Business Model Design for Designers
JIM KALBACH
Principal UX Strategist, USEEDS°

Rutgers University, USA


Designing Web Navigation


www.xing.com/profile/James_Kalbach

@jameskalbach

www.ExperiencingInformation.com
www.UxToGo.com
                                     2
What is a business model?

Was ist ein Geschäftsmodell?
“The Business Model:
Theoretical Roots,
Recent Developments,
and Future Research”

C. Zott, R. Amit, &
L.Massa.,

WP-862, IESE, June,
2010 - revised
September 2010

http://www.iese.edu/re
search/pdfs/DI-0862-
E.pdf




                      4
Definition



    A business model describes
    the rationale of how an
    organization creates, delivers,
    and captures value.
    ALEXANDER OSTERWALDER

USEEDS° user centred thinking     5
Visualizing
Business Models



„A business model, from our
point of view, consists of four
interlocking elements that,
taken together, create and
deliver value.“




 MARK W. JOHNSON et al.,
 “Reimagine Your Business Model,”
 HBR (Dec 2008)

                                    6
Enter:

The Business Model Canvas
1. Customer Segments
The groups of people or organizations an enterprise aims to reach and serve




                                                                              8
2. Value Proposition
The bundle of products and services that create value for a specific Segment.




                                                                                9
3. Channels
How a company communicates with and reaches
its Customer Segments to deliver a Value Proposition




                                                       10
4. Customer Relationships
The types of relationships a company
establishes with specific Customer Segments




                                              11
5. Revenue Streams
The cash a company generates from each Customer
Segment (costs must be subtracted from revenues to
create earnings ;)




                                                     12
6. Key Ressources
The most important assets required
to make a business model work




                                     13
7. Key Activities
The most important things a company must do
to make its business model work




                                              14
8. Key Partners
The network of suppliers and partners that make
the business model work




                                                  15
9. Cost Structure
All costs incurred to operate a business model




                                                 16
The Business Model Canvas
The nine business model Building Blocks form
the basis for a handy tool, called Business Model Canvas.




                                                            17
The Business Model Canvas




                            18
The Business Model Canvas

   Back Stage:                Front Strage:
    Business                    Customer
    Processes                    Facing




  Business                  Customer

                                              19
BFD,
Kalbach
Business Model Innovation



                                         “ While CEOs still believe that product,
                                         service and operational innovations are
                                         important, they feel that innovation
                                         must also be applied to a company’s
                                         very core — to the way it does business
                                         and drives revenue. CEOs deemed these
                                         business model innovations vital to
                                         creating new and differentiating value
                                         for their companies.”



IBM Global Service, “Business Model Innovation,” Sept 2006
                                                                                    21
USEEDS° user centred thinking   22
Creativity & Business


“CEOs identified creativity as the
number-one leadership competency of
the future…

[But creativity] isn‘t something they
learn within their company, and it
certainly isn‘t something they are
taught in business school. Business
schools teach people how to be
deliverers, not discoverers.“



             JEFF DYER AND HAL GREGERSEN, The Innovator‘s DNA, Harvard Business Press, 2011   23
Prototype Business Models




                            24
2.8 billion people don‟t have proper sanitation

Every 15 seconds a child dies from sanitation-related illnesses




                                                                  25
26
PeePoople

The Business Model Canvas

                       Accessible,
                                     People in dev.
                       affordable
                                      world w/o
                       sanitation
                                        toilets




                                                      27
PeePoople
              Management,
The Business Model Canvas
              Coordination
                                                                           Direct,
                       of Franchises
                                                                          personal,
                                                                           family
 NGOs                   Distribution               Accessible,
                       and collection                                                               People in dev.
                                                   affordable
               Awareness,                                                                            world w/o
                                                   sanitation
               Marketing                                                       Partner                 toilets
                               QA
    Local
 governments
                                                                         Direct POU
                                                    Chance to              sales on                   Franchiser -
  UN                                               earn money            location via
                     IP,                                                                                Women
                 Technology                                               Franchise


                         Franchise                                                Sales of
                        operations                   Peace of mind               franchise
                                                                                 packages




        HR      Production           Transporta-                     Per bag sales           Bulk sales
                                         tion                          revenue




                                                                                                                     28
Business Model Prototyping




                             29
BMC Addresses Problems of Business Models



• Different definitions and understandings

• Hard to change in established organizations

• The logic is “invisible“

• Often not creatively designed



                                                30
It
     Doesn’t
      Work*
(*for you, most of the time)
Uses of the Business Model Canvas for Designers


    1. Understanding business models




USEEDS° user centred thinking                       32
#4: Never forget the business

“Amazon’s business model is
deliberately designed, and the
site is designed to fit the business.

You have to start with a great
business model to produce a great
experience.“



JARED SPOOL, “Revealing Design Treasures From The Amazon Site“
                                                                 33
Business Model Design: Disruption Case Study [Xiamter]
http://experiencinginformation.wordpress.com/2011/09/02/business-model-design-disruption-case-study/
                                                                                                       34
Uses of the Business Model Canvas for Designers


    1. Understanding business models

    2. Showing stakeholders why UX is important




USEEDS° user centred thinking                       35
The Business Model Canvas




                            36
Uses of the Business Model Canvas for Designers


    1. Understand business models

    2. Show stakeholders why UX is important

    3. Use canvases to show “invisible“ logic




USEEDS° user centred thinking                       37
Lean Canvas




                            http://succinctstories.wordpress.com/2011/02/28/running-lean-%E2%80%93-business-canvas-variant/

 USEEDS° user centred thinking                                                                                                38
Project Canvas




USEEDS° user centred thinking   39
Project Canvas




USEEDS° user centred thinking   http://teensplusdesign.wordpress.com/2011/03/22/tisdt-customer-journey-canvas/   40
Canvanizer.com




USEEDS° user centred thinking   http://teensplusdesign.wordpress.com/2011/03/22/tisdt-customer-journey-canvas/   41
Project Canvas




 USEEDS° user centred thinking   42
Download the Project Canvas°
    http://uxtogo.wordpress.com/2012/05/25/the-
    project-canvas-defining-your-project-visually/


    USEEDS° Blog: www.uxtogo.com

    We„re hiring!


USEEDS° user centred thinking                    43
Danke schön




© USEEDS° GmbH | Burchardstr. 19 | 20095 Hamburg
           Tel.: +49 (0)40 – 696 6691 32
      ron.hofer@useeds.de l www.useeds.de




                                                   44

Business Model Design for Designers

  • 1.
    Business Model Designfor Designers
  • 2.
    JIM KALBACH Principal UXStrategist, USEEDS° Rutgers University, USA Designing Web Navigation www.xing.com/profile/James_Kalbach @jameskalbach www.ExperiencingInformation.com www.UxToGo.com 2
  • 3.
    What is abusiness model? Was ist ein Geschäftsmodell?
  • 4.
    “The Business Model: TheoreticalRoots, Recent Developments, and Future Research” C. Zott, R. Amit, & L.Massa., WP-862, IESE, June, 2010 - revised September 2010 http://www.iese.edu/re search/pdfs/DI-0862- E.pdf 4
  • 5.
    Definition A business model describes the rationale of how an organization creates, delivers, and captures value. ALEXANDER OSTERWALDER USEEDS° user centred thinking 5
  • 6.
    Visualizing Business Models „A businessmodel, from our point of view, consists of four interlocking elements that, taken together, create and deliver value.“ MARK W. JOHNSON et al., “Reimagine Your Business Model,” HBR (Dec 2008) 6
  • 7.
  • 8.
    1. Customer Segments Thegroups of people or organizations an enterprise aims to reach and serve 8
  • 9.
    2. Value Proposition Thebundle of products and services that create value for a specific Segment. 9
  • 10.
    3. Channels How acompany communicates with and reaches its Customer Segments to deliver a Value Proposition 10
  • 11.
    4. Customer Relationships Thetypes of relationships a company establishes with specific Customer Segments 11
  • 12.
    5. Revenue Streams Thecash a company generates from each Customer Segment (costs must be subtracted from revenues to create earnings ;) 12
  • 13.
    6. Key Ressources Themost important assets required to make a business model work 13
  • 14.
    7. Key Activities Themost important things a company must do to make its business model work 14
  • 15.
    8. Key Partners Thenetwork of suppliers and partners that make the business model work 15
  • 16.
    9. Cost Structure Allcosts incurred to operate a business model 16
  • 17.
    The Business ModelCanvas The nine business model Building Blocks form the basis for a handy tool, called Business Model Canvas. 17
  • 18.
  • 19.
    The Business ModelCanvas Back Stage: Front Strage: Business Customer Processes Facing Business Customer 19
  • 20.
  • 21.
    Business Model Innovation “ While CEOs still believe that product, service and operational innovations are important, they feel that innovation must also be applied to a company’s very core — to the way it does business and drives revenue. CEOs deemed these business model innovations vital to creating new and differentiating value for their companies.” IBM Global Service, “Business Model Innovation,” Sept 2006 21
  • 22.
  • 23.
    Creativity & Business “CEOsidentified creativity as the number-one leadership competency of the future… [But creativity] isn‘t something they learn within their company, and it certainly isn‘t something they are taught in business school. Business schools teach people how to be deliverers, not discoverers.“ JEFF DYER AND HAL GREGERSEN, The Innovator‘s DNA, Harvard Business Press, 2011 23
  • 24.
  • 25.
    2.8 billion peopledon‟t have proper sanitation Every 15 seconds a child dies from sanitation-related illnesses 25
  • 26.
  • 27.
    PeePoople The Business ModelCanvas Accessible, People in dev. affordable world w/o sanitation toilets 27
  • 28.
    PeePoople Management, The Business Model Canvas Coordination Direct, of Franchises personal, family NGOs Distribution Accessible, and collection People in dev. affordable Awareness, world w/o sanitation Marketing Partner toilets QA Local governments Direct POU Chance to sales on Franchiser - UN earn money location via IP, Women Technology Franchise Franchise Sales of operations Peace of mind franchise packages HR Production Transporta- Per bag sales Bulk sales tion revenue 28
  • 29.
  • 30.
    BMC Addresses Problemsof Business Models • Different definitions and understandings • Hard to change in established organizations • The logic is “invisible“ • Often not creatively designed 30
  • 31.
    It Doesn’t Work* (*for you, most of the time)
  • 32.
    Uses of theBusiness Model Canvas for Designers 1. Understanding business models USEEDS° user centred thinking 32
  • 33.
    #4: Never forgetthe business “Amazon’s business model is deliberately designed, and the site is designed to fit the business. You have to start with a great business model to produce a great experience.“ JARED SPOOL, “Revealing Design Treasures From The Amazon Site“ 33
  • 34.
    Business Model Design:Disruption Case Study [Xiamter] http://experiencinginformation.wordpress.com/2011/09/02/business-model-design-disruption-case-study/ 34
  • 35.
    Uses of theBusiness Model Canvas for Designers 1. Understanding business models 2. Showing stakeholders why UX is important USEEDS° user centred thinking 35
  • 36.
  • 37.
    Uses of theBusiness Model Canvas for Designers 1. Understand business models 2. Show stakeholders why UX is important 3. Use canvases to show “invisible“ logic USEEDS° user centred thinking 37
  • 38.
    Lean Canvas http://succinctstories.wordpress.com/2011/02/28/running-lean-%E2%80%93-business-canvas-variant/ USEEDS° user centred thinking 38
  • 39.
    Project Canvas USEEDS° usercentred thinking 39
  • 40.
    Project Canvas USEEDS° usercentred thinking http://teensplusdesign.wordpress.com/2011/03/22/tisdt-customer-journey-canvas/ 40
  • 41.
    Canvanizer.com USEEDS° user centredthinking http://teensplusdesign.wordpress.com/2011/03/22/tisdt-customer-journey-canvas/ 41
  • 42.
    Project Canvas USEEDS°user centred thinking 42
  • 43.
    Download the ProjectCanvas° http://uxtogo.wordpress.com/2012/05/25/the- project-canvas-defining-your-project-visually/ USEEDS° Blog: www.uxtogo.com We„re hiring! USEEDS° user centred thinking 43
  • 44.
    Danke schön © USEEDS°GmbH | Burchardstr. 19 | 20095 Hamburg Tel.: +49 (0)40 – 696 6691 32 ron.hofer@useeds.de l www.useeds.de 44