Notes on "Business Model Generation"

OUT-THE-BOX-DEFINITION:

A business model is like recipe for a creative manager.

What are we cooking today?

IMPORTANT CHARACTERISTICS:

-Narrative Coherence: The business model holds a story of moving a business from one opportunity to another.

• Incoherence/Components misaligned = Long-term failure.
• Strong narrative = Positive changes

-Business Model 2.0: Based on the potential of the web.

• Collective intelligence
• Self-improving systems
• Networking

-Complementarily: To find good partners, the business models of both have to fit together.

(Some) BUSINESS MODEL TYPES:

-Long tail: Small amounts to many, many clients (Niche markets + Good Channels)

-Multiplatform: Bring together different groups of clients and rise value of their interaction.

-Gratis! (For free): Three subtypes:

• Get one free, pay for another (Evolution of “Bait & hook”)
• Service/Product paid by Advertising/Sponsors. (Traditional Media)
• “Freemuim”: Pay for the full version

-Open: Create value by collaborating with clients and partners. It can be applied inwards or outwards. (?)

TOOLS TO INNOVATE ON BUSINESS MODELS

-Customer insight: Empathy. Know, think and feel like the customer.

-Ideation: Have a multidiscilinar group analyzing and brainstorming on the project.

·        Focus on finding problems and solutions (Create plan B, C, D…)

·        *Rules: No early-judging, respect, be visual, embrace craziness…

·        *Any of the 9 blocks can work as a starting point for the innovation (Resources, Product, Clients, Finances…).

-Visual Thinking: Use pictures, diagrams, outlines, post-its (more immediate), create a tag-cloud, a moodboard…

• Back of the Napkin (See visually, imagine visually, show ideas visually >> SIMPLIFY)

-Prototyping: Helps exploring ideas by making the more tangible. Do several different prototypes for the same business.

-Storytelling: A good story gives strength to any idea. There’s a natural resistance (reluctance) to change and the unknown. a strong story can make more familiar any new idea. It helps when telling the stakeholders (Alternatives: Talk, Video, Play, Text+Image, Comic…).

-Scenarios: Set out and consider different specific scenarios of how the business can evolve. This way is easier to figure out where to go (Develop plan B, C, D…). Observe your environment, detect trends and apply them to your ideas.

STRATEGIES TO CREATE AND MANAGE BUSINESS MODELS

-Evaluate the environment of the model (the forces that affect it):

-Analyze constantly the business model (through checklists, SWOTs…) to Validate or modify each of the 9 building blocks.

-Blue Ocean Strategy: Create your own uncontested market.

• Eliminate useless factors that the industry takes for granted.
• Reduce some factors below the industry’s standard.
• Raise some factors above the industry’s standard.
• Create those interesting factors that the industry has never offered.

-Work out: Practice managing several models. Learn when to integrate them to create synergies and when to separate them to prevent conflicts.

• Similarity of the building blocks + potential for synergy - potential for conflict = Recommended level of Autonomy

PROCESSES TO CREATE A BUSINESS MODEL:

-Mobilize: Set the stage for a successful business model design project.

-Understand: Research the elements needed for your business model design.

-Design: Generate various options and test them to select the best ones.

-Implement the chosen business model idea in “real life”. Execute what you thought.

-Manage: Modify your plans according to “real life feedback”. Evolve.

• A business plan tends to be static (it’s like a script).
• A business models reacts and is dynamic (it’s like Impro).