow Mapping for Ecosystems Value Configuration Perspective: Chains/Shops/Networks Tom Hulmes Canvas (IDEO) Patrick Stählers Canvas (Fluidmind) etc. Other »Scientific Conceptualisations« Fraunhofer IAO Canvas Core Value Proposition Complementary Offerings Supplying and Enabling Network Other Stakeholders Higher Margins via Apple Price Premium Lowest Production Costs Goods & Services Money & Credits Information Intangible Value High Volume and Planning Certainty Manufacturing Knowledge Reputation Hardware OEM's: e.g. Foxconn Official Accessory Manufacturers: e.g. Belkin Retail/Certified Partners: e.g. Gravis Microsoft, Google, etc. ??? IP royalties Seamless User Experience Enriched User Experience App Purchases Comission Sales Platform Apple New Business Ideas Developer Community Higher Margins : Apple Price Premium Broad Service Station Covering Technical and Sales Training Media Industries Digital Sales Channel with DRM and wide Spread Media Delivery ??? IP royalties / Commission Infrastructure Management Service Contract Technical Backend Providers: e.g. SAP Sponsoring / Discounts Apple on Campus Bulk Purchases Schools and Universities Reputation and Awareness Personal Data Price Premium (Hardware, Media and App Sales) Apple Communities Apple Users Software Developers: e.g. Adobe } Systemic representations

7. ! Image Credits / Sources in order of appearance: Casadesus-Masanell, R., & Ricart, J. E. (2011). How to Design A Winning Business Model. Harvard Business Review, 89(1/2), 100–107. // Porter, M. E. (1996). What is Strategy? Harvard Business Review, (November - December). // Ouden, E. den. (2011). Innovation Design: Creating Value for People, Organizations and Society (1st ed.). Springer London. // Fjeldstad, Ø. D., & Stabell, C. B. (1998). Configuring Value for Competitive Advantage: On Chains, Shops, and Networks. Strategic Management Journal,, Vol 19, 413–437. // valuenetworksandcollaboration.com, 2011 // Tom Hulme (http://weijiblog.com/ startup-tools/) // Patrick Stähler (http://blog.business-model-innovation.com/tools/) // Johnson, M. W., Christensen, C. M., & Kagermann, H. (2008). Reinventing Your Business Model. Harvard Business Review, 86(12), 50–59. // Fraunhofer IAO (http://moby.iao.fraunhofer.de/) ! Choices & Consequences Activity Networks Value Flow Mapping for Ecosystems Value Configuration Perspective: Chains/Shops/Networks Tom Hulmes Canvas (IDEO) Patrick Stählers Canvas (Fluidmind) etc. Other »Scientific Conceptualisations« Fraunhofer IAO Canvas Core Value Proposition Complementary Offerings Supplying and Enabling Network Other Stakeholders Higher Margins via Apple Price Premium Lowest Production Costs Goods & Services Money & Credits Information Intangible Value High Volume and Planning Certainty Manufacturing Knowledge Reputation Hardware OEM's: e.g. Foxconn Official Accessory Manufacturers: e.g. Belkin Retail/Certified Partners: e.g. Gravis Microsoft, Google, etc. ??? IP royalties Seamless User Experience Enriched User Experience App Purchases Comission Sales Platform Apple New Business Ideas Developer Community Higher Margins : Apple Price Premium Broad Service Station Covering Technical and Sales Training Media Industries Digital Sales Channel with DRM and wide Spread Media Delivery ??? IP royalties / Commission Infrastructure Management Service Contract Technical Backend Providers: e.g. SAP Sponsoring / Discounts Apple on Campus Bulk Purchases Schools and Universities Reputation and Awareness Personal Data Price Premium (Hardware, Media and App Sales) Apple Communities Apple Users Software Developers: e.g. Adobe

8. Apple’s Business Ecosystem (Excerpt) Core Value Proposition Complementary Offerings Supplying and Enabling Network Other Stakeholders ®® TM 9 Higher Margins via Apple Price Premium Lowest Production Costs Goods & Services Money & Credits Information Intangible Value High Volume and Planning Certainty Manufacturing Knowledge Reputation ??? IP royalties Seamless User Experience Enriched User Experience App Purchases Comission Sales Platform Apple Platform New Business Ideas Higher Margins : Apple Price Premium Broad Service Station Covering Technical and Sales Training Digital Sales Channel with DRM and wide Spread Media Delivery ??? IP royalties / Commission Infrastructure Management Service Contract Sponsoring / Discounts Apple on Campus Bulk Purchases Reputation and Awareness Personal Data Price Premium (Hardware, Media and App Sales)

9. Image Credit (in order of appearance): Allee, V. (2008). Value network analysis and value conversion of tangible and intangible assets. Journal of Intellectual Capital, 9(1), 5–24.; Design Thinkers Academy It is not like … It is more like ... 10 STAKEHOLDER MAPPING EXAMPLES OF STAKEHOLDER CUSTOMERSGOVERNMENT EMPLOYEES SUPPLIERS CREDITORS COMMUNITY WHO ARE THE STAKEHOLDERS? DATECOMPANY $ VALUE NETWORK MAPPING THE KEY RELATIONSHIPS BETWEEN STAKEHOLDERS VALUES MONEY POWER EXPOSURE EXPERIENCE LOVE REPUTATION RIGHTS ATTENTION TRUST SERVICE PRODUCT INFORMATION CREDITS EXAMPLE EXAMPLE DATECOMPANY VALUES MONEY POWER EXPOSURE EXPERIENCE LOVE REPUTATION RIGHTS ATTENTION TRUST SERVICE PRODUCT INFORMATION CREDITS EXAMPLE EXAMPLE Process Map, Net Map, Actors Map Service Ecology Map Value Network Analysis (VNA) Value Network/Ecosystem Mapping

10. 11 Your Challenge Ready for some action?

11. Core Value Proposition Other Stakeholders Just-at-time! Airspeed transportation: delivered to your window - when you want it and where you want it. last mile parcel delivery emergency pharmaceuticals Your Challenge: Call-a-Drone 12Image Credit: CC-licensed “Quadrocopter” from kaffeeringe → http://www.flickr.com/photos/kaffeeringe/8722017781/ pizza P2P-parcel scheduling air courier FLY TO ME

12. Exercise I: Collect Actors/Stakeholders 13 Compatibilty with VP (positive, neutral, negative) Inﬂuence (size of indicator) Title/Function of Actor Primary Motivations Investment Actors Role EXERC ISE 10:00MINUTES Time Horizon (throughput time)

13. 14 Core Value Proposition Complementary Offerings Supplying and Enabling Network Other Stakeholders Exercise II: Group Actors EXERC ISE 05:00MINUTES

14. Goods & Services Money & Credits Information Intangible Value Exercise III: Deﬁne Value Flows Goods & Services Money & Credits Information Intangible Value EXERC ISE 15:00MINUTES

15. Economic community supported by a foundation of interacting organizations and individuals - the 'organisms' of the business world. [...] Over time they co-evolve in their capabilities and roles, and tend to align themselves with the directions set by one or more central companies. 16 James F. Moore (1997) „ “

16. The Rise of Ecosystems New Rules for Value Creation

17. Value propositions should be crafted: as a reciprocal exchange of value; described in terms of perceived benefits or reduced costs; transparent about to whom that value should flow and how; perceived as a fair exchange of value; delivered over a time frame longer than a single transaction; often co-created through interaction between two or more parties; and, congruent with the relationship objectives set for a particular market. Contemporary Understanding of Value Propositions Ballantyne, Frow, Varey & Payne (2011) „ “ 18

18. Business Ecosystem? 19 “A value network model visualizes specific interactions within the network to provide a perspective for understanding value-creating roles and relationships, and to offer a dynamic view of how both financial and non-financial assets are converted into negotiable forms of value.” Elke den Ouden, Phillips Industry Consulting (2011) Image Credit: http://www.elkedenouden.com/AboutElke.html

19. Customer Supplier Godfather Competitor Intermediary Enabler Financier Provider of Content Provider of Services Provider of Systems Provider of Goods Marketing & Communications

20. Goods & Services Money & Credits Information Intangible Value Align and Balance Value Flows Goods & Services Money & Credits Information Intangible Value

21. Apple’s Business Ecosystem (Excerpt) 22 Core Value Proposition Complementary Offerings Supplying and Enabling Network Other Stakeholders Higher Margins via Apple Price Premium Lowest Production Costs Goods & Services Money & Credits Information Intangible Value High Volume Orders and Planning Certainty Manufacturing Knowledge Reputation Hardware OEM's: e.g. Foxconn Official Accessory Manufacturers: e.g. Belkin Inofficial Accessory Manufacturers Retail/Certified Partners: e.g. Gravis Microsoft, Google, etc. ??? IP royalties Seamless User Experience Enriched User Experience App Purchases Comission Sales Platform Apple Platform New Business Ideas Developer Community Higher Margins : Apple Price Premium Broad Service Station Covering Technical and Sales Training Media Industries Digital Sales Channel with DRM and wide Spread Media Delivery ??? IP royalties / Commission Infrastructure Management Service Contract Technical Backend Providers: e.g. SAP Sponsoring / Discounts Apple on Campus Bulk Purchases Schools and Universities Reputation and Awareness Personal Data Price Premium (Hardware, Media and App Sales) Apple Communities Apple Users Software Developers: e.g. Adobe Apple Store Logistic Partners: e.g. TNT, UPS IT-Infrastructure Partners: e.g. Akamai Content SaS Solutions Premium Services/ Software Purchases Personal Data Personal Data

22. Layers of a Value Web 23 Higher Margins via Apple Price Premium Lowest Production Costs Goods & Services Money & Credits Information Intangible Value High Volume and Planning Certainty Manufacturing Knowledge Reputation Hardware OEM's: e.g. Foxconn Ofﬁcial Accessory Manufacturers: e.g. Belkin Retail/Certiﬁed Partners: e.g. Gravis Microsoft, Google, etc. ??? IP royalties Seamless User Experience Enriched User Experience App Purchases Comission Sales Platform Apple Platform New Business Ideas Developer Community Higher Margins : Apple Price Premium Broad Service Station Covering Technical and Sales Training Media Industries Digital Sales Channel with DRM and wide Spread Media Delivery ??? IP royalties / Commission Infrastructure Management Service Contract Technical Backend Providers: e.g. SAP Sponsoring / Discounts Apple on Campus Bulk Purchases Schools and Universities Reputation and Awareness Personal Data Price Premium (Hardware, Media and App Sales) Apple Communities Apple Users Software Developers: e.g. Adobe Core Value Proposition Complementary Offerings Supplying and Enabling Network Other Stakeholders

23. Apple’s Business Ecosystem (Excerpt) Core Value Proposition Complementary Offerings Supplying and Enabling Network Other Stakeholders ®® TM 24 Higher Margins via Apple Price Premium Lowest Production Costs Goods & Services Money & Credits Information Intangible Value High Volume and Planning Certainty Manufacturing Knowledge Reputation ??? IP royalties Seamless User Experience Enriched User Experience App Purchases Comission Sales Platform Apple Platform New Business Ideas Higher Margins : Apple Price Premium Broad Service Station Covering Technical and Sales Training Digital Sales Channel with DRM and wide Spread Media Delivery ??? IP royalties / Commission Infrastructure Management Service Contract Sponsoring / Discounts Apple on Campus Bulk Purchases Reputation and Awareness Personal Data Price Premium (Hardware, Media and App Sales)

24. Virtuous Cycles 25 Higher Margins via Apple Price Premium Lowest Production Costs Goods & Services Money & Credits Information Intangible Value High Volume Orders and Planning Certainty Manufacturing Knowledge Reputation Hardware OEM's: e.g. Foxconn Official Accessory Manufacturers: e.g. Belkin Inofficial Accessory Manufacturers Retail/Certified Partners: e.g. Gravis Microsoft, Google, etc. ??? IP royalties Seamless User Experience Enriched User Experience App Purchases Comission Sales Platform Apple Platform New Business Ideas Developer Community Higher Margins : Apple Price Premium Broad Service Station Covering Technical and Sales Training Media Industries Digital Sales Channel with DRM and wide Spread Media Delivery ??? IP royalties / Commission Infrastructure Management Service Contract Technical Backend Providers: e.g. SAP Sponsoring / Discounts Apple on Campus Bulk Purchases Schools and Universities Reputation and Awareness Personal Data Price Premium (Hardware, Media and App Sales) Apple Communities Apple Users Software Developers: e.g. Adobe Apple Store Logistic Partners: e.g. TNT, UPS IT-Infrastructure Partners: e.g. Akama Content SaS Solutions Premium Services/ Software Purchases Personal Data Personal Data

25. 26 Virtuous Cycles Lowest Production Costs High Volume Orders and Planning Certainty Manufacturing Knowledge Reputation Hardware OEM's: e.g. Foxconn ??? IP royalties Seamless User Experience Enriched User Experience App Purchases Comission Sales Platform Apple Platform New Business Ideas Developer Community Higher Margins : Apple Price Premium Broad Service Station Covering Technical and Sales Training Digital Sales Channel DRM and wide Spre Media Delivery ??? IP royalties / Commission Infrastructure Management Service Contract ponsoring / Discounts Apple on Campus Bulk Purchases Reputation and Awareness Personal Data Price Premium (Hardware, Media and App Sales) Apple Users Content SaS Solutions ices/ hases Personal Data Personal Data

26. 26 Virtuous Cycles Lowest Production Costs High Volume Orders and Planning Certainty Manufacturing Knowledge Reputation Hardware OEM's: e.g. Foxconn ??? IP royalties Seamless User Experience Enriched User Experience App Purchases Comission Sales Platform Apple Platform New Business Ideas Developer Community Higher Margins : Apple Price Premium Broad Service Station Covering Technical and Sales Training Digital Sales Channel DRM and wide Spre Media Delivery ??? IP royalties / Commission Infrastructure Management Service Contract ponsoring / Discounts Apple on Campus Bulk Purchases Reputation and Awareness Personal Data Price Premium (Hardware, Media and App Sales) Apple Users Content SaS Solutions ices/ hases Personal Data Personal Data Generic virtuous loop of a business ecosystem Value of the core offer Value of the total offer Sales Profits Investment in the core innovation and capacity Investment in the business ecosystem

27. Value Flow Mapping in the Design Process 27 Analysis (Think) Concrete: Real World Abstract: Modeled World Synthesis (Make) OBSERVATIONS PRINCIPLES PLANS TESTS 1 2 3 4 5 6 7

28. Q&A /// Feedback

29. 29 STAY TUNED! www.uservalue.de @Jan_Schmiedgen

30. 37 Attributions “Gears” symbol by Dima Yagnyuk // "Type Desgin" symbol by Andrew J. Young // “Compass” symbol by Adam Whitcroft // “Refresh” symbol by Joris Hoogendoorn // “Pointer” symbol by ___Lo // “Speaker” symbol by Harold Kim // “Book” symbol by Ahmed Hamzawy // “Unlock” symbol by Ugur Akdemir // “Heart” symbol by John Caserta // “Like” symbol by Marwa Boukarim // “Letter” symbol by John Caserta // “Lock” symbol by Dave Tappy // “Cess” symbol by Alessandro Suraci // “Social Services” by Jack Biesek, Gladys Brenner, Margaret Faye, Healther Merrifield, Kate Keating, Wendy Olmstead, Todd Pierce, Jamie Cowgill, Jim Bolek // “Building” symbol by Antonis Makriyannis // “Brain” symbol by Arjun Adamson // “Building Block” symbol by Michael Rowe // “City” by inna belenkey // “Basket” symbol by Roman J. Sokolov // “Unlock” symbol by Ugur Akdemir // “Hand” symbol by Jakob Vogel as well as "Home" and "Umbrella" from The Noun Project collection. ------------------------------------------------------------------------------------------------------------------------------------------------------------ Some References this Workshop/Presentation was based on: Adner, R. Amazon vs. Apple: Competing Ecosystem Strategies. Harvard Business Review. Retrieved August 11, 2013, from http://blogs.hbr.org/cs/2012/03/amazon_vs_apple_competing_ecos.html. Brandenburger, A., & Nalebuﬀ, B. (1996). Co-Opetition. New York: Doubleday. Caulﬁeld, B. Apple’s Ecosystem. Forbes. Retrieved August 11, 2013, from http://www.forbes.com/2010/02/09/intel-nvidia-htc-technology-business-intelligence-apple.html. Dachis, J. Apple, a Love Note: The Power of an Ecosystem - Dachis Group. Dachis Group. Retrieved August 11, 2013, from http://dachisgroup.com/2010/01/apple-a-love-note-the-power-of-an-ecosystem/. McCann, J. It’s The Ecosystem, Stupid. subPrint Interactive. Blog, . Retrieved August 11, 2013, from http://subprint.com. Moore, J. F. (1997). The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems. New York: HarperBusiness. Moore, J. F. (2013). Shared Purpose: A thousand Business Ecosystems, a connected Community, and the Future. Ng, I. C. (2012). Value & Worth: Creating New Markets in the Digital Economy. Ng, I. C. L., & Smith, L. A. (2012). An Integrative Framework of Value. Review of Marketing Research, 9, 207–243. Ouden, E. den. (2011). Innovation Design: Creating Value for People, Organizations and Society (1st Edition.). Springer London. Senge, P. M. (2006). The Fifth Discipline: The Art and Practice of the Learning Organization. New York: Doubleday/Currency. and many more …

31. 38 About me … I am a Berlin-based innovation facilitator who helps organizations in strategically implementing service design, business model innovation and (branded) Ux methodologies, processes and tools. My work is mainly based on the discovery of shared value which I researched at Berlin University of Arts and Zeppelin University Friedrichshafen. Besides my advisory practice I am a »HPDTRP« research fellow at the Hasso-Plattner-Institute Potsdam, examining Design Thinkings level of diffusion in organizations worldwide. I’m also co-developing GlobalWasteIdeas.org, an idea- sharing and collective intelligence platform dedicated to catalyze innovative ways to deal with waste. @Jan_Schmiedgen

32. Design-driven strategic business planning 39Jan Schmiedgen // Fidicinstr. 41 // 10965 Berlin // GERMANY // +49 173 3 83 15 26 // kontakt@schmiedgen.eu

Business Ecosystem Design

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