Post on 20-Aug-2015
Business Model Premortem Game
Dr. Rod King
ROD U
Why and How Your Business Model Could Crash A Holis(c Perspec(ve
Following Elements of a Business Model Crash Are Based on the Content of
Saar Gur’s (DraC) Presenta(on to Stanford Graduate School of Business
“WHY MOST STARTUPS FAIL AT ACQUIRING NEW CUSTOMERS
(And How You Can Succeed!)”
January 2014
(h#p://www.slideshare.net/saarsaar/why-‐most-‐startups-‐fail-‐at-‐acquiring-‐new-‐customers-‐and-‐how-‐you-‐can-‐succeed)
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & hSp://businessmodels.ning.com & hSp://twiSer.com/RodKuhnKing
A Business Model Illustrates
How an OrganizaYon Creates, Delivers, and Shares Value (Happiness)
A Business Model consists of three sub-‐models or 3 Ps: q P: Provider’s Model: Create Value q P: Player’s Model: Deliver Value q P: Performance Model: Share Value (Happiness)
Gary Klein’s Premortem Technique
“We’re looking in a crystal ball, and this [business model] project has failed;
it’s a fiasco. Now, everybody,
take two minutes and write down all the reasons
why you think the project failed.”
P: PROVIDER’S MODEL
P: PLAYER’S MODEL
P: PERFORMANCE MODEL
delivers
requires
drives
requires
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & hSp://businessmodels.ning.com & hSp://twiSer.com/RodKuhnKing
Level
1 2 3 4 53P-‐BUSINESS MODEL NETWORK: Anatomy of Business Model
Profitably Create, Deliver, and Share Happiness
delivers
requires
drives
requires
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & hSp://businessmodels.ning.com & hSp://twiSer.com/RodKuhnKing
3P-‐BUSINESS MODEL NETWORK: Anatomy of a Business Model Crash Profitably Create, Deliver, and Share Happiness
Level
1 2 3 4 5
P: PROVIDER’S MODEL
P: PLAYER’S MODEL
P: PERFORMANCE MODEL
Revenue (Delight): q Declining or no sales
(revenue streams) q Poor customer engage-‐
ment/acquisitn/retentn
Inputs/Partners q Few or no mentors/guides/
coaches/partners q Inadequate funding
Internal Resources q Team with inadequate
competence/synergy for doing con(nuous innova(on and improvement projects
Channels & RelaYonships q Poorly selected/sub-‐op(mal
channels q Poor customer rela(onships
Player/Gamer/Customer/ Job-‐To-‐Get-‐Done q Undefined customer persona q Undefined customer problem,
needs, or job to get done
Cost (Pain): q High Admin/Staff Cost q Costly infrastructure q High Customer Life(me
Cost (CLC)
PERFORMANCE (PROFIT; VALUE) q High Unit Cost or CLV q Liele Sales or No Profit q Bankruptcy/Failure
Product/Service; Value ProposiYon q Bad, “buggy”, or poor quality
product/service q No or Bland Value Proposi(on
Processes/AcYviYes q Focus on Waterfall (Sequen-‐
(al) Planning/Execu(on q Poor Strategy/Execu(on q Slow or inadequate learning
delivers
requires
drives
requires
drive(s)
(NO Problem
-‐Solu(
on Fit; N
O Produ
ct-‐M
arket F
it)
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & hSp://businessmodels.ning.com & hSp://twiSer.com/RodKuhnKing
Level
1 2 3 4 5
P: PROVIDER’S MODEL
P: PLAYER’S MODEL
P: PERFORMANCE MODEL
PERFORMANCE (PROFIT; VALUE) q High Unit Cost or CLV q Liele Sales or No Profit q Bankruptcy/Failure
Inputs/Partners q Few or no mentors/guides/
coaches/partners q Inadequate funding
Internal Resources q Team with inadequate
competence/synergy for doing con(nuous innova(on and improvement projects
Channels & RelaYonships q Poorly selected/sub-‐op(mal
channels q Poor customer rela(onships
Player/Gamer/Customer/ Job-‐To-‐Get-‐Done q Undefined customer persona q Undefined customer problem,
needs, or job to get done
Revenue (Delight): q Declining or no sales
(revenue streams) q Poor customer engage-‐
ment/acquisitn/retentn
Product/Service; Value ProposiYon q Bad, “buggy”, or poor quality
product/service q No or Bland Value Proposi(on
Cost (Pain): q High Admin/Staff Cost q Costly infrastructure q High Customer Life(me
Cost (CLC)
3P-‐BUSINESS MODEL NETWORK: Anatomy of a Business Model Crash Profitably Create, Deliver, and Share Happiness
Processes/AcYviYes q Focus on Waterfall (Sequen-‐
(al) Planning/Execu(on q Poor Strategy/Execu(on q Slow or inadequate learning
delivers
requires
drives
requires
drive(s)
(NO Problem
-‐Solu(
on Fit; N
O Produ
ct-‐M
arket F
it)
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & hSp://businessmodels.ning.com & hSp://twiSer.com/RodKuhnKing
Level
1 2 3 4 5
P: PROVIDER’S MODEL
P: PLAYER’S MODEL
P: PERFORMANCE MODEL
PERFORMANCE (PROFIT; VALUE) q High Unit Cost or CLV q Liele Sales or No Profit q Bankruptcy/Failure
Inputs/Partners q Few or no mentors/guides/
coaches/partners q Inadequate funding
Internal Resources q Team with inadequate
competence/synergy for doing con(nuous innova(on and improvement projects
Channels & RelaYonships q Poorly selected/sub-‐op(mal
channels q Poor customer rela(onships
Player/Gamer/Customer/ Job-‐To-‐Get-‐Done q Undefined customer persona q Undefined customer problem,
needs, or job to get done
Revenue (Delight): q Declining or no sales
(revenue streams) q Poor customer engage-‐
ment/acquisitn/retentn
Processes/AcYviYes q Focus on Waterfall (Sequen-‐
(al) Planning/Execu(on q Poor Strategy/Execu(on q Slow or inadequate learning
Product/Service; Value ProposiYon q Bad, “buggy”, or poor quality
product/service q No or Bland Value Proposi(on
Cost (Pain): q High Admin/Staff Cost q Costly infrastructure q High Customer Life(me
Cost (CLC)
3P-‐BUSINESS MODEL NETWORK: Anatomy of a Business Model Crash Profitably Create, Deliver, and Share Happiness
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
delivers
requires
drives
requires
drive(s)
(NO Problem
-‐Solu(
on Fit; N
O Produ
ct-‐M
arket F
it)
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & hSp://businessmodels.ning.com & hSp://twiSer.com/RodKuhnKing
Level
P: PROVIDER’S MODEL
P: PLAYER’S MODEL
P: PERFORMANCE MODEL
1 2 3 4 5
Channel Management
Customer Rel. Management
MarkeYn
g/Sales M
anagem
ent
Inputs/Partners q Few or no mentors/guides/
coaches/partners q Inadequate funding
Internal Resources q Team with inadequate
competence/synergy for doing con(nuous innova(on and improvement projects
Channels & RelaYonships q Poorly selected/sub-‐op(mal
channels q Poor customer rela(onships
Player/Gamer/Customer/ Job-‐To-‐Get-‐Done q Undefined customer persona q Undefined customer problem,
needs, or job to get done
Revenue (Delight): q Declining or no sales
(revenue streams) q Poor customer engage-‐
ment/acquisitn/retentn
Cost (Pain): q High Admin/Staff Cost q Costly infrastructure q High Customer Life(me
Cost (CLC)
PERFORMANCE (PROFIT; VALUE) q High Unit Cost or CLV q Liele Sales or No Profit q Bankruptcy/Failure
Product/Service; Value ProposiYon q Bad, “buggy”, or poor quality
product/service q No or Bland Value Proposi(on
3P-‐BUSINESS MODEL NETWORK: Anatomy of a Business Model Crash Profitably Create, Deliver, and Share Happiness
Processes/AcYviYes q Focus on Waterfall (Sequen-‐
(al) Planning/Execu(on q Poor Strategy/Execu(on q Slow or inadequate learning
S: Stren
gths
O: O
pportuniYe
s
W: Weaknesses
T: Threats #4ROD. Dr. Rod King. rodkuhnhking@gmail.com & hSp://businessmodels.ning.com & hSp://twiSer.com/RodKuhnKing
1 2 3 4 5
Level
P: PROVIDER’S MODEL
P: PLAYER’S MODEL
P: PERFORMANCE MODEL
Value Crea)on: PROVIDER
Value Sharing (Happiness): PERFORMANCE
Value Delivery: PLAYER
3P-‐BUSINESS MODEL NETWORK: “SWOT” Factors of a Business Model Crash Profitably Create, Deliver, and Share Happiness
ENVIRONMENT
P: PROVIDER’S MODEL
P: PLAYER’S MODEL
P: PERFORMANCE MODEL
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & hSp://businessmodels.ning.com & hSp://twiSer.com/RodKuhnKing
1 2 3 4 5
Level 3P-‐BUSINESS MODEL NETWORK: Environmental Factors of a Business Model Crash Profitably Create, Deliver, and Share Happiness
Value Crea)on: PROVIDER
Value Sharing (Happiness): PERFORMANCE
Value Delivery: PLAYER
Indu
stry Ecosystem
(IE): Sup
ply
Market E
cosystem
(ME): D
eman
d
Key Trends & Complementors (KTC): PESTLIED (-‐/+)
Macro-‐Economic Influencers (MEI): Global Economy #4ROD. Dr. Rod King. rodkuhnhking@gmail.com & hSp://businessmodels.ning.com & hSp://twiSer.com/RodKuhnKing
1 2 3 4 5
Level
P: PROVIDER’S MODEL
P: PLAYER’S MODEL
P: PERFORMANCE MODEL
Value Crea)on: PROVIDER
Value Sharing (Happiness): PERFORMANCE
Value Delivery: PLAYER
3P-‐BUSINESS MODEL NETWORK: Environmental Factors of a Business Model Crash Profitably Create, Deliver, and Share Happiness
Bargaining Pow
er of Sup
pliers
Bargaining Pow
er of C
ustomers
Threat of New Entrants
Threat of SubsYtute Products or Services #4ROD. Dr. Rod King. rodkuhnhking@gmail.com & hSp://businessmodels.ning.com & hSp://twiSer.com/RodKuhnKing
1 2 3 4 5
Level
P: PROVIDER’S MODEL
P: PLAYER’S MODEL
P: PERFORMANCE MODEL
Value Crea)on: PROVIDER
Value Sharing (Happiness): PERFORMANCE
Value Delivery: PLAYER
3P-‐BUSINESS MODEL NETWORK: Local Industry Factors of a Business Model Crash Profitably Create, Deliver, and Share Happiness
TRADE-‐OFF MAP: Tools for the Business Model Premortem Game
LEAN STARTUP METHOD
Ideal Final Result (IFR): Insanely Great Experience (Happiness) or Ideal Business Planning and Management
Low (1)
High (10)
Low (1)
High (10)
(+): DE
LIGHT
: Re
ward (Pay-‐off)
Big Urgent Market Problem (BUMP): ………………………………………………………………………………………………………………………… Job To Get Done (Market/Goal/Mo(va(on): ………………………………………………….………………………………………………………….
SIX SIGMA METHOD LEAN STARTUP-‐SIX SIGMA GAME
(Business Model Premortem Story)
AGILE DEVELOPMENT
(-‐): PAIN: Cost (Time)
WATERFALL PLANNING
Guy Kawasaki on the Premortem Technique
“A premortem is the best way that I know
to increase the probability of a project's success. It means you tell the team
to assume that the project failed and then come up with the reasons why it failed.
Then you eliminate as many of those reasons as possible.”
Daniel Kahneman, 2002 Nobel Prize Winner in Economics, on the Premortem Technique
“The premortem is a great idea. I menYoned it at Davos—giving full credit to Gary—and
the chairman of a large corporaYon said it was worth coming to Davos for.
The beauty of the premortem is that it is very easy to do.
My guess is that, in general, doing a premortem on a plan that is about to be adopted
won’t cause it to be abandoned. But it will probably be tweaked in ways that
everybody will recognize as beneficial. So the premortem is a low-‐cost, high-‐payoff kind of thing.”