New services & business models to create impact (By Alexander Frimout)
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Changing your business model is a hotly discussed topic, but much easier said than done. In this session we take a look at why and how you deal with changing business models. At Verhaert we believe the key to successful business innovation lies in the validation along the way. Get to know some of our tools for business model validation.
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New services & business models to create impact (By Alexander Frimout)
- 1. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 1 CONFIDENTIAL Template Innovation Day 2017CONFIDENTIAL 2.2 NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT Alexander Frimout Innovation consultant Alexander.Frimout@gmail.com TRACK 2 - SERVITIZATION & NEW BUSINESS MODELS
- 2. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 2 CONFIDENTIAL 1 2 3 4 CONTENT INTRO WHY CHANGE BUSINESS MODEL? HOW TO GET THERE? CONCLUSION
- 3. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 3 CONFIDENTIAL WHO HERE HAS EVER CHANGED THE DNA OF THEIR BUSINESS?
- 4. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 4 CONFIDENTIAL IT HAPPENS! From hardware to service company From cryptography company to online payment system From computer graphics company to movie studio Some companies that transformed their identity
- 5. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 5 CONFIDENTIAL SOME COMPANIES EVEN START WITHOUT A BUSINESS MODEL “We’ll worry about it later” “If we get enough users we’ll just get bought up by Google/Facebook/Amazon…”
- 6. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 6 CONFIDENTIAL A BIG DIFFERENCE BETWEEN CHANGING YOUR BUSINESS MODEL… …as a start-up …as a mature company WHICH IS EASIER? … IT’S NOT EASY 3 out of 4 start-ups fail. HARVARD BUSINESS SCHOOL We estimate that only one in 500.000 businesses will grow to 100M USD in a decade. Bain & Company Higher complexity Higher risk More dependancies
- 7. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 7 CONFIDENTIAL SO WHY CHANGE?
- 8. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 8 CONFIDENTIAL YOU DON’T HAVE TO! • Challenging • Huge impact on organization • Inherent risk … but not changing is also a risk
- 9. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 9 CONFIDENTIAL MOST COMMON REASON TO CHANGE IS THREAT Only becomes recognised the moment a competitor starts taking up your market share. VIRTUAL THREAT ACTUAL THREAT FORBES ARTICLE - 1994 VARIOUS SOURCES- 2017 There are always early warning signs.
- 10. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 10 CONFIDENTIAL MANY POSSIBLE DRIVERS FOR THE THREAT Changes in legislation Changes in technology Changes in public image Changes in environment … Changes in user expectations Lobbying Voice of the customer Patent scouting Trend watching … TOOLS FOR MONITORING ARE KNOWN
- 11. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 11 CONFIDENTIAL SEEING THE THREAT AS AN OPPORTUNITY A materials company • Threat: Lose access to natural resources • Threat to core of company • Solution: New source through recycling From mining co to technology company
- 12. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 12 CONFIDENTIAL HOW TO GET THERE? Two lenses to look at business models Five rules for transforming your business model
- 13. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 13 CONFIDENTIAL LENS 1: USER CENTRIC BUSINESS GROWTH USER CENTERED GROWTH DOMINANT STRATEGYDIFFERENTIATED STRATEGY NICHE STRATEGY DISRUPTIVE STRATEGY Focus on underserved customers No customer focus – serve all Focus on non-customersFocus on overserved customers GetthejobdonebetterGetthejobdoneworse Charge lessCharge more Disrupt Innovate Premium Affordable
- 14. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 14 CONFIDENTIAL LENS 2: BUSINESS CENTERED PRODUCTS SERVICES COST LEADERSHIP VALUE LEADERSHIP Productize Servitize Reduce cost Improve value Internal organization strategy
- 15. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 15 CONFIDENTIAL RULE 1: FOCUS ON KEY NEW CUSTOMERS Don’t want to cannibalize current sales! NEW CUSTOMERS New segment Niche Can do late-stage testing, initial offerings with trusted partners, customers with outspoken needs… Non-users Key competitor accounts Usually a cost issue “Cheap” commercial 3D printer €1,999 €299 Consumer-focused 3D printer
- 16. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 16 CONFIDENTIAL RULE 2: RELIEVING BURDENS FROM CUSTOMERS Needs can be outspoken or hiddenSource = the user, not your R&D department • Rest of the line can’t keep up • Not a primary activity for many customers • Limited knowledge of machine operation “Our fastest machines reach speeds up to 800 SPM and have high feeding accuracies of 0.02 mm!” • Multiple supplier network • Full service package for customers • Relieve almost all operational concerns
- 17. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 17 CONFIDENTIAL RULE 3: TRANSFORM REVENUES AND MARGINS TO MATCH NEW ASSETS • Value driven vs Cost driven? • Selling? Licensing? Leasing? Pay-per-use? … • End-of-life management? 2nd hand market?
- 18. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 18 CONFIDENTIAL RULE 4: DISRUPTIVE TECHNOLOGIES WITH BIG IMPACT Disruptive need not be completely new • Little/no use in current industry • New ways of applying utilizing existing technology But has to have a BIG IMPACT Charge the same and increase value capture? OR Charge less and capture larger market share?
- 19. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 19 CONFIDENTIAL RULE 5: WORK ON SHARED TRENDS Long term or short term trend? Depends on industry... Make sure your customers are sharing the trend! Global trend or industry/geography specific trends Check whether trends are shared with your stakeholders/value chain. If there is misalignment there is no trend.
- 20. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 20 CONFIDENTIAL IN PRACTICE – THE PATTYN CASE High-end packaging systems Precision filling of boxes using pressurized & hydraulic systems Poly bag inserter ZIM-11 • For peak-capacities • Mobile • Slow • Mechanical system • Very easy operation • No maintenance • Rental model (CAPEX OPEX) 1. Focus on key new customers 2. Relieving Burdens From Customers 3. Transform revenues and margins to match new assets 4. Disruptive technologies with big impact 5. Work on shared trends Pay-per-use Machine ends up staying in place for the customer. Iteration & experimentation are key!
- 21. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 21 CONFIDENTIAL TWO DIFFERENT WAYS TO IMPLEMENT DISRUPT OTHERS Focus on new customers Utilize spin-offs & alternative product lines Protect existing brand Large need for validation DISRUPT YOURSELF Focus on existing customers Core offering change, start with autonomous team inside company Rebrand existing company, Even larger need for validation Experiment & iterate
- 22. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 22 CONFIDENTIAL VALIDATE YOUR BUSINESS MODEL AS YOU TRANSFORM Benchmarking the future • Industry observations • Trend pattern analysis Asses current model & threats/ opportunities Envision your new business model Set up iterative process: Design & validate Pre-implementation validation • Identify key gains/pains with your stakeholders • Foresight & scenario’s Continued follow-up • Assumption still valid? • Changing environment
- 23. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 23 CONFIDENTIAL CONCLUSIONS: KEY STEPS FOR TRANSFORMING YOUR BUSINESS MODEL 1. Where are you now? 2. Where do you desire to be? (Consider threats/opportunities!) 3. Five rules for Business model change • Focus on key new customers • Relieving Burdens From Customers • Transform revenues and margins to match new assets • Disruptive technologies with big impact • Work on shared trends 4. Implement 5. Validate
- 24. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 24 CONFIDENTIAL QUESTIONS?
- 25. NEW SERVICES & BUSINESS MODELS TO CREATE IMPACT 25 CONFIDENTIAL Innovation Day is an initiative of Masters in Innovation, the umbrella brand of the Verhaert Group which aims to connect, train and accelerate professional innovators. Kruibeke Belgium Hogenakkerhoekstraat 21 B-9150 Kruibeke T +32 3 250 19 00 E info@verhaert.com www.verhaert.com Nivelles Belgium Noordwijk Netherlands Av. Robert Schuman 102 B-1400 Nivelles T +32 67 47 57 10 E info@lambda-x.com www.lambda-x.com Kapteynstraat 1 2201 BB Noordwijk T +31 71 760 05 50 E info@verhaert.com connect.verhaert.com INDUSTRY TECHXFER MEDICAL AEROSPACE TECHXFER FMCGCONNECT TECHXFER FMCGCONNECT MEDICAL Aveiro Portugal Av. Dr. Lourenço Peixinho 96D 4o 3800-159 Aveiro T +351 234 604 088 E info@load-interactive.com www.load-interactive.com CONNECT Gentbrugge Belgium Bruiloftstraat 55-57 B-9050 Gentbrugge T +32 9 330 27 90 E info@moebiusdesign.be www.moebiusdesign.com ON SITE CONSULTANCY