Business model innovation
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Leonardo Zangrando, MBA, MEng● Business Strategist● People Development● focus on Innovation &
Entrepreneurship– bridging innovation strategy and
implementation
– shaping the organisation for innovation
– providing the tools for innovation
– training and coaching innovators
Hands-on, active-learning seminars, workshops and courses on innovation & entrepreneurship for international organisations, in English, Italian and Spanish.● Business Model Innovation● Adaptive Development of Innovation Ideas● Early Market Validation of Innovation Ideas● Digital Disruption● Social Selling
● I developed my strategy expertise since 1999 as consultant to global corporations on business strategy and sales & marketing strategy.
● In the same timeframe I took the opportunity to become involved in hands-on managerial projects for business innovation, acting as interim CTO, COO and CEO.
● I built my people development skills by training, assessing and coaching large B2B sales forces since 2008, on strategic selling and key account management. In the same area I recently developed training programs on digital disruption and social selling.
● Since 2010 I focused on innovation and entrepreneurship, pioneering the convergence of these 2 areas, and now I help companies reshape their innovation activities and structure building on an entrepreneurial model.
● In 2013 I developed the "Learning From Failure" management hack with Gary Hamel's MIX and the CIPD around the theme "Hacking HR for Adaptability Advantage."
What Does a Business Do?
What Does a Business Do?
A Business...
Creates and Delivers
Value
to Customers
Value Proposition
What Does a Business Do
and
For Whom
Value Proposition
The Value Propositionlays at the Core
of any Business Activityand explains
WHAT the Business doesand FOR WHOM
What is a SuccessfulValue Proposition?
A Few Examples of Failed Products
A Few Examples of Failed Products
Other Failures?
Why did they Fail?
Product / Market Fit
A Successful Value Proposition
Represents a Fit between
the Product and the Market
The Other Value Perspectives
From What Does a Business Do...
...to How Does It Do It
The Other Value Perspectives
ValueProposition
ValueCreation
ValueDelivery
ValueCapture
what does the business doand for whom
how it creates Value how Value reachesthe customer
how the businessgets a portion of value
Business Innovation
What is Innovation?
Business Innovation
How do we do Product Development?
R+D+I Flow● Research, Early Phases
– Experimentation
– Assumption Validation
● Development & Industr.– Planning
– Forecasting
R+D+I Flow● Research, Early Phases
– Experimentation
– Assumption Validation
● Development & Industr.– Planning
– Forecasting
● Why only for Value Creation? (Product Development)
Why not also for Value Delivery? (Customer Development)
R+D+I Flow● Research, Early Phases
– Experimentation
– Assumption Validation
● Development & Industr.– Planning
– Forecasting
● Why only for Value Creation? (Product Development)● Why not also for Value Delivery? (Customer Development)
R+D+I Flow● Research, Early Phases
– Experimentation
– Assumption Validation
● Development & Industr.– Planning
– Forecasting
● Why only for Value Creation? (Product Development)● Why not also for Value Delivery? (Customer Development)● And for Value Capture? (Business Modeling)
The Objectivesof Business Innovation
Feasibility Interest
ViabilityProfitable
RepeatableScalable
CaptureValue
DeliverValue
CreateValue
The Toolsof Business Innovation
ProductDevelopment
CustomerDevelopment
BusinessModelling
CaptureValue
DeliverValue
CreateValue
R+D+I Extended
Create ValueFeasibility
What does it do? How is it made? How is it built? ProductDevelopment
Capture ValueViability
Is it profitable? Is it repeatable? is it scalable? BusinessModelling
Transfer ValueInterest
For whom?How to get
to them?How is the sale
completed? CustomerDevelopment Questions
Phase Research Development Industrialisation
Product/Market Fit Business Model Business Plan Output
Entrepreneurship,Experimentation
Management,Planning Skills
R+D+I The Inventor's Curse
Create ValueFeasibility
What does it do? How is it made? How is it built? ProductDevelopment
Capture ValueViability
Is it profitable? Is it repeatable? is it scalable? BusinessModelling
Transfer ValueInterest
For whom?How to get
to them?How is the sale
completed? CustomerDevelopment Questions
Phase Research Development Industrialisation
Product/Market Fit Business Model Business Plan Output
Entrepreneurship,Experimentation
Management,Planning Skills
R+D+I The Manager's Curse
Create ValueFeasibility
What does it do? How is it made? How is it built? ProductDevelopment
Capture ValueViability
Is it profitable? Is it repeatable? is it scalable? BusinessModelling
Transfer ValueInterest
For whom?How to get
to them?How is the sale
completed? CustomerDevelopment Questions
Phase Research Development Industrialisation
Product/Market Fit Business Model Business Plan Output
Entrepreneurship,Experimentation
Management,Planning Skills
R+D+I The Manager's Curse
Product/Market Fit Business Model Business Plan
Create ValueFeasibility
What does it do? How is it made? How is it built? ProductDevelopment
Capture ValueViability
Is it profitable? Is it repeatable? is it scalable? BusinessModelling
Transfer ValueInterest
For whom?How to get
to them?How is the sale
completed? CustomerDevelopment
Output
Questions
Phase Research Development Industrialisation
Entrepreneurship,Experimentation
Management,Planning Skills
How to Avoid the Traps?
Create ValueFeasibility
What does it do? How is it made? How is it built? ProductDevelopment
Capture ValueViability
Is it profitable? Is it repeatable? is it scalable? BusinessModelling
Transfer ValueInterest
For whom?How to get
to them?How is the sale
completed? CustomerDevelopment Questions
Phase Research Development Industrialisation
Product/Market Fit Business Model Business Plan Output
Entrepreneurship,Experimentation
Management,Planning Skills
Iterative, Lean Approach● Recognise the assumptions
● Experiment to validate the assumptions
● Learn from the experiment
● Update the assumptions in a better model
On What Should We Experiment?
The Law of Failure
Most New Ideas Fail
The Law of Failure
~90% of all mobile apps don’t make money
~80% of new products fail in the market
4 out of 5 startups lose investor money
....
For truly innovative ideas the odds are even worse
One year: 24,543 new products*
Failed 27%
Disappointed 16%
Cancelled 37%
Success 14%
Star 6%
Total 100%
80%
* source: Nielsen
One year: 24,543 new products*Category # of products % of products
Breakthrough 334 1.4%
Line or categoryextension
1,705 6.9%
“Me too” 18,814 76.7%
Others(seasonal, etc.)
3,690 15.0%
Total 24,543 100%
* source: Nielsen
the Law of Failure
Most New Ideas Fail
EVEN IF THEY ARE WELL EXECUTED
How to avoid it?
Make sure youare building the right ‘it’
before you build ‘it’ right.
Make sure you're building the right 'it'...
Create ValueFeasibility
What does it do? How is it made? How is it built? ProductDevelopment
Capture ValueViability
Is it profitable? Is it repeatable? is it scalable? BusinessModelling
Transfer ValueInterest
For whom?How to get
to them?How is the sale
completed? CustomerDevelopment Questions
Phase Research Development Industrialisation
Product/Market Fit Business Model Business Plan Output
Entrepreneurship,Experimentation
Management,Planning Skills
Pretotyping
Ideas + opinions = TROUBLE
Run early experiments
to validate customer's interest
IBM & Speech-to-Text TechnologyDear Mr. Jones,
In reply to your letter ...
IBM & Speech-to-Text TechnologyDear Mr. Jones,
In reply to your letter ...
“We love the idea of speech-to-text
and we’ll pay big $ for it if you can built it right.”
IBM & Speech-to-Text Technology
Before
“We love the idea of speech-to-text
and we’ll pay big $ for it if you can built it right.”
IBM & Speech-to-Text Technology
Before After
Pretotyping vs. Prototyping● Pretotyping
– Investment: hours, days
– Main Q: Would we use it?
– Deliverable: [Working] pretotype
● Prototyping
– Investment: days, weeks
– Main Q: Can we build it?
– Deliverable: Working prototype
Pretotyping Techniques
Mechanical Turk Pinocchio Fake Door
MVP One Night Stand Impersonator
Business Model
Assembling the 4 Value Perspectives
ValueProposition
Customer Segments
ValueProposition
which customers and users are you serving? which jobs do they really want to get done?
Value Proposition Customer Segments
what are you offering them? what does it do for them? do they care?
Value Proposition Customer Segments
ValueDelivery
Value Proposition Customer Segments
ValueDelivery
Channels
how does each customer segment want to be reached? Through which interaction points?
Value Proposition Customer Segments
Channels
what relationships are you establishingwith each segment?
personal? automated? acquisitive? retentive?
CustomerRelationship /Demand Creation
Value Proposition Customer Segments
Channels
CustomerRelationship /Demand Creation
ValueCreation
Value Proposition Customer Segments
Channels
CustomerRelationship /Demand Creation
ValueCreation
Key Resources
which resources underpin your business model?which assets are essential?
Value Proposition Customer Segments
Channels
CustomerRelationship /Demand Creation
ValueCreation
Key Resources
which activities do you need to performwell in your business model? what is crucial?
Key Activities
Key Partners Value Proposition Customer Segments
Key Resources Channels
which partners and suppliers does your modelleverage? who do you need to rely on?
Key Activities CustomerRelationship /Demand Creation
Key Partners Customer Segments
Key Resources Channels
Key Activities CustomerRelationship /Demand Creation
ValueCapture
Value Proposition
Key Partners Customer Segments
Key Resources Channels
Key Activities CustomerRelationship /Demand Creation
ValueCapture
Value Proposition
Cost Structure
what is the resulting cost structure? which key elements drive your costs?
Value Proposition Customer Segments
Channels
Revenue Streams
CustomerRelationship /Demand Creation
Key Partners
Key Resources
Cost Structure
Key Activities
what are customers really willing to pay for?how? are you generating transactional
or recurring revenues?
Key Partners Value Proposition Customer Segments
Key Resources Channels
Cost Structure Revenue Streams
Key Activities CustomerRelationship /Demand Creation
how the businessgets a portion of value
The Business Model Canvas
A Business Model describesthe rationale of how an
organisation creates, delivers,and captures value
fro
m “
Bu
sin
ess
Mo
de
l Ge
ne
ratio
n”
by
Ale
x O
ste
rwa
lde
r
Business Model
Business Model T0
Hands-on Definition of Current BM
Business Model T0
Discussion
BM GenerationProduct / Market Fit
● Work in Groups on Multiple Ideas● Group Brainstorming● Plenary Discussion● Group Fix 1st Iteration● Group Validation Planning
Product / Market
Fit
BM GenerationOther Value Perspectives
● Work in Groups on Multiple Ideas ● Select One Product / Market per Group● Group Brainstorming● Plenary Discussion● Group Fix 1st Iteration● Group Validation Planning
Value
Creation
Value
Delivery
Value Capture
Thank you!
Leonardo Zangrando, MEng, MBA
[email protected]+39 349 4627 186
www.learningstartup.org/blog
