Business Model Innovation

by Ramon Vullings, well ehhh.... this is actually Magritte

This presentation is based on Business Model Innovation thinking by Alexander

Osterwalder and the book ‘Business Model Generation’ combined with the

book ‘Creativity Today’ by Igor Byttebier & Ramon Vullings for innovative

strategy development.

For more models and materials please see: www.BusinessModelGeneration.com &

www.CreativityToday.net

powered by 21 Lobsterstreet and the innovation & entrepreneurship institute

Business Model Innovation

ideaDJ, Master of Interaction, making ideas happen, writer,  speaker, connector, inventive, 

organisational sculptor, technology,  concept enrichment, teacher,    student, positive alternatives, 

passionate, Zorro

www.RamonVullings.com

Ramon Vullings

powered by

mixing ideas, concepts & more!

ideaDJ

ideaDJ.com

What is ideaDJ?The ideaDJ supports events, keynotes and panel discussions visually, using surprising movies, spot on images and subtile or energic sounds!

How does it work?By using a secondary projection screen, the audience will experience real-time & spot-on images and movies which support the content and flow of the event.

The ideaDJ mixes custom real-time inspiration for events

Goal?Enriching the experience and getting more out of the audience’s attention.

“How can air travel be free?”

20 / 70

How Can Air Travel Be Free?

2

Business Model

Innovation

2

Marketing

2

www.21Lobsterstreet.com

creativity&

innovation

87,5% of statistics are lies

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Perception!

Our thinking system works:

• Fast• Correct• Context dependable• Our thinking system is ‘lazy’

ideas

time

Best practices

Next practices

Craziness!

relevantideas

Perspective: The history of future

FUTURE

Apple

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28

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2

Let’s talk...

Describe what you do to your neighbour

(behind or in front of you) in 33 seconds

then let your neighbour explain

We need a common

language!

Why is Business Model thinking important?

Focussing on product / service

innovation is not enough

anymore!

Toegepaste creativiteit:

3 vormen van innovatie

www.21Lobsterstreet.com

products & services

process

culture(how we innovate)

www.21Lobsterstreet.com

1, 2, 3... 4!

Internal

External

Discon/nuousCon/nuous

Culture  /  Management  Innova/on

Process  /Opera/onal  Innova/on

Product  &  Service  Innova/on

Business  Model  Innova/on

Source:  Marc  Sniukas

Business Model

‘A business model describes how an entity organizes itself to create value and derive revenue’

- A. Osterwalder -

blue oceans

“Market boundaries are not given they are reconstructed by the actions & beliefs of industry players”

• compete in existing markets

• beat the competition

• explore existing demand

• make the value/cost trad-off

• align with differentiation OR low cost

• create uncontested markets

• make competition irrelevant

• create & capture new demand

• break value/cost trade-off

• align with differentiation AND low cost

RED OCEAN BLUE OCEAN

Now what...?

Why is Business Model thinking important to you?

Entrepreneurs

Market entry

Commercializing a new

technology

Create new markets

Managers

Growth

Competitive advantage

Fend off new entrants

Public Officers

Enhanced value for citizens

Innovative new approaches

New public management

Consultants provide insight & implementation guidance

What is a business model?Various tools for describing your business model

Source: The Boston Consulting Group

Source: Innosight

Source: businessmodelgeneration.com

Source: Accenture

3 value disciplines:

- product leadership- operational excellence- customer intimacy

Source: Treacy & Wiersma

+ €

TheBusinessModelCanvas

BuildingBlocks9

images by JAM

Customer Segments

images by JAM

Value Proposition

images by JAM

Channels

images by JAM

Customer Relationships

images by JAM

Revenue Streams

images by JAM

Key Resources

KEY ACTIVITIES

images by JAM

Key Partners

images by JAM

Cost Structure

images by JAM

customer segments

key partners

cost structure

revenue streams

channels

customer relationships

keyactivities

keyresources

valueproposition

OFFER

DISTRIBUTION CHANNELS

CUSTOMER RELATIONSHIPS

CUSTOMER SEGMENTS

REVENUE STREAMS COST STRUCTURE

KEY ACTIVITIES

PARTNER NETWORK

KEY RESOURCES

drawings by JAM

The Business Model CanvasKEY

ACTIVITIES CUSTOMER

RELATIONSHIPSKEY

PARTNERSVALUE

PROPOSITION

CHANNELS

CUSTOMERSEGMENTS

REVENUE STREAMSCOST STRUCTURE

KEYRESOURCES

building block

building block

building block

building block

building block

building block

building block

building block

building block building

block

building block

building block

Every product or technology can lead to five, ten, twenty different business models

Banking

Telco

Telco’s...

1 Business Modelor more?

The  Telco  Business  Model3 models in one

Source:  businessmodelgenera7on.com

The  Telco  Business  Model3 models in one

Source:  businessmodelgenera7on.com

Bhar7  Airtel  Limited

• Bhar7  Airtel  Limited,  the  largest  telecom  service  provider  in  India,  chose  to  strategically  outsource  its  core  func7ons.• Network:  Ericsson,  Nokia  &  Siemens• IT:  IBM

• For  a  typical  telecom  operator,  the  pain  point  during  the  growth  phase  is  planning  for  network  requirements  and  preparing  budgets  for  such  a  capital  expenditure.

• Capacity  has  to  be  built  ahead  of  demand,  which  usually  means  the  telecom  operator  has  to  absorb  the  cost  of  unused  capacity.

• Interes7ng:-­‐  110  M  subscribers-­‐  largest  Music  Store  in  India

Source:  hMp://blogs.hbr.org/cs/2010/05/reverse_innova7on_success_in_the_tele.html

A new business model for the telco industry

Transportation

Medical

Minute  Clinic

27/04/10

27/04/10

The Business Model behind PatientsLikeMe.coma community platform for patients

Forget privacy, people are sharing more info than ever, even medical records.

By offering a free service PatientsLikeMe can attract thousands of patients.

pitch your business model visually via this free templateby BoardofInnovation.com

27/04/10

The Business Model behind PatientsLikeMe.coma community platform for patients

With permission, PatientsLikeMe gathers data that can be resold for huge sums

to third parties likes pharmaceutical companies. Simple. Marvelous.

pitch your business model visually via this free templateby BoardofInnovation.com

On-line services

Social media and

more...

2

Let’s play!=

Get to work!

Make your own canvas!

Assignment:

• Make teams of 2 to 3 people• Introduce yourself• Discuss who’s business model you would like

to work on• Let this person explain their business essence• Map this out on the canvas (using post-its)• Generate ideas (and start moving the post-its

remove or add new ones)• Generate a new or enhanced Business Model!• Have fun! Everything is possible... be creative!

Look out for the idea killers

TIP: Download the free poster at www.ideakillers.net

2

Some models...(for inspiration)

The Add-On modelThe Advertising model

The Affiliate modelThe Auction model

The Direct Sales modelThe Franchise model

The Freemium modelThe Low-Cost model

The Pay as You Go modelThe Recurring Revenue model

(Subscription model)

Discuss your own

canvasses

(between 2 teams)

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cross-industry innovation

“The difficulty lies not in the new ideas,...

…but in escaping from the old ones.”

John  Maynard  Keynes

How to (re)invent your Business Model?

#1  Challenge  industry  assump7ons

WHAT#2  Offer  complementary  products  and  services#3  Offer  solu7ons  and  experiences

#4  Offer  bundles

#5  Switch  your  appeal:  func7onal  versus  emo7onal

#6  Focus  on  the  job  to  be  done

#7  Selec7vely  eliminate,  reduce,  raise  and  create

#8  Look  at  subsitutes#9  Expand  the  use  of  your  assets  and  capabili7es

#10  Look  at  the  customer  experience

HOW#18  Reinvent  the  customer  interface  (channels)#19  Reinvent  your  customer  rela7onships

#20  Invent  new  revenue  streams

#21  Price  differently

#22  Reinvent  you  cost  base

#23  Re-­‐assess  your  key  ac7vi7es

#24  Collaborate  with  suppliers,  partners,  the  network  and  ecosystem

#25  Look  at  completely  different  industries

WHO#11  Target  non-­‐customers#12  Target  less  profitable  customers

#13  Target  the  least  sa7sfied  customers

#14  Target  the  chain  of  buyers

#15  Segment  according  to  commonali7es

#16  Segment  according  to  circumstances  

#17  Desegment  the  customer  based

25 Strategies

Source:  Marc  Sniukas

Customer Focus

Know what your customer touches...

Assesing a Business Model Attractiveness...

buildingblock

buildingblock

buildingblock

building blockbuildingblock

buildingblock

buildingblock

buildingblock

buildingblock

buildingblock

buildingblock

buildingblock

Evaluate your business model design

1. How much do switching costs prevent your customers from churning?

2. How scalable is your business model?

3. Does your business model produce recurring revenues?

4. Do you earn before you spend?

5. How much do you get others to do the work?

6. Does your business model provide built-in protection from competition?

7. Is your business model based on a game changing cost structure?

See: http://www.businessmodelalchemist.com/2011/09/7-questions-to-assess-your-business-model-design.html

questions to asses your business model7

For idea implementation:

all you need is…

passion

mistake ?

mistakes?

preventable

complexity related

intelligent

nearling ?

nearling“ A nearling is a positive word for something

that you did with the right intentions, which has not (yet) led to the expected result. ”

The reasons for nearlings not to succeed can be diverse:

• the circumstances have changed

• a better option has been chosen

• you made an error

• faith decided differently

• there suddenly were other priorities

•...

Be proud!You can be proud of nearlings because:1. You started an initiative2. You may have moved others3. Maybe it let you to something that was successful4. You need many nearlings, for a few successes5. You learned from it6. ...

We want to contribute to increase the international innovative culture and entrepreneurship by introducing this word.

The nearling emphasizes that initiatives are almost always valuable, even if they don’t lead to the expected result (directly).

Share your nearlings and learn from others at: www.nearling.com

nearling !

www.nearling.com

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0, 1, 2, 3...

1 Level 0 Strategy – The Oblivious:Focus on products/value propositions alone rather than the value proposition AND the business model.

2 Level 1 Strategy – The Beginners:Use the Business Model Canvas as a checklist.

3 Level 2 Strategy – The Masters:Outcompete others with a superior business model where every one of the business model building blocks reinforce each other (e.g. Nintendo Wii, Nespresso, Dell).

4 Level 3 Strategy – The Invincible:Continuously disrupt themselves while their business models are still successful (e.g. Apple, Amazon.com).

Business Model Innovation strategies

57

“We need to go from High Tech to High Touch”

- Philip Kotler -

powered by

CreativityToday.net

This presentation is based on Business Model Innovation thinking by Alexander

Osterwalder and the book ‘Business Model Generation’ combined with the

book ‘Creativity Today’ by Igor Byttebier & Ramon Vullings for innovative

strategy development.

For more models and materials please see: www.BusinessModelGeneration.com &

www.CreativityToday.net

Business Model Innovation (1/2)

And major input comes from:

Business Model Generation - www.BusinessModelGeneration.comUnderstanding Business Models - www.BMImatters.comMark Sniukas - www.sniukas.comMarc Heleven - thegentleartofsmartstealing.wordpress.comBoard of Innovation - www.slideshare.net/boardofinnovationCreativity Today - www.CreativityToday.netAlexander Osterwalder - www.alexosterwalder.comWired Magazine - www.Wired.comFast Company Magazine - www.FastCompany.comRamon Vullings - www.RamonVullings.comHarvard Business Review - www.HBR.org

Business Model Innovation (2/2)

ideaDJ- keynote support

- enhance audience experience- custom real-time inspiration for events

innovationconsulting - leadership & strategy advice- business model Innovation- making ideas happen

innovate

master of interaction

- keynote speaking- linking content with activity- engage large audiences

boost your event

move peopleRamonVullings.com

Ramon Vullings