Alex Osterwalder: Business Models Reloaded (SKOLKOVO open lecture)
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Transcript of Alex Osterwalder: Business Models Reloaded (SKOLKOVO open lecture)
BusinessModelGeneration.com@business_design
Business Models
Reloadeddesigning tomorrowʼs
enterprise
letʼs start with a story...
BusinessModelGeneration.com
1,000,000new book titles were
published in the U.S. in ʼ10
11,000new business books
appear every year
12%decline of sales in major
bookstore chains (ʻ07-ʼ09)
?so what did we do?
we changed the product...
?would a big publishing house have taken us on
with this book?
No!
we changed the business model...
you canʼt write about business model innovation without an innovative business model
“”
$24.-
$36.-
$54.-
$81.-
$250.-
Results
in the top 10 of softcover business books in the US#
150ʼ000+ #bmgen copies in print (May 2011)#
18 #bmgen translations upcoming in 2011#
more importantly...
letʼs go back in time to understand business models...
Time Machine
1958
[sources: Henry Chesbrough, photo: life.com]
[sources: Henry Chesbrough, photo: xerox.com]
revenue growth of 41% compounded for the next 20 years
Time Machine
1997
ʼ10 revenue of $29.32 billion ($8.5 billion net income)
?what do both examples have in common?
Product innovation alone was not
sufficient They enabled the
new product through the business model1
They didnʼt nor could they copy
from competitorsThey invented new business
models2
They couldnʼt prove in advance that the models would work
They had to take some risk and
experiment3
1 2 3beyondcopying
competitors
beyondproduct
innovation
beyondasking
for proof
testingbefore
building
designthinkingattitude
businessmodel
language
business model language 1
buzzgroup
how much did the cost of home coffee consumption
change for Swiss households over the last couple of years?
6-8 x more
Nespresso changed the
business model for espresso
RESULTS
own recycling
containers
one of the fastest-growing businesses in
the Nestlé group
average growth of 30% p.a. since 2000
over 3 billion CHF annual revenue with 1 product line
(2.4 bio EUR)
buzzgroup
?Discuss and describe what you think Nespressoʼs
business model is
buzzgroup
?discuss with your seat neighbor what a business model is and
write down your definition
?what elements did you mention in your definition?
? ?
Business Model Canvas
to describe, challenge, design, and invent business models more systematically
building blocks 9
CUSTOMER SEGMENTS
images by JAM
VALUE PROPOSITIONS
images by JAM
CHANNELS
images by JAM
CUSTOMER RELATIONSHIPS
images by JAM
REVENUE STREAMS
images by JAM
KEY RESOURCES
images by JAM
KEY ACTIVITIES
images by JAM
KEY PARTNERS
images by JAM
COST STRUCTURE
images by JAM
images by JAM
customer segments
key partners
cost structure
revenue streams
channels
customer relationships
key activities
key resources
value proposition
images by JAM
customer segments
key partners
cost structure
revenue streams
channels
customer relationships
key activities
key resources
value proposition
images by JAM
CANVAS OVERLAY
images by JAM
OFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYPARTNERS
KEYRESOURCES
images by JAM
CANVAS OVERLAYOFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYPARTNERS
KEYRESOURCES
KEYPARTNERS
OFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYRESOURCES
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The Business Model Canvas
illustra-on
Nespresso changed the
business model for espresso
KEYPARTNERS
ValueProposition
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYRESOURCES
Nespresso’s business Model
households (espresso fans)
**** retail
outlets
sales of Nespresso pods
mailorder
Nespresso stores
NespressoClub
coffee machine
manufacturersbusinesses
sales of Nespresso machines
Nespressopods
patents
marketing
production
B2Cdistribution
production
callcenter
Nespresso.com
*** Nespresso machines
marketing
B2Cdistribution
distribution channelscoffee
coffeegrowers
production facilities
but Nespresso almost failed in 1987 due to a nonperforming
business model
KEYPARTNERS
ValueProposition
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYRESOURCES
Nespresso’s 1987 Model
officesNespressosystem
joint venture with machine manufacturer
machine manufacturer
buzz group
BusinessModelGeneration.com/canvas
UNDERSTANDER (interviewer) asks questions and sketches out interlocutors business model with post-it notes
EXPLAINER (interviewee) answers business model questions to help interviewer understand his/her core model
the business model generation
is changing the way we are
creating value
resource driven innovation
value proposition/tech driven innovation
job-to-get-done driven innovation
financedriven innovation
multiple-epicenter driven
design thinkingattitude 2
design≠
only form
[source: Sony Pictures]
Frank Gehry
[source: Sony Pictures]
[source: Sony Pictures]
[source: Wikimedia Commons]
?what does that have to do with business models and
my organization?
?what does that mean for us?
BusinessModelGeneration.com
business model prototyping
napkin sketch Canvas business case field test
casestudy
3 years ago in Mexico
Pomarfin - a Finnish shoe manufacturer
REVENUE STREAMSCOST STRUCTURE
OFFER
DISTRIBUTION CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
KEYACTIVITIES
PARTNERNETWORK
KEYRESOURCES
shoe manufacturing
retailpartners
sales to retailers
mass shoe market
manufacturing
costs
B2Blogistics
logisticscost
salesforce
retailpartners
?Whatʼs the big challenge for Pomarfin and its shoe manufacturing model?
so Pomarfin invented the “perfect fit” shoe, based on
a technology innovation
REVENUE STREAMSCOST STRUCTURE
OFFER
DISTRIBUTION CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
KEYACTIVITIES
PARTNERNETWORK
KEYRESOURCES
foot scanning
technology
shoe manufacturing
manufacturing
costs
B2Blogistics
logisticscost
retailpartners
sales to retailers
mass shoe market
salesforce
retailpartners
buzzgroup
?How could Pomarfin use foot-scanner technology to
become competitive again?
REVENUE STREAMSCOST STRUCTURE
OFFER
DISTRIBUTION CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
KEYACTIVITIES
PARTNERNETWORK
KEYRESOURCES
foot scanning
technology
shoe manufacturing
manufacturing
costs
B2Blogistics
logisticscost
retailpartners
sales to retailers
mass shoe market
salesforce
retailpartners
Pomar’s design decision
REVENUE STREAMSCOST STRUCTURE
OFFER
DISTRIBUTION CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
KEYACTIVITIES
PARTNERNETWORK
KEYRESOURCES
foot scanning
technology
shoe manufacturing
manufacturing
costs
B2Blogistics
logisticscost
retailpartners
sales to retailers
mass shoe market
salesforce
retailpartners
personal onlinefootprint
direct web sales
royalty payments to retailers
own stores and retail partners
ITmanagement
B2Clogistic
s
mass
customizatio
n
factory
onlinestore
high-end men’s market
testing before building 3
-‐$800m
a business model might look great on paper...
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.. but after all it is only a...
guess guess
guess
guessguess
guess
guess
guess
guess
guess
guess
guess
... a set of hypotheses
StevenBlank.com/books.html
you need to get out of the building and ...
test each hypothesis (e.g. with customers)
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business model layer
this is you
r best sho
t
at how your
business
model could
work
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hypothesis hypothesis
hypothesis
hypothesis
hypothesis
hypothesis
hypothesis
hypothesis
hypothesis
hypothesis
hypothesis
hypothesis
hypothesis layer explicitly outline the most
important hypotheses on
which your business model is built
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test test
test
test
test
test
test
test
test
test
test
test
test layer
come up with tests
to verify each
hypothesis
iPadapp
proj
ect:
scre
en:
date
: au
thor
:
iPad stencil, actual scale, template by hortis, le studio. Feb. 2010. http://hortis.lestudio.ch
BusinessModelGeneration.com/toolbox
proj
ect:
scre
en:
date
: au
thor
:
iPad stencil, actual scale, template by hortis, le studio. Feb. 2010. http://hortis.lestudio.ch
BusinessModelGeneration.com/toolbox
FAQ
?so whereʼs the competition in this
model?
FAQ
?is business model innovation only about
disruptive new models?
FAQ
?isnʼt execution the most important
thing?
FAQ
THANK YOU!BusinessModelGeneration.com
AlexOsterwalder.com BusinessModelAlchemist.com
Twitter: business_design