This is the first part of my course for the Master of Digital Marketing of the International Univeristy of Monaco:
Most of what is known in traditional economy has been widely questioned, or even completely destroyed, by internet.
The disintermediation of value chains, the acceleration of commercial exchanges, the importance of brand sociology, !ash sales methods, the transformation of products into services, the permeability of borders, the abundance and volatility of o"ers... All these phenomenas make digital markets hardly accessible to those who still use 20th century management tools.
In this course, we will explore #rst the main principles distinguishing digital from traditional economy. We will work then on the importance of two-sided or multi-sided markets, and in particular the economy of gratuity. We will then move forward with the extension of models of monetization enabled by the web today.
Finally, we will try to suggest a new approach on a digital company’s creation of value and added value for its clients, insisting on the notion of ecosystems and «closed gardens». For each key point we will use a recent case study, allowing the students to understand the underlying mechanisms and the practical impacts (for ex. why Diablo III is in competition with iTunes? Why la FNAC is not one of Amazon’s competitor?).
4. Business Models of Digital Markets
Most of what is known in traditional economy has been widely
questioned, or even completely destroyed, by internet.
The disintermediation of value chains, the acceleration of
commercial exchanges, the importance of brand sociology, !ash
sales methods, the transformation of products into services, the
permeability of borders, the abundance and volatility of o"ers… All
these phenomenas make digital markets hardly accessible to those
who still use 20th century management tools.
In this course, we will explore #rst the main principles distinguishing
digital from traditional economy. We will work then on the
importance of two-sided or multi-sided markets, and in particular
the economy of gratuity. We will then move forward with the
extension of models of monetization enabled by the web today.
Finally, we will try to suggest a new approach on a digital company’s
creation of value and added value for its clients, insisting on the
notion of ecosystems and «closed gardens». For each key point we
will use a recent case study, allowing the students to understand the
underlying mechanisms and the practical impacts (for ex. why Diablo
III is in competition with iTunes? Why la FNAC is not one of Amazon’s
competitor?).
5. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 1. EMBRACING DESTRUCTION
6. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Innovation as seen in MBAs
7. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world In real life...
8. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 1. Experts don’t see the future
«There is little reason for an
individual to have a
computer in their home»
Ken OLSEN, CEO Digital Equipment, 1977
9. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 1. Experts don’t see the future
10. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 1. Experts don’t see the future
2002
11. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 1. Experts don’t see the future
Universal communicator
12. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 1. Experts don’t see the future
Universal communicator
13. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 1. Experts don’t see the future
Holograms
Flying cars
14. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 1. Experts don’t see the future
Holograms
15. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 1. Experts don’t see the future
Artificial intelligence
16. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 1. Experts don’t see the future
Artificial intelligence
17. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 1. Experts don’t see the future
Flying cars
18. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 1. Experts don’t see the future
Flying cars
19. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 1. Experts don’t see the future
Experts are excited by... Market does...
20. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
21. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
38 Years
13 Years
4 Years
3 Years
88 Days
Time to reach 50 million adopters
22. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
Social life (Facebook), 2004
Shopping (Amazon), 1995
Music industry (Apple), 2007
Education (Wikipedia), 2000
TV (Netflix), 2013
Digital «Richter magnitude scale»
23. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
So what is digital?
24. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
A digital system is a data technology that uses
discrete (discontinuous) values.
25. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
information + di"usion
A digital system is a data technology that uses
discrete (discontinuous) values.
26. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
Di"usion
Speed of propagation, ease of
interoperability, pervasion, reach,
and scale.
collective
intelligence?
2015 III
m-payment (enabler to next gen market)
e-administration
open data
m-commerce
2007 II
e-commerce
social web
cloud
search mp3
2000 I MMORPG VOD
e-books
Information
Variety and density of knowledge
transfered.
Digital Markets Generation
27. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
28. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
29. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
30. ➊ Embracing destruction
2. Innovation accelerates
➋ The product is not interesting
➌ A brave new revenues world
Digital means disintermediation
31. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
Je! Raikes, Stanford, 2004
32. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
33. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
34. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
35. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
36. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
Books
37. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
TV?
38. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
«Slow Hunch»
39. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 2. Innovation accelerates
Payment
40. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 3. Alpha males and the status quo
«With in a group of macaques,
the last to adopt innovation
are the alpha males.» Génétique Moléculaire Evolutive et Médicale, U571 INS
ERM)
François TADDEI (Laboratoire de
41. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 3. Alpha males and the status quo
42. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 3. Alpha males and the status quo
Hic sunt dracones / Here be dragons
43. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 3. Alpha males and the status quo
44. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 3. Alpha males and the status quo
Innoriskation
45. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 3. Alpha males and the status quo
TECHNOLOGY
Risk / Innovation
Fundamental
Research
RUPTURE
0.001%
Black Swans
R&D / IP
SIGNIFICATIVE
20%
Forecastable ROI Startups
Pipeline
Versioning
INCREMENTAL
80%
OTS Multinationals
MARKET
Risk / Innovation
Busines Model
Known
New Paradigm
New Cycle
New Segment
New Ecosystem
New Business Model
BLACK HOLE
46. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 3. Alpha males and the status quo
?
BLACK HOLE
47. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 3. Alpha males and the status quo
48. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 3. Alpha males and the status quo
49. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 3. Alpha males and the status quo
Charles Leadbater, TED Talks, 2005
50. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 4. First-movers and pioneers
Be identi#ed as the leading brand
Federate the early adopters community
Lead their transition in a core market
community and secure your market share
Leverage your advance to decrease the BOM
(Bill of Materials) with economies of scale in
production/purchasing
Be the #rst again to cycle the market with a
new o"er
51. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 4. First-movers and pioneers
52. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 4. First-movers and pioneers
53. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 4. First-movers and pioneers
54. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world 4. First-movers and pioneers
55. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world The destructive nature of digital markets
56. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world The destructive nature of digital markets
Innovation is about changing the market.
And creating a clear added value.
Not inventing technologies.
Typical companies have to balance status quo and risk.
This is di!cult (but they can do ok for some time).
Startups depend on taking risk.
Find a crisis and solve it (this is disruption).
57. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Destruction is OK
The opening up of new markets, foreign or domestic,
and the organizational development from the craft shop
and factory to such concerns as U.S. Steel illustrate the
same process of industrial mutation–if I may use that
biological term–that incessantly revolutionizes the
economic structure from within, incessantly destroying
the old one, incessantly creating a new one. This process
of Creative Destruction is the essential fact about
capitalism.
Joseph A. Schumpeter
«Capitalism, Socialism and Democracy»
(New York: Harper, 1975) [orig. pub. 1942], pp. 82-8
58. 2. THE PRODUCT IS NOT
➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world
INTERESTING
(IT NEVER WAS)
I see... business models
59. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Business model / Business plan
BUSINESS MODEL
Your strategy to generate added value for your
customers, and how to transform this into
sustainable revenues streams.
BUSINESS PLAN
Your step-by-step operational forecast of how
this logic will happen in real life, during the
next 5 years.
60. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Business model?
61. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Business model?
“Compe'ng*Through*Business*Models”*6*Harvard&Business&School,&2008
62. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Business model?
63. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Business model?
65. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Business model?
66. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Business Model Visualization
ACTIVITY OFFER MARKET
key resources strategic communication distribution customers
added value products monetization
and assets partnerships channels modes segments
67. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Business Model Visualization
ACTIVITY OFFER MARKET
key resources strategic communication distribution customers
added value products monetization
and assets partnerships channels modes segments
1 B2B
X
2 B2C
68. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world
ACTIVITY OFFER MARKET
key resources strategic communication distribution customers
added value products monetization
and assets partnerships channels modes segments
69. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world
ACTIVITY OFFER MARKET
key resources strategic communication distribution customers
added value products monetization
and assets partnerships channels modes segments
CPC Google
Android You AdWords B2B
Generate Microsoft Auctions Gmail
Chrome
customers Apple Google docs
...
leads ... Google maps
Your data
...
70. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world
ACTIVITY OFFER MARKET
key resources strategic communication distribution customers
added value products monetization
and assets partnerships channels modes segments
Google FREE Google B2C
Instantly find the Gmail
most relevant Google docs
information Google maps
...
Google
Android
Microsoft Gmail
Chrome
Apple Google docs
...
... Google maps
Your data
...
Generate
customers leads
CPC
You AdWords B2B
Auctions
Typical multi-sided model
71. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Business Model Visualization
72. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Added Value
ACTIVITY OFFER MARKET
key resources strategic communication distribution customers
added value products monetization
and assets partnerships channels modes segments
What is the problem that
we solve?
Why are the customers
coming to us, instead of
the competition?
Cost / Performance /
Unicity / Uniqueness /
Design / Well-being /
Values / Accessibility
74. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Added Value
“I sat in a room with Steve, and he put on the table
Apple’s product line. And we had four products, two
portables and two desktop computers. The iPod
wasn’t created yet. And that was a challenge (with
only four products).
But it ended up being the ultimate opportunity,
because we said, because we don’t have enough
products to fill a store that size, let’s fill it with
the ownership experience.
So we quickly moved from a buying experience to
an ownership experience–Genius Bars, theaters, and
face-to-face help and friendly people.
But we had a liberty that most retailers don’t have that
are overstuffed with products. You know, you don’t
have the space to innovate.”
— Johnson at 2005 retail conference
77. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Added Value
To organize the world’s
information and make it
universally accessible
and useful.
78. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Added values in collision course...
79. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Added values in collision course...
With $2 billion a year, Apple is finally making
money on content
23 Billion items were sold sold through iTunes in 2012
(Christopher Mims, 2013)
80. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Added values in collision course...
81. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Added values in collision course...
82. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Added values in collision course...
83. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Added values in collision course...
84. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Added values in collision course...
85. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Key Resources and Assets
ACTIVITY OFFER MARKET
key resources strategic communication distribution customers
added value products monetization
and assets partnerships channels modes segments
What is the What do we need to build
problem that we
solve? barriers of entry?
Why are the
customers What is our magic?
coming to us,
instead of the What are the core
competition? competencies we need to
Cost / invest in, to sustain our
Performance / business?
Unicity /
Uniqueness / Know-hows / Soft skills /
Design / Well-
Processes / Structure /
being / Values /
Accessibility Culture / Networks /
Tools / IP
86. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Key Resources and Assets
87. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Key Resources and Assets
How Apple works: Inside the world's biggest startup
By Adam Lashinsky, Sr. Editor at Large August 25, 2011:
88. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Key Resources and Assets
Intel working hard to keep Ultrabook pricing lower than $1,000
By Sean Portnoy | August 6, 2011
Despite Intel’s lofty claims that its new Ultrabook platform of super-slim laptops would account
for 40 percent of the notebook market by the end of the next year, it’s been dogged by some issues
as manufacturers work to get the first Ultrabooks out the door. The most notable one is the price
tag, and the chip giant is stepping up efforts to show that the laptops don’t need to cost more than
$1,000.
That price point is important for a number of reasons, not least of which is that the cheapest
MacBook Air costs $999. There have been rumored complaints by laptop manufacturers that
given the cost of materials, Ultrabooks would cost more than $1,000 out of the gate. But
according to DigiTimes, Intel has provided those vendors a bill of materials for two different
Ultrabook flavors, showing that component costs can range from $475 to $650 for 21mm
Ultrabooks and $493 to $710 for 18mm flavors. The company is also planning to meet with
manufacturers to work on controlling costs to keep the price under a grand — though those same
manufacturers have griped that Intel’s pricing of its own parts is a big reason for the high
projected costs.
Ultrabooks have hit one other snag, perhaps thanks to Apple itself. Vendors are facing a shortage
of the magnesium-aluminum chassis that Intel wants used for Ultrabooks, which is leading them
to consider using fiberglass chassis instead. Apple has most likely gobbled up all those chassis for
itself,as the two major suppliers of the metal chassis are also suppliers to Apple. The one good
thing about using fiberglass rather than metal: the Ultrabooks may cost about $20 cheaper.
While major manufacturers like Asus and HP appear onboard with Ultrabook production, at least
one other vendor is skeptical of the platform: Acer’s founder, Stan Shih, has dubbed the new
laptops a “fad.” If Intel and its partners can keep them priced below the MacBook Air that might
not be the case, but there’s plenty of skepticism floating around about whether Ultrabooks will be
the future of notebooks or not.
89. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Key Resources and Assets
A core competency is a well-performed internal
capability that is central, to a company’s strategy,
competitiveness, and profitability.
Valuable + Costly to imitate + Rare / Hard to substitute
90. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Key Resources and Assets
91. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Strategic Partnerships
ACTIVITY OFFER MARKET
key resources strategic communication distribution customers
added value products monetization
and assets partnerships channels modes segments
What is the What do we need Who are we working with
problem that we to build barriers
solve? of entry? to get access to rare
Why are the What is our resources?
customers magic?
coming to us, Who is central to increase
instead of the What are the core
competition? competencies we our market reach?
need to invest in,
Cost / to sustain our Who can kickstart us?
Performance / business?
Unicity / Who can protect us from
Know-hows /
Uniqueness / Soft skills /
competitors?
Design / Well- Processes / Cost / TTM / Risk / IP /
being / Values / Structure /
Accessibility Culture /
Scalability / Culture
Networks /
Tools / IP
92. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Strategic Partnerships
93. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Products
ACTIVITY OFFER MARKET
key resources strategic communication distribution customers
added value products monetization
and assets partnerships channels modes segments
What is the What do we need Who are we What’s in our portfolio?
problem that we to build barriers working with to
solve? of entry? get access to
rare resources?
What do we show on the
Why are the
customers
What is our website?
magic? Who is central to
coming to us, increase our
instead of the What are the core market reach?
What do we invoice?
competition? competencies we
Cost /
need to invest in, Who can Specifications /
to sustain our kickstart us?
Performance / business?
Who can protect
Versions / Availability /
Unicity / us from
Know-hows /
competitors?
Roadmap / Key
Uniqueness / Soft skills /
Design / Well- Processes / Cost / TTM / features / Support
being / Values / Structure / Risk / IP /
Accessibility Culture / Scalability /
Networks / Culture
Tools / IP
94. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Products
Product?
Service ?
Experience?
Usage ?
Solution ?
Lifestyle?
Statement ?
95. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Products
Products
96. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Products
Direct competition?
97. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Products
Comes
in di!e
rent co
100% R lors
e
0% Fat cyclable
(Fructo
Essent s
ial vita e)
Smart min
packag s
ing
10% Pr
ice
Trendy
98. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Products
Minimum Don’t fall
Viable in love
Product with
your
ideas
99. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Monetization
ACTIVITY OFFER MARKET
key resources strategic communication distribution customers
added value products monetization
and assets partnerships channels modes segments
What is the What do we need Who are we What’s in our How do we generate
problem that we to build barriers working with to portfolio?
solve? of entry? get access to cash?
rare resources? What do we
Why are the
customers
What is our show on the How is the revenue
magic? Who is central to website?
coming to us, increase our structure?
instead of the What are the core market reach? What do we
competition? competencies we invoice? What are the other forms
need to invest in, Who can
Cost / to sustain our kickstart us? Specifications / of revenue?
Performance / business? Versions /
Who can protect Cash / Reputation /
Unicity / Know-hows / us from Availability /
Uniqueness / competitors? Roadmap / Key Engagement /
Soft skills /
Design / Well- Processes / Cost / TTM / features /
being / Values / Support
Granularity / Cycle /
Structure / Risk / IP /
Accessibility Culture / Scalability / Direct or indirect mode /
Networks / Culture
Recurrence
Tools / IP
100. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Monetization
Transfers : Providers : Benefits :
TURNOVER CASH FLOWS CUSTOMERS EBIDTA
RECOMMENDATION TRUST & VISIBILITY MARKET BRAND VALUE
SUSTAINABILITY
EMPLOYEES &
ENGAGEMENT PRODUCTIVITY
PARTNERS
PEFORMANCE
KNOWLEDGE MATURITY MARKET TTM
GRANULARITY
101. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Communication
ACTIVITY OFFER MARKET
key resources strategic communication distribution customers
added value products monetization
and assets partnerships channels modes segments
What is the What do we need Who are we What’s in our How do we How do we broadcast our
problem that we to build barriers working with to portfolio? generate cash?
solve? of entry? get access to offer to the market?
rare resources? What do we How is the
Why are the
customers
What is our show on the revenue How does the market find
magic? Who is central to website? structure?
coming to us, increase our us?
instead of the What are the core market reach? What do we What are the
competition? competencies we invoice? other forms of What are the surfaces of
need to invest in, Who can revenue?
Cost / to sustain our kickstart us? Specifications / contact with customers?
Performance / business? Versions / Cash /
Who can protect Pre-sales / Post-sales /
Unicity / Availability / Reputation /
Know-hows / us from
competitors? Engagement /
Uniqueness / Soft skills / Roadmap / Key Periodicity / Image /
Design / Well- features / Granularity /
Processes / Cost / TTM /
being / Values / Support Cycle / Direct or Focus / Coverage /
Structure / Risk / IP /
indirect mode /
Accessibility Culture / Scalability / Interacivity /
Recurrence
Networks / Culture
Attractiveness
Tools / IP
102. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Communication
103. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Communication
«By creating value for our customers, we create value for our
shareholders. We use our expertise to create transport-related
products and services of superior quality, safety and
environmental care for demanding customers in selected
segments. We work with energy, passion and respect for the
individual.»
104. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Communication
«We organize the world‘s information and make it
universally accessible and useful.»
105. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world
alue
ded v
yo ur ad
IDEAS+PEOPLE+STRATEGY
106. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world
alue
ded v
yo ur ad
107. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Distribution
ACTIVITY OFFER MARKET
key resources strategic communication distribution customers
added value products monetization
and assets partnerships channels modes segments
What is the What do we need Who are we What’s in our How do we How do we How is the offer delivered
problem that we to build barriers working with to portfolio? generate cash? broadcast our
solve? of entry? get access to offer to the to each customer
rare resources? What do we How is the market?
Why are the What is our show on the revenue segment?
customers magic? Who is central to website? structure? How does the
coming to us, increase our market find us? How do partners help us
instead of the What are the core market reach? What do we What are the
competition? competencies we invoice? other forms of What are the enhance our logistics?
need to invest in, Who can revenue? surfaces of
Cost / Specifications / contact with Direct / Indirect /
to sustain our kickstart us?
Performance / business? Versions / Cash / customers?
Unicity /
Who can protect
Availability / Reputation / Network / Integration /
Know-hows / us from Pre-sales / Post-
Engagement /
Uniqueness / Soft skills / competitors? Roadmap / Key sales / Parallelization /
Design / Well- features / Granularity /
Processes / Cost / TTM / Periodicity /
being / Values / Cycle / Direct or Cascade / Rainfall
Structure / Risk / IP / Support Image / Focus /
Accessibility indirect mode /
Culture / Scalability / Coverage /
Recurrence
Networks / Culture Interacivity /
Tools / IP Attractiveness
112. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Customers Segments
ACTIVITY OFFER MARKET
key resources strategic communication distribution customers
added value products monetization
and assets partnerships channels modes segments
What is the What do we need Who are we What’s in our How do we How do we How is thepaying us?
Who istooffer
problem that we to build barriers working with to portfolio? generate cash? broadcast our delivered each
solve? of entry? get access to offer to the customer
rare resources? What do we How is the market?
How do we describe
segment?
the
Why are the What is our show on the revenue
customers How does the
groups of customers
magic? Who is central to website? structure? How do partners
coming to us, increase our market find us? reacting to our offer in a
help us enhance
instead of the What are the core market reach? What do we What are the our logistics? way?
competition? competencies we invoice? other forms of What are the the same
need to invest in, Who can revenue? surfaces of Direct /
Cost / to sustain our kickstart us? Specifications / contact with What are the different
Indirect /
Performance / business? Cash / customers?
Who can protect
Versions / customers’ roles?
Network /
Unicity / Availability / Reputation /
Know-hows / us from Pre-sales / Post-
Engagement / Integration Mass
Niche / / market /
Uniqueness / competitors? Roadmap / Key sales /
Soft skills /
Granularity / Parallelization /
Design / Well- features /
Processes / Cost / TTM / Periodicity / Ecosystem / Stake-
Cascade /
being / Values / Support Cycle / Direct or
Structure / Risk / IP / Image / Focus /
Accessibility Scalability /
indirect mode /
Coverage /
holders / Promoters /
Rainfall
Culture /
Recurrence
Networks / Culture Interacivity / Gate keepers / Early
Tools / IP Attractiveness
adopters / Laggards /
B2C / B2B / B2G / C2C
113. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Customers Segments
114. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Cost Structure
ACTIVITY OFFER MARKET
key resources strategic communication distribution customers
added value products monetization
and assets partnerships channels modes segments
COST STRUCTURE
Where are the main costs coming from? What are the sort term, long term and
recurring costs? What are the key investments?
Working capital requirement / Fixed or variable cost structure / Economies of
scale / Compartimentalization
115. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Business Model Visualization
ACTIVITY OFFER MARKET
key resources strategic communication distribution customers
added value products monetization
and assets partnerships channels modes segments
What is the What do we need Who are we What’s in our How do we How do we How is the offer Who is paying
problem that we to build barriers working with to portfolio? generate cash? broadcast our delivered to each us?
solve? of entry? get access to offer to the customer
rare resources? What do we How is the market? segment? How do we
Why are the What is our show on the revenue describe the
customers magic? Who is central to website? structure? How does the How do partners groups of
coming to us, increase our market find us? help us enhance customers
instead of the What are the core market reach? What do we What are the our logistics? reacting to our
competition? competencies we invoice? other forms of What are the offer in a the
need to invest in, Who can revenue? surfaces of Direct / same way?
Cost / Specifications / contact with
to sustain our kickstart us?
Cash / Indirect /
Performance / business? Versions / customers? What are the
Who can protect Network / different
Unicity / Availability / Reputation /
Know-hows / us from Pre-sales / Post- customers’ roles?
Engagement / Integration /
Uniqueness / competitors? Roadmap / Key sales /
Soft skills /
Granularity / Parallelization / Niche / Mass
Design / Well- Processes / Cost / TTM / features / Periodicity /
Cycle / Direct or Cascade / market /
being / Values / Structure / Risk / IP / Support Image / Focus /
indirect mode / Rainfall Ecosystem /
Accessibility Culture / Scalability / Coverage /
Recurrence Stake-holders /
Networks / Culture Interacivity /
Promoters /
Tools / IP Attractiveness
Gate keepers /
Early adopters /
COST STRUCTURE Laggards /
B2C / B2B /
Where are the main costs coming from? What are the sort term, long term and recurring costs? What are the key B2G / C2C
investments?
Working capital requirement / Fixed or variable cost structure / Economies of scale / Compartimentalization
116. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world What digital is destroying & recreating
ACTIVITY OFFER MARKET
key resources strategic communication distribution customers
added value products monetization
and assets partnerships channels modes segments
Adds up collective Extreme outsourcing Transfer payment to Reach out directly to
intelligence / crowd and scaling-up someone else, use every connected device
interactions to create opportunities. before paying, pay per individually.
new information. use....
Extremely low / no Ship before finalizing, Personalized, on the Global, local, glocal,
barrier of entry. the media is the spot engagement. fractalize markets, reach
product, the user is the for unsolvent
product, needs only to customers, everyone’s a
do one thing right.... market...
COST STRUCTURE
From an OPEX world to
a CAPEX world.
117. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Do you see business models?
118. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Do you see business models?
120. 3. A BRAVE NEW
➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world
REVENUES WORLD
121. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Free is the new black
Transfers : Providers : Benefits :
TURNOVER CASH FLOWS CUSTOMERS EBIDTA
RECOMMENDATION TRUST & VISIBILITY MARKET BRAND VALUE
SUSTAINABILITY
EMPLOYEES &
ENGAGEMENT PRODUCTIVITY
PARTNERS
PEFORMANCE
KNOWLEDGE MATURITY MARKET TTM
GRANULARITY
122. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world A flat pricing world
123. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world A flat pricing world
124. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Galaxies of opportunities...
Microsoft, Xbox Live
20 million people log in daily
$700 million revenue
Premium accounts $49 /month
Xbox Live is integrated in Windows Phone 7, and
will be in Windows 8 as well. "Xbox Live will be the
pervasive media service across devices, whether
it's us or Apple or anybody else, people want to be
able to navigate through multiple devices in a The US virtual goods market has reached
certain ecosystem very seamlessly". $2.1 billion in 2011
Steam Store Playstation Apple App Store
50 to 70% of the $4 b sales from Network and iTunes $1.4
downloaded PC games +100 million billion revenue
More download PC games are registered 50 million
bought in the US, than physical accounts registered
games from retail stores. $500 million accounts,
revenue +500,000 Apps
"The overall decline of PC games when combining
sales via both digital downloads and physical retail
Premium accounts 15 billion Apps
sales is impacted by the expansion of social- $49 /month downloaded (20%
network gaming as well as the continued being games).
expansion of free game options."
NPD analyst Anita Frazier
125. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world But is there real money in it?
126. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world But is there real money in it?
127. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Sustaining the TTM race
TURNOVER FREE $
RECOMMENDATION +++
A
$
B
TTM
TT Market / Maturity
128. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Sustaining the TTM race
129. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Sustaining the TTM race
130. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Sustaining the TTM race
131. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Sustaining the TTM race
Marginal cost of
production / delivery
vs. Opportunity cost
132. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Free is the new black
Razor & Blades
Sponsorship
Freemium
TRIALWARE
BUNDLE
133. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Understanding the customer acquistion cost
«If it’s free, you are the product»
134. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Collaboration economy vs. Free
135. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world The death of the Ad Economy?
136. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Death of the musical industry?
Tag Price vs. Adjusted Price
CD $15
Digital Album $9.99
Single $0.99
137. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Death of the musical industry?
BAIN «Publishing in the Digital Age» Adjusted Data
Non-Adjusted Revenues (in!ation) 64% Global drop (end of 1990 peak)
RIAA Data (16 categories) CD peak ≃ Vinyl peak (+13%)
138. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Death of the musical industry?
139. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Death of the musical industry?
Or do we get another perspective?
140. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Weak signals of destruction / recreation
141. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world What do we sell?
FAIL!
The device is not the product
142. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Still, there’s destruction...
400
300
200
100
0
2011 2012
Répartition des ventes de l’édition US ($ Mds)
Adult Hardcover
Adult Paperback
Adult Mass Market Paper.
Downloaded Audio
eBooks
American Publishers Association
143. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Still, there’s destruction...
144. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Still, there’s destruction...
145. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world Still, there’s destruction...
FAIL
146. ➊ Embracing destruction
➋ The product is not interesting
➌ A brave new revenues world
Thanks!
Philippe MÉDA
pmeda@merkapt.com
@PMerkapt