1. design and business model
business model innovation innovation & design
Cradle
November 2012
?
2012
How does one come up with
successful business models?
Jeff Bezos

2. Larry Page & Sergey Brin Lei Jun (雷 )
Xiaomi (小米科技)
?
what do these examples
have in common?

3. 1 2
they focused on product
innovation alone they simply copied
they empower the from competitors
product through the they invented a new
business model business model
3 123
they could prove in
advance that the
model would work
they had to take some
risk and experiment
going beyond
business going beyond
design going beyond
testing
product copying waiting
model
innovation thinking
competitors models
for proof

4. business
model
1 ?
discuss with your seat neighbor
what is the business model of
Nespresso
?
discuss with your seat neighbor
what a business model is

5. common language simple
holistic visual

6. customer segment
Business
Model
Canvas
defines the different groups of people or organizations
the company aims to help with getting a job done
images by JAM
value proposition distribution channel
describes the bundle of products and services that create value outlines the customer touch points through which the company reach the customer
for a specific customer segments segments to communicate and deliver a value proposition
images by JAM images by JAM

7. customer relationship revenue stream
describes how an organization gets, keeps, and grows each customer segment and represents the type of revenues an organization generates
what type of relationships it entertains with each of them from each customer segment for a specific value proposition
images by JAM images by JAM
key resources key activities
describes the most important assets, capabilities and know-how required present the most important tasks and processes a company must perform
to make a business model work to make its business model work
images by JAM images by JAM

8. key partners cost structure
outlines the network of suppliers and partners that describes all costs incurred to operate a business model
leverage the business model
images by JAM images by JAM
The Business Model Canvas
customer
key activities value proposition relationships
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES PROPOSITION RELATIONSHIP SEGMENT
key customer
partners segments
KEY DISTRIBUTION
RESOURCES CHANNEL
COST REVENUES
cost revenue
structure key distribution streams
resources channels
32
images by JAM

9. HARDWARE DIGITAL DIGITAL DIGITAL
MANUFACTURER HUB LIFESTYLE PLATFORM
1998 2001 2007 2010
http://www.businessmodelgeneration.com
?
What was apple’s business
model for the iPod?

10. 1
buzz group
http://www.flickr.com/photos/joeshlabotnik/2294656527/
?
describe the Nespresso’s
business model using the canvas

11. RESULTS average growth of
30% p.a. since 2000
in 2011, 3 billion CHF annual but Nespresso almost failed in 1987
revenue with 1 product line

12. 1
differentiate
business model
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES PROPOSITION RELATIONSHIP SEGMENT
R&D
DEVELOPMENT HARDCORE
HIGH- GAMERS
NCE
PERFORMA
CONSOLE
IBM KEY DISTRIBUTION
RESOURCES CHANNEL
GAME
CONSOLE
AUDIENCE DEVELOPERS
ENGINEERING
COST REVENUES
CONSOLE
SUBSIDIES
ROYALTIES
E
HARDWAR
LOSS
SALES AT

13. 2006 business model
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES PROPOSITION RELATIONSHIP SEGMENT
KEY DISTRIBUTION
RESOURCES CHANNEL
COST REVENUES
[source: art by Nintendo]
take-away
business model
1
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES PROPOSITION RELATIONSHIP SEGMENT
new untapped
R&D market
CASUAL
DEVELOPMENT GAMERS
FAMILY
focusing on product innovation is
CONSOLE
IBM KEY DISTRIBUTION
RESOURCES low cost CHANNEL
easier ENGINEERING
CONSOLE
AUDIENCE differentiation
GAME
DEVELOPERS not enough, it is better to empower
GAME
it through a business model
operations CHEAP
PMENT
DEVELO
COST
COST REVENUES
CONSOLE
SUBSIDIES
ABLE
PROFIT ROYALTIES
E
HARDWAR
SALES
revenues from
both sides

14. design analytical intuitive
2
thinking
thinking thinking
design
g
thinkin
1 DEEP DIVE

15. 2 CUSTOMER
?
INSIGHTS
what does it means for
business models?
analyze from the customer perspective ...
Day Month Year
No.
Rank each gain according to its relevance to
your customer.
Is it substantial or is it insignificant?
For each gain indicate how often it occurs.
KEY KEY VALUE CUSTOMER CUSTOMER
Rank each gain your products and services create according to its relevance to your
customer. Is it substantial or insignificant? For each gain indicate how often it occurs.
PARTNERS ACTIVITIES PROPOSITION RELATIONSHIP SEGMENT
Describe how your products and services create customer gains. Describe the benefits your customer expects, desires or would be surprised by.
How do they create benefits your customer expects, desires or would be surprised This includes functional utility, social gains, positive emotions, and cost savings.
AN ACTIVIT by, including functional utility, social gains, positive emotions, and cost savings?
Y
List all the products and services your value proposition is built around. Describe what a specific customer segment is trying to get done. It could be the tasks
they are trying to perform and complete, the problems they are trying to solve, or the
Which products and services do you offer that help your customer get either a
needs they are trying to satisfy.
functional, social, or emotional job done, or help him/her satisfy basic needs?
RELATIONSHI Which ancillary products and services help your customer perform the roles of:
P
ANOTHER
ACTIVITY
Besides trying to get a core job done, your customer performs ancillary jobs in differ-
Products and services may either by tangible (e.g. manufactured goods, face-to- ent roles. Describe the jobs your customer is trying to get done as:
A VALUE
face customer service), digital/virtual (e.g. downloads, online recommendations),
A CUSTOMER intangible (e.g. copyrights, quality assurance), or financial (e.g. investment funds,
KEY DISTRIBUTION
financing services).
A PARTNER N
PROPOSITIO TARGET
Rank all products and services according to their importance to your customer. Describe how your products and services alleviate customer pains. How do they Describe negative emotions, undesired costs and situations, and risks that your
Are they crucial or trivial to your customer? eliminate or reduce negative emotions, undesired costs and situations, and risks customer experiences or could experience before, during, and after getting the
your customer experiences or could experience before, during, and after getting job done.
RESOURCES CHANNEL the job done?
Rank each job according to its significance to your customer. Is it
crucial or is it trivial? For each job indicate how often it occurs.
ANOTHER
VALUE
PROPOSITIO Rank each pain according to the intensity it
A RESOURCE N
represents for your customer.
Is it very intense or is it very light.?
A CHANNEL
For each pain indicate how often it occurs.
Rank each pain your products and services kill according to their intensity
for your customer. Is it very intense or very light?
For each pain indicate how often it occurs. Risks your customer experiences or
could experience before, during, and after getting the job done?
COST REVENUES
Create one for each Customer Segment in your Business Model
A REVENUE Copyright of Business Model Foundry GmbH
COST
value proposition canvas
Designed by: Produced by:
STREAM
Business Model Foundry GmbH Stattys GmbH
Kalkbreitestrasse 71, Weissbadstrasse 14
8003 Zürich 9050 Appenzell
www.businessmodelgeneration.com www.stattys.com

16. 3 MULTIPLE
MODELS
[source: Sony Pictures]
[source: Sony Pictures]

17. [source: Sony Pictures]
[source: flickr]
architecture

18. ?
“if you freeze to an idea
too quickly, you fall in
Jim Glymph,
”
love with it ...
Gehry Partner
what does it means for
business models?
prototyping
72

19. 74
take-away
2
don’t fall in love with your first
idea, because it will become
difficult to continue exploring

20. you get ...
2
buzz group +
business model
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES PROPOSITION RELATIONSHIP SEGMENT
design a business model using
those two resources KEY
RESOURCES
DISTRIBUTION
CHANNEL
COST REVENUES

21. testing
3
models
strength weakness
flickr 2363952016_97f10be59f_o.jpg

22. 3 2 ENVIRONMENT
SCANNING
- foresight -
KEY
TRENDS
INDUSTRY MARKET
FORCES FORCES
- competitive analysis - - market analysis -
MACRO
ECONOMIC
FORCES
- macroeconomics -

23. 2 2 BM
ECONOMICS
estimation edition 92

24. 1 3 CUSTOMER
DEVELOPMENT
a business model might look ... set of hypotheses
great on paper... KEY
PARTNERS
KEY
ACTIVITIES
VALUE
PROPOSITION
CUSTOMER
RELATIONSHIP
CUSTOMER
SEGMENT
GUESS
GUESS
GUESS
GUESS KEY GUESS DISTRIBUTION GUESS
RESOURCES CHANNEL
GUESS GUESS
GUESS
GUESS
COST REVENUES
GUESS GUESS
GUESS
.. but after all it
is only a...

25. “ there are no facts in
the building... so get
the hell out and talk to
customers
”
Steve Blank
entrepreneur & author
test each hypothesis
... adapt the business model
until you can prove it works
only then should you build your
company or launch the project,
else you’ll risk...
customer customer customer company
discovery validation creation building
pivot

26. take-away
burning your cash while searching
3
for a business model
until it’s in the market there is no
proof that even the best business
model on paper will work
?
where is solar energy
particularly useful?

27. Jigar Shah in the context of shopping centers
106
1
?
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES PROPOSITION RELATIONSHIP SEGMENT
INSTALL
PANELS
LONG TERM
CUSTOMER RELATIONS
What could be a scalable
ACQUISITION
L MID- TO
SOLAR PANEON LARGE
PANEL INSTALLATI ORG ZA
ANI TIONS
MANUFACTURERS
business model for SunEdison ?
KEY DISTRIBUTION
RESOURCES CHANNEL
SOLAR
EXPERTS SALES FORCE
PATENTS
COST REVENUES
PURCHASING
FEE

28. ?
why don’t the retail stores
and shopping centers
switch to solar energy?
why
sho
so
do n
ppin
lar
’t th
g
en e
e re
cen
ters
rgy
?
tail
stor
sw i
tch
es a
to
nd
111
?
what if we gave the panels
away for free to eliminate the
hurdle of upfront investment

29. 2
?
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES PROPOSITION RELATIONSHIP SEGMENT
INSTALL
&
E
MANAG
TIONS
INSTALLA
ACQUIRE
PPAS
POWER
but how to finance the
PULAR PANEL MID- TO LA
SORCHASING ORG ZA
RGE
ANI TIONS
AGREEMEN ON
PANEL INSTALLATI
TS
MANUFACTURERS
KEY DISTRIBUTION
RESOURCES
SOLAR
CHANNEL
upfront investment
RCE
EXPERTS SALES FO
SOLAR
ENERGY
INSTALLATI
ONS
COST REVENUES
NG &
INSTALLI
MANAGING S ACQUIRING
STALLATI
ON REGU
IN LAR
PPAS PPA
PAYME
NTS
3 KEY
PARTNERS
KEY
ACTIVITIES
VALUE
PROPOSITION
CUSTOMER
RELATIONSHIP
CUSTOMER
SEGMENT
INSTALL
&
E
MANAG
TIONS
INSTALLA
ACQUIRE
PACKA PPAS
GE &
SELL
PPAS MID- TO LA
RGE
POWER ORG ZA
ANI TIONS
PURCHASING
AGREEMENTS
KEY DISTRIBUTION
RESOURCES CHANNEL
SOLAR RCE
SALES FO
the
nce EXPERTS
ina SOLAR
INSTITUT
IONAL
to f e nt ENERGY LOW-RISK
INVESTMENT & PRIVAT S
E
how stm INSTALLATI
but nve ONS RETURN FINANC INVESTOR
nt i IAL
pf ro
INSTITUT
u POOL OF PPAS IONS
COST REVENUES
NG &
INSTALLI ACQUIRIN INVESTMENT
MANAGING S G DEVELOPM
TION ACQUIRING INVESTOR FEE MONITORI ENT &
INSTALLA S REGU NG FE
LA
PAYME PPA
R E
PPAS NTS
115

30. SunEdison is now the SunEdison bought in ’09 by
largest provider of solar MEMC Electronic Materials
power in the US for USD 200 million
thank you ...
BusinessModelGeneration.com
yves.pigneur@unil.ch
business design testing
model thinking models