Design techniques for Business Model Generator

Prepared by Hani TarabichiFrom Business Model Generator

Book

Business Model design techniques

• Customer insights• Ideation• Visual thinking• Prototyping• Storytelling• Scenarios

Business Model design techniques – Customer insights

Business Model design techniques – Customer insights

• Adopting the customer perspective is a guiding principle for the entire business model design process.

• views the business model through customers‘ eyes

• an approach that can lead to the discovery of completely new opportunities

Business Model design techniques – Customer insights

• Customer perspectives should inform our choices regarding– Value Propositions– Distribution Channels– Customer Relationships– Revenue Streams

• The challenge is to develop a sound understanding of customers on which to base business model design choices

Business Model design techniques – Customer insights

• The challenge is to develop a sound understanding of customers on which to base business model design choices

• Another challenge lies in knowing which customers to heed and which customers to ignore.

• Henry Ford once said, “If I had asked my customers what they wanted, they would have told me ‘a faster horse.’ ”

Business Model design techniques – Customer insights

Business Model design techniques – Customer insights

Business Model design techniques – Customer insights

Business Model design techniques – Customer insights

• The goal is to create a customer viewpoint for continuously questioning your business model assumptions.

• Customer profiling enables you to generate better answers to questions such as:– Does this Value Proposition solve real customer

problems? – Would she really be willing to pay for this?– How would she like to be reached?

Business Model design techniques – Ideation

• Creative process for generating a large number of business model ideas and successfully isolating the best ones

• The challenge is in ignoring the status quo and suspending concerns over operational issues so that we can generate truly new ideas

• It is NOT about looking back or looking at competition

• It is about creating new mechanisms to create value and derive revenues.

Business Model design techniques – Ideation

• Ideation has two main phases:– Idea generation, where quantity matters– synthesis, in which ideas are discussed, combined,

and narrowed down to a small number of viable options.

• Options do not necessarily have to represent disruptive business models. They may be innovations that expand the boundaries of your current business model to improve competitiveness.

Business Model design techniques – Ideation

• Four epicenters of business model innovation– Resource-driven: originate from an organization’s existing

infrastructure or partnerships to expand or transform the business model

– Offer-driven: create new value propositions that affect other business model building blocks.

– Customer-driven: based on customer needs, facilitated access, or increased convenience

– Finance-driven: Innovations driven by new revenue streams, pricing mechanisms, or reduced Cost structures that affect other business model building blocks.

Business Model design techniques – Ideation

• Challenge conventional assumptions with “what if” questions

• “What if” questions are merely starting points. They challenge us to discover the business model that could make their suppositions work.

• Some “what if” questions may remain unanswered because they are too provocative

Business Model design techniques – Visual Thinking

• Visual thinking enhances strategic inquiries by making the abstract concrete, by illuminating relationships between elements, and by simplifying the complex

Business Model design techniques – Visual Thinking

• Visualizing with Post-it™ notes:– Function like idea containers that can be added,

removed, and easily shifted between business model building blocks

• Visualizing with Drawings:– People interpret simple stick figures far more

easily than abstract concepts expressed in text

Business Model design techniques – Prototyping

• The goal of this prototyping activity is far more than the mere testing or proving of ideas.

• It is a methodology for exploring different possibilities until a truly good one emerged.

• Helps participants gain a better sense of what is missing in the initial understanding of a situation

• It makes abstract concepts tangible and facilitates the exploration of new ideas.

• a prototype is a thinking tool that helps us explore different directions in which we could take our business model

Business Model design techniques – Prototyping

• Prototyping serves as thinking aids for exploring new possibilities. They help us develop a better understanding of what could be.

• Design attitude demands changing one’s orientation from making decisions to creating options from which to choose.

• Stands for an uncompromising commitment to discovering new and better business models by sketching out many prototypes

Business Model design techniques – Prototyping

Business Model design techniques – Storytelling

• Introducing the New• Pitching to Investors• Engaging Employees• The goal of telling a story is to introduce a new

business model in an engaging, tangible way.

Business Model design techniques – Storytelling

Business Model design techniques – Scenarios

• Scenarios can be useful in guiding the design of new business models or innovating around existing models

• Primary function is to inform the business model development process by making the design context specific and detailed.

Business Model design techniques – Scenarios

• The first scenario describes:– different customer settings:

• How products or services are used• what kinds of customers use them• or customer concerns, desires, and objectives.

• Such scenarios build on customer insights but go a step further by incorporating knowledge about customers into a set of distinct, concrete images.

• By describing a specific situation, a customer scenario makes customer insights tangible.

Business Model design techniques – Scenarios

• A second type of scenario describes future environments

• in which a business model might compete.• The goal here is not to predict the future, but

rather to imagine possible futures in concrete detail.

• This exercise helps innovators reflect on the most appropriate business model for each of several future environments

Business Model design techniques – Scenarios

Business Model design techniques – Scenarios