Our approach summary to Business Design

1. Business model
Hypotheses &
experiments
Lean offerings / MVP
Action plan
Execute
Learn
Decide
Plan
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BUSINESS DESIGN OVERVIEW
Design your business in your browser | http://www.rapidmodeler.deBusiness Design GAME | Playing seriously with innovation Download | http://blog.orangehills.de
Business Design is an integrative process model to turn innovative
ideas into business. The process works best when you are confronted
with the challenge to design and implement a new product, service
or an entire business model, whilst facing a lot of uncertainties.
Business Design navigates you through the troubled waters of your
innovation process and increases the efficiency of your innovation
projects. For this, we have turned the traditional development process:
“Learn”, “Plan”, “Decide” and “Execute”, upside down and transformed
it into a systematic development and learning process: “Plan”,
“Execute”, “Learn” and “Decide”. This helps us better deal with
uncertainties, working to build something that really works.
Business Design combines many great concepts and approaches, from
“Design Thinking”1)
, “Lean Startup”2)
, “Customer Development”3)
,
“Business Model Generation”4)
to “Kanban”5)
, and blends it with our
own start-up and consulting experience.
Business Design is based on guiding principles (B.), a systematic
development and learning process (C.) and visual hands-on tools
(D.-H.), ready to be used in your next project.
5
1
3
2
4
1
Analogs
(= new aspect in your business model
others have proven “right” already)
Antilogs
(= new aspect in your business model
nobody has done before)
Test focus
Exploration
2
3
4
5 Validation
Hypotheses Experiments
F. Hypotheses & Experiments
The “Hypotheses & Experiments Canvas” can help you reveal critical
and testable (= falsifiable) hypotheses in your business model, which
are both uncertain and important for the success of the innovation
endeavour. Moreover, you have space to plan how to test the
hypotheses as efficiently as possible with experiments before or after
launch. Don’t test ideas! Test hypotheses of your ideas.
Translate only the most important und uncertain antilogs (= test focus)
into testable hypotheses. This, however, is not an easy task, especially
at the beginning of innovation projects. We usually end up with very
high-level hypotheses that are hard to test with simple experiments.
Over time, we are eventually able to nail them down to very specific
but still relevant statements. The following structure may help you
phrase your hypotheses:
<future condition><threshold>
“We believe that payment by credit cards will be accepted
by more than 50% of our customers.”
Every hypothesis needs a
corresponding experiment in
order to be tested. An experi-
ment defines a sequence of
actions needed to collect data
and measure the threshold:
<action><measurement>
<timeframe>
“We integrate credit card
payments into our check-out
process for X customers and
count usage within 3 weeks.”
1. PLAN
2. EXECUTE
3. LEARN
4. DECIDE
7 weeks
The Business Design process helps you structure innovation projects
under conditions of extreme uncertainties. No matter whether you are
about to develop a new business model, service or software
application. The process gives you guidance on how to create revenue,
reduce uncertainties and create tangible results in a very short period
of time. The process is based on a systematic development and
learning cycle following the phases “Plan”, “Execute”, “Learn”, “Decide”.
C. ProcessA. Introduction G. Lean Offerings / MVP
The “Lean Offerings / MVP Canvas” gives you guidance to decide what
minimum set of features should be part of your first offerings, which
allows you to charge customers and test your hypotheses. Moreover,
you should think about any non-functional requirements and seek to
benchmark your offerings against the competition (if appropriate).
DNA Business DNA (from E.)
Job(s) to get done
Core value
“Unfair” advantage
2 Functional requirements
Non-functional requirements
Competitive benchmark
3
4
Must have
Should have
Could have
Functional
Non-functional
Think twice about what features should make it into your initial market
offerings. More features do not always lead to more value for your target
groups. If you want users to switch from competitive offerings to your
products, features are an important part of people’s decision to give it
a try. In any other case, simplicity is usually much more important for
greenfield users than being feature rich.
The lean offerings are always
the starting point to derive
a “minimum viable business”.
Which elements of your
underlying business model
(from E.) are absolutely
essential to create and
deliver your offerings to
the market?
MVB
(= minimum viable business)
Describe functional requirements as “user stories” (without
pre-defining a solution):
<role><action>[<outcome>]
“As administrator, I want to add new users to the database,
so I can save time and serve users much quicker.”
1 Hypotheses (from F.)
2
3
4
1
http://bit.ly/1rMo2hP
We always put people
first and care about
their behaviour
We think in holistic
structures to embrace
complexity
We put things into
context to understand
the full picture
We make the invisible
visible to understand
and interact with others
We build and learn
at the same time -
step by step
We work in teams
to see things through
different lenses
B. Guiding Principles
Business Design is based on six guiding principles that impact the
way we think and work to develop and implement new business,
which comprises the very core of this process model. But, why do we
need them? Every element (e.g. process, activities, tools) of Business
Design is in some way linked to one or many of those principles, which
helps us to develop a consistent methodology.
http://bit.ly/1lQHcf7
1) http://dschool.stanford.edu
2) http://theleanstartup.com
3) http://steveblank.com
4) http://www.businessmodelgeneration.com
5) http://en.wikipedia.org/wiki/Kanban_(development)
Business Design is an integrative process model to turn ideas
into business under conditions of extreme uncertainties.
Orange HillsTM
GmbH | www.orangehills.de
Follow us on Twitter: @orangehillsgmbh
Team DateIteration 1 2 3
http://bit.ly/UHYzra
5
1
2
3
4
6
7
8
9
10
Resources
Channels (partners)
Processes
Partner
Profit formula
6
7
8
9
10
internal
1 Target groups
Brand & message(s)
Channels (target groups)
Relationships
Offerings
2
3
4
5
DNA Business DNA
external
Job(s) to get done
Core value
“Unfair” advantage
E. Business Model
The “Business Model Canvas” has been designed to visualise the
essential ingredients of a business model as a future business scenario,
on one page. The left part is focused on external components, in order
to understand the ways in which you reach and serve your customers
and users. The right part comprises internal components to describe
how your organisation works to create and deliver high value.
The “Business DNA” is the
very essence of your
business model, which is
the key to building your
initial market offerings
in later stages. If you only
have 30 seconds to pitch
your business, present
the DNA.
Think of scenarios when designing business models. There are always
many possibilities to create your offerings, to serve your customers and
users, and to charge them. There are many great frameworks that may
inspire you (e.g. “The Business Model Navigator” by Oliver Gassmann &
friends). You must be as concrete as possible and avoid non-sensical
jargon. Whilst it is so easy just to scratch the surface, why not try to
imagine how your new business model really works.
Apart from designing business models, every model needs its own way
to measure success. To define these metrics, we ask ourselves:
“Do these metrics help us measure success?, “can we measure our
metrics?” and “do the metrics help us decide what to do differently?”
If yes, go for it.
http://bit.ly/1k5aV8O
H. Action Plan
The “Action Plan Canvas” is a very simple but effective way to organise
your activities in order to implement your business model / lean
offerings and run your experiments in short cycles. Adapt the number
of weeks per cycle in order to match what is adequate in your industry.
Make sure you create something tangible after each cycle that fulfils
the given purpose.
1
Activities to implement
Lean Offerings / MVP (from G.)
Activities to run experiments (from F.)
Output
Reflection
2
3
4
5 Quality of teamwork
5
1
3
2
4
Ideas are worth nothing unless they are executed. This statement may
sound trivial, but execution is still one of the biggest hurdles for many
corporations, preventing them from becoming successful innovators.
We encourage you to start implementing your ideas quite quickly. In
some cases, we focus entirely on running experiments and build “social
prototypes” in the first instance. Sometimes we jump right into the
implementation of the lean offerings without any pre-launch tests. It
depends on the complexity of the business model and the investment
needed to realize the business model.
1) “Social prototyping” is an attitude towards building prototypes not
only to test technical feasibilities, but to support social interactions
among teams or with customers.www.rapidmodeler.de
Social
prototyping1)
In the Business Design process, we implement a set of tools that makes
our life easier. They give you guidance and help support discussions
surrounding the relevant topics in diverse teams, beyond technical
disciplines. Consequently, all tools are highly visual, interactive, easy
to understand and ready to be used right away - even without an MBA.
D. Tools
physicalvirtual
We have designed visual worksheets in the
form of large-scale posters, which we love to
use in physical workshops and meetings to
visually model the following:
+ Business model
+ Hypotheses and experiments
+ Lean offerings / MVP
+ Action plan
Every physical worksheet is also available in our
cloud-based web platform Rapid Modeler. The software
allows you to run workshops, even across virtual space,
which is particularly useful if all participants cannot
meet in the same room. With this software, you can
collaborate in real-time even across dispersed
locations.
Our mobile application
Rapid Scanner is able to digitize
physical models in a few
seconds and imports
them into our cloud-based
web platform.
Don’t forget to reflect what you
have achieved after each cycle.
We usually spend half a day
figuring out whether, and how,
to improve both our business
model and market offerings
- step by step.
Human-
centred
Holistic
perspective
Context-
oriented
Team-
oriented
Iterative
learning
Social
prototyping
Settings
SCAN IMAGE
Welcome
“Great prototypes
build great teams!”
(Michael Schrage)
Business
DNA
Business
DNA
How
do we make
business
in the future?
What is our
bet on
the future?
How do we
work together
as a team?
How can we
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- with simple
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Test focus