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Ignore Gurus
Machines	
  will	
  be	
  capable,	
  within	
  20	
  years,	
  
of	
  doing	
  any	
  work	
  a	
  man	
  can	
  do	
  
—Herbert	
  Simon,	
  1956—	
  
“
”
Within	
  a	
  generaBon	
  …	
  the	
  problem	
  
of	
  creaBng	
  ‘arBficial	
  intelligence’	
  will	
  
substanBally	
  be	
  solved	
  	
  
—Marvin	
  Minsky,	
  1967—	
  
“
”
 
From	
  Structured	
  best	
  business	
  
pracBces	
  to	
  General	
  Business	
  
Models	
  
•  Sample	
  of	
  educaBonal	
  games	
  
•  Focus	
  on	
  revenue	
  models	
  
–  Pay-­‐per-­‐download:	
  ‘Direct	
  revenues’,	
  $0.99	
  to	
  $3.99	
  
–  Freemium	
  model:	
  ‘Indirect	
  revenues’	
  +	
  for-­‐pay	
  features)	
  
Centralized control
Decentralized control
Indirect
revenues
(advertising)
Direct
revenues
Game
Game
Game
Game
Game
Game
Game
Game
Game
Game
Outlier
Companies	
  that	
  ignored	
  the	
  control-­‐
revenues	
  link	
  were	
  selected	
  away	
  
Or?	
  Managers	
  imitated	
  successful	
  
examples	
  from	
  their	
  industry.	
  
What	
  is	
  the	
  business	
  model	
  case,	
  	
  
taking	
  into	
  account	
  two	
  disBnct	
  groups?	
  
Game	
  developers	
  
want	
  to	
  earn	
  money	
  
Parents	
  &	
  schools	
  
want	
  to	
  teach	
  children	
  
BUSINESS	
  MODEL	
  SIMULATIONS	
  
•  Parents	
  willingness	
  to	
  spend	
  is	
  relaBvely	
  high	
  
=>	
  €84/Y/child	
  in	
  retail	
  market	
  
•  Schools’	
  willingness	
  to	
  spend	
  is	
  relaBvely	
  low	
  	
  	
  	
  	
  	
  
=>	
  €2/year/child	
  
•  360.000	
  Flemish	
  lower	
  grade	
  schoolchildren	
  	
  
OPTIMISTIC:	
  180k	
  STUDENTS	
  
03/06/14 10
€1.512.000
€360.000
€30.240
€1.841.760
€1.080.000 €432.000
€360.000
€21.600 €8.640
€1.841.760
REALISTIC:	
  90k	
  STUDENTS	
  
€756.000
€180.000
€15.120
€920.880
€540.000 €216.000
€180.000
€10.800 €4.320
€920.880
PESSIMISTIC	
  PARENTS	
  +	
  OPTIMISTIC	
  SCHOOLS	
  
€378.000
€360.000
€7.560
€730.440
€270.000 €108.000
€360.000
€5.400 €2.160
€730.440
OPTIMISTIC	
  PARENTS+	
  PESSIMISTIC	
  SCHOOLS	
  
€1.512.000
€90.000
€30.240
€1.571.760
€1.080.000 €432.000
€90.000
€21.600 €8.640
€1.571.760
 
Local	
  market	
  for	
  educaBonal	
  games	
  is	
  
under	
  extreme	
  pressure	
  to	
  offer	
  high	
  
quality	
  educaBonal	
  content	
  
40%	
  of	
  the	
  Fortune	
  500	
  companies	
  in	
  2000	
  
no	
  longer	
  existed	
  in	
  2010	
  
—And	
  all	
  the	
  variaBons	
  on	
  this	
  theme—	
  
“
”
What’s	
  the	
  average	
  company’s	
  10	
  year	
  
survival	
  raBo?	
  
29%	
  
Ignore Gurus,
Trust yr fieldwork

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Disregard Business Gurus

  • 2. Machines  will  be  capable,  within  20  years,   of  doing  any  work  a  man  can  do   —Herbert  Simon,  1956—   “ ”
  • 3. Within  a  generaBon  …  the  problem   of  creaBng  ‘arBficial  intelligence’  will   substanBally  be  solved     —Marvin  Minsky,  1967—   “ ”
  • 4.   From  Structured  best  business   pracBces  to  General  Business   Models  
  • 5. •  Sample  of  educaBonal  games   •  Focus  on  revenue  models   –  Pay-­‐per-­‐download:  ‘Direct  revenues’,  $0.99  to  $3.99   –  Freemium  model:  ‘Indirect  revenues’  +  for-­‐pay  features)  
  • 7. Companies  that  ignored  the  control-­‐ revenues  link  were  selected  away   Or?  Managers  imitated  successful   examples  from  their  industry.  
  • 8. What  is  the  business  model  case,     taking  into  account  two  disBnct  groups?   Game  developers   want  to  earn  money   Parents  &  schools   want  to  teach  children  
  • 9. BUSINESS  MODEL  SIMULATIONS   •  Parents  willingness  to  spend  is  relaBvely  high   =>  €84/Y/child  in  retail  market   •  Schools’  willingness  to  spend  is  relaBvely  low             =>  €2/year/child   •  360.000  Flemish  lower  grade  schoolchildren    
  • 10. OPTIMISTIC:  180k  STUDENTS   03/06/14 10 €1.512.000 €360.000 €30.240 €1.841.760 €1.080.000 €432.000 €360.000 €21.600 €8.640 €1.841.760
  • 11. REALISTIC:  90k  STUDENTS   €756.000 €180.000 €15.120 €920.880 €540.000 €216.000 €180.000 €10.800 €4.320 €920.880
  • 12. PESSIMISTIC  PARENTS  +  OPTIMISTIC  SCHOOLS   €378.000 €360.000 €7.560 €730.440 €270.000 €108.000 €360.000 €5.400 €2.160 €730.440
  • 13. OPTIMISTIC  PARENTS+  PESSIMISTIC  SCHOOLS   €1.512.000 €90.000 €30.240 €1.571.760 €1.080.000 €432.000 €90.000 €21.600 €8.640 €1.571.760
  • 14.   Local  market  for  educaBonal  games  is   under  extreme  pressure  to  offer  high   quality  educaBonal  content  
  • 15. 40%  of  the  Fortune  500  companies  in  2000   no  longer  existed  in  2010   —And  all  the  variaBons  on  this  theme—   “ ” What’s  the  average  company’s  10  year   survival  raBo?   29%