Business Model Innovation

1. RAOMAL PERERA
raomal@LeanDisruptor.com | @raomal @LeanDisruptor | www.facebook.com/LeanDisruptor
INTRODUCTION TO BUSINESS MODEL INNOVATION
#BMGEN

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3. www.Facebook.com/LeanDisruptor
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What is the 1 single most
important thing you want
to take away by the end of
the day?

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Session 1: Introduction & Problem
Solution Fit
Session 2: Introduction to Business
Model Innovation
Session 3: Business Model Canvas
– Hands-on Exercise
Session 4: Value Proposition Canvas
& Wrap-up
Agenda

6. Introduction
• Introduce yourself – name
• 1 sentence on the problem/need that
you help solve
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Google Trends
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8. How breakthrough ideas emerge from
small discoveries
Creative thinkers practice a set of simple but
ingenious experimental methods
• failing quickly to learn fast
• tapping into the genius of play
• engaging in highly immersed
observation
Free their minds, opening them up to making
unexpected connections and perceiving
invaluable insights.
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BUSINESS MODEL INNOVATION

11. What is a business model?
Discuss with your neighbour what
you think a business model is and
write down your definition [the key
elements] .....
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12. What is a business model?
A business model describes the rationale
of how an organisation Creates, Delivers
and Captures value
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13. Why we need a shared language for
business models?
13
https://strategyzer.com/academy/cours
e/business-models-that-work-and-
value-propositions-that-sell/1/1
Note: You may need to license the online learning tool on Strategyzer to
view this clip from Osterwalder

14. Use of BMC in Established Companies
IMPROVE ----------------------------------INVENT
Know Problem/Know Solution -Unknown Problem/Unknown
Solution
------EXECUTE -------------------------SEARCH------------
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15. Pivot
SEARCH EXECUTE
Customer Development
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16. Problem/
Solution Fit
Product/
Market Fit
Scale
The 3 Steps
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Knowledge is having the right answer.
Intelligence is asking the right questions
The Art of Customer Interviewing

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Finding the Problem is the Hard Part
– Kevin Systrom & Mike Krieger (Instagram
Co_Founders)
Instagram Co-Founder Kevin Systrom believes building
solutions for most problems is the easy part; the hard part is
finding the right problem to solve. Here he opens up about
how he and fellow Co-Founder Mike Krieger identified the
problems they wanted to solve around sharing photos through
mobile devices. He also reminds entrepreneurs to embrace
simple solutions, as they can often delight users and
customers.

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MVP (MINIMUM VIABLE PRODUCT)

22. MVP
A Minimum Viable Product (MVP) is
“that product which has just those
features and no more that allows you
to ship a product that early adopters
see and, at least some of whom
resonate with, pay you money for, and
start to give you feedback on”
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23. MVP #1 Explainer video
Explainer video is a short video that explains
what your product does and why people should
buy it.
A simple, 90 seconds animation is sufficient.
e.g. Dropbox
How to make an explainer video
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24. MVP #2 A Landing Place
A landing page is a web page where
visitors “land” after clicking a link from
an ad, e-mail or another type of a
campaign.
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25. MVP #2 A Landing Page
• Craft your Landing Page
• Set up a Google AdWord campaign and drive traffic
to your new landing page. Even here you can let the
AdWord engine rotate different messages and test
what works best on your prospects
• Set up Google Analytics. The most important thing to
measure is conversions – percent of visitors that sign
up (or perform another desired action)
• Set up a chat to make it easy for the visitors to raise
questions
• Set up a service like Qualaroo to survey your visitors
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26. MVP #3 Wizard of Oz
A “Wizard of Oz” MVP is when you put up a
front that looks like a real working product, but
you manually carry out product functions. It’s
also known as “Flinstoning”.
Zappos shoes is the biggest online shoe
retailer, with annual sales exceeding $1 billion.
In his Lean Startup book, Eric Ries describes
how the founder started with a Wizard of Oz
product.
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27. MVP #4 The Concierge MVP
Instead of providing a product, you start
with a manual service. But not just any
service! The service should consist of
exactly the same steps people would go
through with your product.
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28. MVP #5 Piecemeal MVP
This strategy is a blend between the “Wizard
of Oz” and “Concierge” approaches. Again,
you emulate the steps people would go
through using your product – as you envision
it.
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29. MVP #5 Crowd Funding
Sell it before you build it.
The basic idea is simple: launch a crowd
funding campaign on platforms such as
Kickstarter or IndieGoGo. Not only will you
validate if customers want to buy your product,
but you will also raise money.
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30. Business model innovations
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31. Today, a company’s long term
competitive success depends upon
its ability to create an
innovative business model.
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32. Business Model Innovation
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33. Tomorrow’s competitive advantage
of companies will not be based on
innovative products and processes,
but on innovative business models.
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34. 34
How can a sock become a business model
innovation?

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36. Additional innovation
potential
through business model
innovation
Innovation
potential
Business model
innovation
Process innovation
Product innovation/
Technology
innovation
Time
New Business Models allow for additional
innovation potential on top of product and
process innovation
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“It is not the strongest of the
species that survive, nor the
most intelligent, but the one
most responsive to change.”
- Charles Darwin

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39. Nespresso’s Business Model
What is Nespresso’s Business Model? What
made them so successful?
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40. Getting started with the canvas
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41. Best Practices
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42. Group Exercise: 15 Mins
Develop a BMC using an A3 canvas for
the ODEON Cinema.
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43. Group Exercise: 30 Mins
Develop a BMC for your project using an
A1 canvas poster.
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44. “Studies comparing successful and
unsuccessful innovation have found that the
primary discriminator was the degree to
which the user needs were fully
understood.”
– David Garvin, Harvard Business School
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45. #1 Target
customer
segment
#2
Customer
segment
also
overseas
market new
set of
customers
• Who are your
most
important
customers?
• What are
their
archetype?
• What jobs do
they want
you to get
done for
them?
Customer Segments
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46. Customer Persona/Archetypes
Profile
• Position/Title
• Age/Sex
• Role
• Discretionary budget
• Motivations
• Role models
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•Who are you?
•How do you buy?
•What matters to you?
•Who influences you?

47. Customer Archetypes
Meet Paul, Sheetal and Barbara
Paul-RegularExerciser
• 20 – 45
• Aim to maintain and
track active lifestyle
• Looking for
inspiration on diet &
exercise regimes
• Gets a buzz from
exercising
Sheetal-SpiritualHealth
•
• 30 – 55
• Already follows a
healthy lifestyle
• Interested in
alternative
medicines/
treatments
• Believes eating well
is as important as
exercise
Barbara-On-OffDieter
•
• 30 +
• Yo-yo dieter, has
tried many of the fad
diets but never stuck
to one
• Needs tips and
motivation to keep
up a healthy lifestyle
• Irregular or
infrequent exerciser
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48. Customer Types
 Saboteurs
 Intermediaries (OEM’s and resellers)
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49. MULTI-SIDED MODEL
Buyer/Payer (e.g. Google)
Two sided markets – Buyers/Payees
1.Workers/Recruiters - LinkedIn
2.Banks/Merchants - Visa
3.Sellers/Buyers - eBay
4.Readers/Advertisers - New York Times
Each has its own value proposition
Each has its own revenue streams
One segment cannot exist without the other
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50. Corporate? Consumer?
 Business to Business (B to B)
–Use or buy inside a company
 Business to Consumer (B to C)
–Use or buy for themselves
 Business to Business to Consumer (B to B
to C)
–Sell a business to get to a consumer
–Other Multi-sided Markets with multiple
customers
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51. © 2004 Valista Ltd. confidential information.51
 top up
my phone
 subscribe to a
newspaper
 book a flight
download
a report
 book a hotel
pay a bill
 cancel a check
 top-up kid’s
phones
 vote online
 top-up my phone
 download a
new game
 buy an MP3
 download
a voucher
 change my ringtone
 play the lottery
 check my
phone credit
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1
2
4
57
8
10
11
on the move at home
at play at work
premium services for subscribers
about Valista

52. “No one cares how much you know, until
they know how much you care”
– Theodore Roosevelt
EMPATHY MAPS
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53. Value proposition
• Which of our
customer’s
problems are we
helping to solve?
• Which Customer
needs are we
satisfying?
• What are the key
features of our
product that match
customers
problem/need?
What jobs do
they want done
, what's a good
outcomes for
them
What are
competitive
options and
how do I
differentiate
over others
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VALUE PROPOSITION CANVAS

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The
Business Model Canvas (BMC)
helps you
create value for your business
The
Value Proposition Canvas
helps you
create value for your customer

59. Zooming into the Value Proposition
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Observe

62. Clayton Christensen
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Jobs to be Done
“If you understand the job,
how to improve the product
becomes just obvious”

63. Jobs To Be Done
• Functional Job
– Get a task done
– e.g. business travel: accommodation, appointment, eat, sleep
• Emotional Job
– How the customer wants to feel
– e.g. business travel: stay connected with home, stay safe
• Social Job
– How the customer wants to be perceived
– e.g. business travel: look good with clients
• Supporting Job
– Purchasing and consuming value
- e.g. business travel: reserve accommodation
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64. Jobs To Be Done – Generic jobs
• Search or seek information
• Fix or repair something
• Satisfy my emotional needs
• Protect property or information
• Achieve objective efficiently
• Compare or evaluate alternative
• Offer somebody else advice
• Convey an image (of success)
• Transfer ownership rights
• Evaluate performance
• Achieve main objective
• Reduce stress 64

65. “People buy products and services to get jobs
done. As people complete these jobs, they
have certain measurable outcomes that they
are attempting to achieve. It links a company's
value creation activities to customer-defined
metrics.” - Ulwick
OUTCOME-DRIVEN
INNOVATION
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Design

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74. © 2004 Valista Ltd. confidential information.74

75. “Studies comparing successful and
unsuccessful innovation have found that the
primary discriminator was the degree to
which the user needs were fully
understood.”
– David Garvin, Harvard Business School
75

76. The Fit Between the Value Proposition and
the Customer Profile for Hilti's Fleet
Management Service
76
https://strategyzer.com/training/course
s/business-models-that-work-and-
value-propositions-that-sell/5/4/2
Note: You may need to license the online learning tool on Strategyzer to
view this clip from Osterwalder

77. Review
–Great business models always
outcompete great products and
technologies
–If you understand the job, how to
improve the product becomes obvious
–The BMC is a shared language for
business modelling
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78. raomal@LeanDisruptor.com | @raomal @LeanDisruptor | www.facebook.com/LeanDisruptor
RAOMAL PERERA
THANK YOU!

79. 79
APPENDIX

80. Additional Resources: Books
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81. Additional Resources Books
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Books:
Key Strategy Tools – 80+ tools for every
manager to build a winning strategy
The Business Model Navigator – The 55
Models that will revolutionize your business
– Gassmann, Frankenberger & Csik
What Customers Want – Using Outcome-
Driven Innovation to Create Breakthrough
Products and Services – Ulwick

82. Additional Resources
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BMC Online Tools:
Strategyzer
https://canvanizer.com/ (free tool)
Stattys Notes; http://www.stattys.com/
- A new generation of adhesive notes with a unique "Write
and Slide" function.

83. Additional Resources
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Card decks:
BMI Pattern Cards
Mapping the Business
Model Design Space Card
Deck

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BUSINESS MODEL ENVIRONMENT

85. The Environment https://strategyzer.com/projects/aca
demy/business-model-environment
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86. 86
WORKSHOPS

87. Fund Raising for Entrepreneurs
87

88. Building Emotional Capital for Leadership
88

89. Business Model Innovation
89

90. How to Build a Startup
90

91. raomal@LeanDisruptor.com | @raomal @LeanDisruptor | www.facebook.com/LeanDisruptor
RAOMAL PERERA
THANK YOU!