Is your business model ready for the future?

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At the Endeavor Summit 2013 in San Francisco we presented a way to design your business model for the future.

Is your business model ready for the future?

  1. 1. Is your businessmodel ready forthe future?Endeavor San Francisco, June 21st 2013Lisa Kay Solomon and Patrick van der Pijl
  2. 2. @patrickpijl@lisakaysolomon
  3. 3. WARNING!
  4. 4. IT’SFRIDAY
  5. 5. AND WE WILL WORKHARD THE NEXTTWO HOURS!
  6. 6. WHAT WE DO IN 2HOURS TIMETODAY?
  7. 7. DESIGNING BETTER BUSINESSESTraditional business models aredead…
  8. 8. We need new tools…
  9. 9. We need new skills and mindsets…
  10. 10. And stop writing business plans!
  11. 11. FIRST ANINTRODUCTION
  12. 12. DESIGNING BETTER BUSINESSES
  13. 13. DESIGNING BETTER BUSINESSES
  14. 14. SON OF..
  15. 15. DESIGNING BETTER BUSINESSES
  16. 16. DESIGNING BETTER BUSINESSES
  17. 17. DESIGNING BETTER BUSINESSES
  18. 18. DESIGNING BETTER BUSINESSES
  19. 19. DESIGNING BETTER BUSINESSES
  20. 20. LET’S CHANGE THEBUSINESS MODEL OFTHE PUBLISHINGINDUSTRY!
  21. 21. In November 2008 we started anonline platform
  22. 22. Every participant paid 24 USD
  23. 23. $24.
  24. 24. $36.
  25. 25. $54.
  26. 26. $81.
  27. 27. $243.
  28. 28. so why did people participate andpay??!
  29. 29. people love being trendy & want to bethe first
  30. 30. people want to be part of somethingBIGGER and prove it
  31. 31. and it’s all about communities (ofpractitioners or passionates)
  32. 32. + 600.000 books+ 26 translations♯
  33. 33. WE NEED TORETHINK THE WAYWE DO BUSINESS!
  34. 34. TODAY…
  35. 35. …WE SEE FORCESWE HAVEN’T SEENBEFORE…
  36. 36. …I CALL THEMNEW RULESOF THE BUSINESSGAME.
  37. 37. DRIVER #1
  38. 38. SUSTAINABILITY
  39. 39. DESIGNING BETTER BUSINESSES
  40. 40. Driver #2
  41. 41. CREDIT CRISIS
  42. 42. DESIGNING BETTER BUSINESSES
  43. 43. DESIGNING BETTER BUSINESSES
  44. 44. Driver #3
  45. 45. “IT’S MY TURN”ECONOMY
  46. 46. UPCOMINGMARKETS
  47. 47. DESIGNING BETTER BUSINESSES
  48. 48. OR MARKETS THATCAME UP?
  49. 49. DESIGNING BETTER BUSINESSES
  50. 50. Driver #4
  51. 51. DIFFERENTCUSTOMERBEHAVIOR
  52. 52. generation  y  
  53. 53. Driver #5
  54. 54. THE ONLINEREVOLUTION
  55. 55. Driver #6
  56. 56. TECHNOLOGY
  57. 57. SOME EXAMPLES OFBUSINESS MODELSWE SEE RIGHTNOW…
  58. 58. RE-IMAGINATIONNEWS ANDINFORMATIONFLOW…
  59. 59. From reporters...
  60. 60. …to twitter
  61. 61. RE-IMAGINATION OFBOOKS
  62. 62. From books...!
  63. 63. …to kindle
  64. 64. RE-IMAGINATION OFCALLING A CAB
  65. 65. From waiting in the rain...
  66. 66. …to a single push of a button
  67. 67. RE-IMAGINATION OFVIDEO
  68. 68. From video store...
  69. 69. …to youtube
  70. 70. RE-IMAGINATION OFNAVIGATION
  71. 71. From map...
  72. 72. …to navigon
  73. 73. SO...
  74. 74. DE WORLD HASREALLY CHANGED.
  75. 75. BUT DO YOU SEETHIS ALSO?
  76. 76. NEW PROBLEMS…
  77. 77. REQUIRE NEW TOOLS
  78. 78. REQUIRE NEWSKILLS
  79. 79. REQUIRE NEWMINDSETS
  80. 80. SO WHAT ARE NEWTOOLS?
  81. 81. WHAT IS ABUSINESS MODEL?
  82. 82. DESIGNING BETTER BUSINESSES
  83. 83. WHAT AREBUSINESS MODELS?
  84. 84. DESIGNING BETTER BUSINESSES
  85. 85. IMAGINE(BOARDROOM)CONVERSATIONS…
  86. 86. CLAYTONCHRISTENSEN
  87. 87. WE NEED NEWTOOLS TOUNDERSTAND ANDCRAFT NEWBUSINESS MODELS
  88. 88. A business model describesthe rationale of how anorganization creates, deliversand captures valueDefinition_Business Model
  89. 89. BUSINESS MODELCANVASTHE
  90. 90. BuildingBlocks9
  91. 91. Who is my customer?!images by JAM!
  92. 92. What is my value proposition?!images by JAM!
  93. 93. What channels will I use?!images by JAM!
  94. 94. What relationship do I entertain?!images by JAM!
  95. 95. What is my revenue stream?!images by JAM!
  96. 96. What are my key resources?!images by JAM!
  97. 97. What are the key activities?!images by JAM!
  98. 98. Who are my key partners?!images by JAM!
  99. 99. How does the cost structure look like?!images by JAM!
  100. 100. customersegments!keypartners!coststructure!revenuestreams!distributionchannels!customerrelationships!keyactivities!keyresources!valueproposition!images by JAM!
  101. 101. Let us look at the business modelof Nespresso
  102. 102. OFFERDISTRIBUTIONCHANNELSCUSTOMERRELATIONSHIPSCUSTOMERSEGMENTSREVENUE STREAMSCOST STRUCTUREKEYACTIVITIESPARTNERNETWORKKEYRESOURCESThe Business Model of NespressoHouseholdsRetailMailOrderNespressoClubProductionB2CDistribution MarketingB2CDistributionProduction MarketingMachineManufacturer1 x MachineSalesRepetitivePad SalesBusinessCallCenterNespressoStoresNespresso.comNespressoMachinesNespressoPadsPatents BrandCoffeeProductionFacilitiesDistributionChannels
  103. 103. Partners! Proposition! Relation! Customers!Channels!Activities!Resources!Costs! Revenues!
  104. 104. WHAT ABOUT YOURBUSINESS MODEL?
  105. 105. “What does your currentbusiness model look like?”Interview your neighbor and define his orher current business model. Spend 10minutes each.
  106. 106. OFFERDISTRIBUTIONCHANNELSCUSTOMERRELATIONSHIPSCUSTOMERSEGMENTSREVENUE STREAMSCOST STRUCTUREKEYACTIVITIESPARTNERNETWORKKEYRESOURCESThe Business Model of ConsultingAny clientHours High ratesBlahBlahBlahBlahBlahReports
  107. 107. VALUEPROPOSITION    What  customer  needs  do  we  satisfy?  What  problem  do  we  help  our  customers  solve?    What  advantages  do  our  products  and  services  provide  our  customers  with?    What  products  and  services  do  we  deliver  to  our  customers?  CHANNELS  Through  what  channels  do  we  deliver  our  products  and  services?  CUSTOMERRELATIONSHIPS  What  kind  of  relationship  do  we  maintain  with  our  customers?  Personal  contact?  Automatic?  Self-­‐service?    CUSTOMERSEGMENTS  Who  is  our  customer?  For  whom  do  we  create  value?    Can  we  distinguish  different  customer  segments?  REVENUE STREAMS  What  revenue  streams  do  we  generate?    What  is  the  size  of  each  revenue  stream?      COST STRUCTURE  What  are  the  inherent  costs  in  our  current  business  model?    What  is  the  size  of  each  cost?  KEYACTIVITIES  What  type  of  key  activities  do  we  perform?    KEYPARTNERS    Who  are  our  key  partners?    What  is  our  motivation  to  work  with  partners?    What  key  resources  do  we  acquire  through  partners?    What  key  activities  do  our  partners  perform?  KEYRESOURCES  What  key  resources  does  our  proposition  require?      Physical?  Intellectual?  Human?  Financial?  CURRENT BUSINESS MODEL  
  108. 108. “WHAT DOES YOURCURRENT BUSINESS MODELLOOK LIKE?”INTERVIEW YOUR NEIGHBOR AND DEFINEHIS OR HER CURRENT BUSINESS MODEL.SPEND 10 MINUTES EACH.
  109. 109. SO NOW YOU HAVEPUT YOUR MODELTOGETHER…
  110. 110. IS IT READY FOR THEFUTURE?
  111. 111. LETS LOOK INTO THEBUSINESS MODELMECHANICS…
  112. 112. DEF: BUSINESS MODEL MECHANICSTHE INNER WORKINGS OF ANORGANIZATION’S BUSINESS MODEL.HOW THE BUILDING BLOCKS OF ABUSINESS MODEL WORK TOGETHERTO PRODUCE A BETTER OUTCOMEsource: www.strategyzer.com
  113. 113. 6 QUESTIONSHOW DO YOU PERFORM ON A SCALE FROM 0 TO 10?0 102 4 6 8source: www.strategyzer.com
  114. 114. SWITCHINGCOSTS1
  115. 115. MECHANICS:SWITCHING COSTSHOW EASY OR HARD IS IT FOR YOURCUSTOMER TO SWITCH TO ANOTHERCOMPANY?source: www.strategyzer.com
  116. 116. EXAMPLEIPOD
  117. 117. What are the most important costs inherent in our business model?Which Key Resources are most expensive?Which Key Activities are most expensive?Through which Channels do our Customer Segmentswant to be reached?How are we reaching them now?How are our Channels integrated?Which ones work best?Which ones are most cost-efficient?How are we integrating them with customer routines?For what value are our customers really willing to pay?For what do they currently pay?How are they currently paying?How would they prefer to pay?How much does each Revenue Stream contribute to overall revenues?For whom are we creating value?Who are our most important customers?What type of relationship does each of our CustomerSegments expect us to establish and maintain with them?Which ones have we established?How are they integrated with the rest of our business model?How costly are they?What value do we deliver to the customer?Which one of our customer’s problems are we helping to solve?What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?What Key Activities do our Value Propositions require?Our Distribution Channels?Customer Relationships?Revenue streams?Who are our Key Partners?Who are our key suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?Day Month YearNo.This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.RetailSwitchingcostsRecurringtransactionalsalesContentrevenuesMass MarketsItunessoftwareIPOD, 1000songs in apocketHard &softwareinnovationIpod (switching costs)source: www.strategyzer.com
  118. 118. MECHANICS:SWITCHING COSTSHOW DO YOU PERFORM ON A SCALE FROM 0 TO 10?0 102 4 6 8source: www.strategyzer.com
  119. 119. RECURRINGREVENUES2
  120. 120. MECHANICS:RECURRING REVENUESIS EVERY SALES A NEW EFFORT(TRANSACTIONAL) OR WILL ITRESULT IN FOLLOW-UP REVENUESAND PURCHASES?source: www.strategyzer.com
  121. 121. EXAMPLENESPRESSO
  122. 122. What are the most important costs inherent in our business model?Which Key Resources are most expensive?Which Key Activities are most expensive?Through which Channels do our Customer Segmentswant to be reached?How are we reaching them now?How are our Channels integrated?Which ones work best?Which ones are most cost-efficient?How are we integrating them with customer routines?For what value are our customers really willing to pay?For what do they currently pay?How are they currently paying?How would they prefer to pay?How much does each Revenue Stream contribute to overall revenues?For whom are we creating value?Who are our most important customers?What type of relationship does each of our CustomerSegments expect us to establish and maintain with them?Which ones have we established?How are they integrated with the rest of our business model?How costly are they?What value do we deliver to the customer?Which one of our customer’s problems are we helping to solve?What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?What Key Activities do our Value Propositions require?Our Distribution Channels?Customer Relationships?Revenue streams?Who are our Key Partners?Who are our key suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?Day Month YearNo.This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.HouseholdsRetailRepetitivePad SalesDirect salesNespressoMachinesNespressoPadsPatentsNespresso (recurring)source: www.strategyzer.com
  123. 123. MECHANICS:RECURRING REVENUESHOW DO YOU PERFORM ON A SCALE FROM 0 TO 10?0 102 4 6 8source: www.strategyzer.com
  124. 124. EARN BEFOREYOU SPEND3
  125. 125. MECHANICS:EARN BEFORE YOU SPENDARE YOU EARNING MONEY BEFOREYOU ARE SPENDING IT (E.G. FORPRODUCTION, PLATFORMS ETC.)?source: www.strategyzer.com
  126. 126. EXAMPLEBMGEN
  127. 127. source: www.strategyzer.com
  128. 128. MECHANICS:EARN BEFORE YOU SPENDHOW DO YOU PERFORM ON A SCALE FROM 0 TO 10?0 102 4 6 8
  129. 129. GAME CHANGINGCOSTSTRUCTURE4
  130. 130. MECHANICS:GAME CHANGING COSTSTRUCTUREIS YOUR COST STRUCTURESUBSTANTIALLY DIFFERENT ANDBETTER THAN THAT OFCOMPETITORS?source: www.strategyzer.com
  131. 131. EXAMPLESKYPE
  132. 132. MECHANICS:GAME CHANGING COSTSTRUCTUREHOW DO YOU PERFORM ON A SCALE FROM 0 TO 10?0 102 4 6 8source: www.strategyzer.com
  133. 133. GETTINGOTHERSTO DOTHE WORK5
  134. 134. MECHANICS:GETTING OTHERS TO DO THEWORKHOW MUCH DOES YOUR BUSINESSMODEL GET CUSTOMERS OR THIRDPARTIES TO CREATE VALUE FOR YOU?source: www.strategyzer.com
  135. 135. EXAMPLEFACEBOOK
  136. 136. MECHANICS:GETTING OTHERS TO DO THEWORKHOW DO YOU PERFORM ON A SCALE FROM 0 TO 10?0 102 4 6 8source: www.strategyzer.com
  137. 137. SCALABILITY6
  138. 138. MECHANICS:SCALABILITYHOW RAPIDLY AND HOW EASILY CANYOU GROW YOUR BUSINESS MODELWITHOUT HITTING ROADBLOCKS (E.G.INFRASTRUCTURE, CUSTOMERSUPPORT ETC.)source: www.strategyzer.com
  139. 139. EXAMPLEDINERS CLUB
  140. 140. source: www.strategyzer.com
  141. 141. What are the most important costs inherent in our business model?Which Key Resources are most expensive?Which Key Activities are most expensive?Through which Channels do our Customer Segmentswant to be reached?How are we reaching them now?How are our Channels integrated?Which ones work best?Which ones are most cost-efficient?How are we integrating them with customer routines?For what value are our customers really willing to pay?For what do they currently pay?How are they currently paying?How would they prefer to pay?How much does each Revenue Stream contribute to overall revenues?For whom are we creating value?Who are our most important customers?What type of relationship does each of our CustomerSegments expect us to establish and maintain with them?Which ones have we established?How are they integrated with the rest of our business model?How costly are they?What value do we deliver to the customer?Which one of our customer’s problems are we helping to solve?What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?What Key Activities do our Value Propositions require?Our Distribution Channels?Customer Relationships?Revenue streams?Who are our Key Partners?Who are our key suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?Day Month YearNo.This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.Salesmen7%transactioncosts3 USD annualfeeRestaurants(14 initially inNY)Credit inseveralrestaurantsAccess toclients andloyaltyRestaurantsthat acceptcreditcardsDiners club (scalability)source: www.strategyzer.com
  142. 142. MECHANICS:SCALABILITYHOW DO YOU PERFORM ON A SCALE FROM 0 TO 10?0 102 4 6 8source: www.strategyzer.com
  143. 143. WHAT IS YOURSCORE?
  144. 144. WHAT ARE THEMECHANICS YOUWANT TO WORK ON?
  145. 145. LEARNINGS
  146. 146. YOU CAN ASSESSAND IMPROVE YOURBUSINESS MODEL BYASKING 6 QUESTIONSsource: www.strategyzer.com
  147. 147. A GREAT BUSINESSMODEL ALONE IS NOTENOUGH - YOU NEEDMARKET TRACTIONsource: www.strategyzer.com
  148. 148. BY IMPROVING YOURBUSINESS MODELMECHANICS YOU ARELIKELY TOOUTCOMPETE OTHERSsource: www.strategyzer.com
  149. 149. SO WE NEED NEWTOOLS…
  150. 150. AND WE NEED NEWSKILLS…
  151. 151. WE NEED NEWMINDSETS…
  152. 152. WE NEED THINK ANDACT LIKEDESIGNERS
  153. 153. OBSERVE1
  154. 154. Clayton Christensen
  155. 155. WHEREVER YOU LOOKTHAT’S WHAT YOU SEE.JERRY SEINFELD
  156. 156. THINKVISUALLY2
  157. 157. DRAWING IS THENEW WRITING
  158. 158. EYES, PENCILS AND THE HANDMAY BE TOOLS OF THE PAST,…I BELIEVE THEY ARE TOOLSOF THE FUTURE.John Maeda, RISD
  159. 159. DESIGNING BETTER BUSINESSES
  160. 160. “The Wall is the New Desk”Dave Gray CEO XPLANE1!
  161. 161. … but that is not enough
  162. 162. IDEATE3
  163. 163. DESIGNING BETTER BUSINESSES
  164. 164. VALUEPROPOSITION    CHANNELS  CUSTOMERRELATIONSHIPS  CUSTOMERSEGMENTS    REVENUE STREAMS    COST STRUCTUREKEYACTIVITIES    KEYPARTNERS      KEYRESOURCES  CURRENT BUSINESS MODEL  
  165. 165. VALUEPROPOSITION    CHANNELS  CUSTOMERRELATIONSHIPS  CUSTOMERSEGMENTS    REVENUE STREAMS    COST STRUCTUREKEYACTIVITIES    KEYPARTNERS      KEYRESOURCESCURRENT BUSINESS MODEL  
  166. 166. VALUEPROPOSITION    CHANNELS  CUSTOMERRELATIONSHIPS  CUSTOMERSEGMENTS    REVENUE STREAMS    COST STRUCTUREKEYACTIVITIES    KEYPARTNERS      KEYRESOURCES  CURRENT BUSINESS MODEL  
  167. 167. VALUEPROPOSITION    CHANNELS  CUSTOMERRELATIONSHIPS  CUSTOMERSEGMENTS    REVENUE STREAMS    COST STRUCTUREKEYACTIVITIES    KEYPARTNERSKEYRESOURCES  CURRENT BUSINESS MODEL  
  168. 168. YOU NEED TO BEABLE TO JUGGLEWITH BUSINESSMODELS
  169. 169. PROTOTYPE4
  170. 170. the past was aboutchoosing solutionsthe future is aboutgenerating options
  171. 171. Frank Gehry
  172. 172. 8 PROTOTYPES
  173. 173. MAKERSMIND5
  174. 174. Chris Anderson
  175. 175. FORESEEFUTURE6
  176. 176. THERE IS ONLY ONEWAY TO LIVE IN AWORLD OF SPEED,SURPRISE, NOISE ANDRESPONSIVENESSGrant McCracken
  177. 177. THAT IS TO VISITTHE FUTUREFREQUENTLYGrant McCracken
  178. 178. ALLOW FOR MANYPOSSIBLE, PLAUSIBLEFUTURES
  179. 179. THE BEST WAY TOPREDICT THEFUTURE IS TOCREATE ITPETER DRUCKER
  180. 180. WE BELIEVE THESEARE THELEADERSHIP SKILLSOF THE FUTURE
  181. 181. THIS IS HOWWE DO IT.
  182. 182. Method for Business Model Innovation
  183. 183. WITH FIXED PRICES
  184. 184. AND OUR RULES OFTHE GAME
  185. 185. DESIGNINGSTRATEGICCONVERSATIONSTHAT MATTER
  186. 186. VISUALIZATIONONLY
  187. 187. Future scenario
  188. 188. Business model
  189. 189. Story or roadmap
  190. 190. OUR JOURNEY…
  191. 191. Tallinn (EST)Hawaii (USA) Amsterdam (NET)Bilbao (ESP) Tokyo (JAP)Santiago (CHI)Zagreb (CRO) Paris (FRA) Los Angeles (USA)
  192. 192. OUR CLIENTS…
  193. 193. AND A NEWBUSINESS MODELFOR CONSULTING
  194. 194. CHECK THESESOURCES
  195. 195. Online learning
  196. 196. Business Model Software
  197. 197. Our agency
  198. 198. Thank God it’sFriday!(5 PM)Lisa@businessmodelsinc.comPatrick@businessmodelsinc.com
  199. 199. DESIGNING BETTER BUSINESSES

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