THE BUSINESS MODEL YACHT FOR PROBLEM-BASED STRATEGISTS: Save Time and Money While Using a...

Every Great Idea Sails Through a Lifecycle of 5 Stages

#BMYacht. Dr. Rod King. [email protected] & hFp://businessmodels.ning.com & hFp://twiFer.com/RodKuhnKing

1. CONCEPT

(PROBLEM/IDEA)

2. PRETOTYPE

3. PROTOTYPE

4. PILOT

5. FULL SCALE



1. CONCEPT

(PROBLEM/IDEA)

2. PRETOTYPE

3. PROTOTYPE

4. PILOT

5. FULL SCALE

RED OCEAN

(ExisYng) COMPETITORS



1. CONCEPT

(PROBLEM/IDEA)

2. PRETOTYPE

3. PROTOTYPE

4. PILOT

5. FULL SCALE

A Business Model Yacht Is

A Universal Project Management Tool That Shows

A Chain of Elements That an OrganizaYon Uses

To Create, Deliver, and Share Value

The Business Model Yacht Can Be Regarded As a

Means, Vehicle, Tool, or HolisCc System for IteraCvely Pursuing Any Mission, Vision,

Goal, ObjecYve, Strategy, and/or Target Especially Under CondiYons of

Great Uncertainty

The Working Space of a Business Model Yacht Is

Divided Into 3 SecCons and Focuses on 3 Adventure Ques9ons:

* Problem Space (“Red Ocean” QuesYon): Where currently are we?

* Method Space (“Vehicle”; Strategy QuesYon):

How must we get (are we geAng) there?

* SoluYon Space (“Blue Ocean” QuesYon): Where must we go?

Industry/Market/Customer Goal (Job To Get Done): ……………………………………………….………………………….

RED OCE

AN BLU

E OCEAN

#VCYacht. Dr. Rod King. [email protected] & hFp://businessmodels.ning.com & hFp://twiFer.com/RodKuhnKing

Where currently are we? Where must we

go?

How must we get there?

Method (Strategy)


RED OCE

AN BLU

E OCEAN

SoluYon Gain: (Un)Known



go?


Problem Pain: (Un)Known

Method (Strategy)


RED OCE

AN BLU

E OCEAN




go?


Method (Strategy)


RED OCE

AN BLU

E OCEAN


System Structure

Performance Structure



go?


Method (Strategy)



RED OCE

AN BLU

E OCEAN


System Structure

Performance Structure


Method (Strategy)



RED OCE

AN BLU

E OCEAN



A: Aspira9ons

Method (Strategy)



RED OCE

AN BLU

E OCEAN



Value

Method (Strategy)



RED OCE

AN BLU

E OCEAN



BENEFIT-‐COST (RATIO)

COST (STRUCTURE)

BENEFIT (STREAMS)

VALUE



RED OCE

AN BLU

E OCEAN



PROFIT (MARGIN)

COST (STRUCTURE)

REVENUE (STREAMS)

VALUE



RED OCE

AN BLU

E OCEAN


C$ R$

P$

VP + -‐





RED OCE

AN BLU

E OCEAN


C$ R$

P$

VP + -‐

PS KP

KR

KA CS

CH& CR




RED OCE

AN BLU

E OCEAN


C$ R$

P$

VP + -‐




RED OCE

AN BLU

E OCEAN


PROFIT (MARGIN)

COST (STRUCTURE)

REVENUE (STREAMS)

Value Engine

(ProposiCon/Strategy)




RED OCE

AN BLU

E OCEAN


PROFIT (MARGIN)

COST (STRUCTURE)

REVENUE (STREAMS)

Value Engine


Customer Segments

Processes/ AcYviYes

Internal Resources

Inputs/ Partners

Channels & RelaYon-‐ ships

Product/ Service




RED OCE

AN BLU

E OCEAN


PROFIT (MARGIN)

COST (STRUCTURE)

REVENUE (STREAMS)

Value Engine


Customer Segments

Processes/ AcYviYes

Internal Resources

Inputs/ Partners


Product/ Service

u  LEARN

u  MEASURE

u  BUILD




RED OCE

AN BLU

E OCEAN


PROFIT (MARGIN)

COST (STRUCTURE)

REVENUE (STREAMS)

Value Engine


Customer Segments

Processes/ AcYviYes

Internal Resources

Inputs/ Partners


Product/ Service

u  LEARN

u  MEASURE Engagement/ Acquisi9on/Ac9va9on/ Reten9on/Referral/Revenue

u  BUILD




RED OCE

AN BLU

E OCEAN


PROFIT (MARGIN)

COST (STRUCTURE)

REVENUE (STREAMS)

Value Engine


Customer Segments

Processes/ AcYviYes

Internal Resources

Inputs/ Partners


Product/ Service

u  LEARN

u  BUILD

u  MEASURE

I n n o v a t I o n A c c co u n t i n g

Engagement/ Acquisi9on/Ac9va9on/ Reten9on/Referral/Revenue




RED OCE

AN BLU

E OCEAN


PROFIT (MARGIN)

COST (STRUCTURE)

REVENUE (STREAMS)

Value Engine


Customer Segments

Processes/ AcYviYes

Internal Resources

Inputs/ Partners


Product/ Service

u  LEARN

u  BUILD

u  MEASURE

I n n o v a t I o n A c c co u n t i n g

Pretotype/Prototype/Pilot/ Full Scale

Big Urgent Market Problem (BUMP)

Engagement/ Acquisi9on/Ac9va9on/ Reten9on/Referral/Revenue




RED OCE

AN BLU

E OCEAN


PROFIT (MARGIN)

COST (STRUCTURE)

REVENUE (STREAMS)

Value Engine


Customer Segments

Processes/ AcYviYes

Internal Resources

Inputs/ Partners

q  HR Management

q  Firm Infrastructure

q  Technology Development

q  Procurements

q  Inbound LogisCcs

q  OperaCons q  Outbound

LogisCcs q  MarkeCng &

Sales q  Service


Product/ Service




RED OCE

AN BLU

E OCEAN


PROFIT (MARGIN)

COST (STRUCTURE)

REVENUE (STREAMS)

Value Engine


Customer Segments

Processes/ AcYviYes

Internal Resources

Inputs/ Partners


Product/ Service




RED OCE

AN BLU

E OCEAN


PROFIT (MARGIN)

COST (STRUCTURE)

REVENUE (STREAMS)

Value Engine


Customer Segments

Processes/ AcYviYes

Internal Resources

Inputs/ Partners


Product/ Service

New Entrants (Startups)

SubsC-‐tutes

(Incumbents)




RED OCE

AN BLU

E OCEAN


PROFIT (MARGIN)

COST (STRUCTURE)

REVENUE (STREAMS)

Value Engine


Customer Segments

Processes/ AcYviYes

Internal Resources

Inputs/ Partners


Product/ Service

New Entrants (Startups)

SubsC-‐tutes

(Incumbents)

Comple-‐mentors

Influenc-‐ers




RED OCE

AN BLU

E OCEAN


PROFIT (MARGIN)

COST (STRUCTURE)

REVENUE (STREAMS)

Value Engine


Forces Against

Forces For

Customer Segments

Processes/ AcYviYes

Internal Resources

Inputs/ Partners


Product/ Service




RED OCE

AN BLU

E OCEAN


PROFIT (MARGIN)

COST (STRUCTURE)

REVENUE (STREAMS)

Value Engine


S: Strengths

O: Opportuni-‐

Ces

W: Weaknesses

T: Threats

Customer Segments

Processes/ AcYviYes

Internal Resources

Inputs/ Partners


Product/ Service

ELEMENT ICON DESCRIPTION SYMBOL THEME:

CUSTOMER CS

PRODUCT PS

CHANNEL CH/CR

GOAL/JOB JTGD

PROBLEM Prob

VALUE VP

INPUT KP

INTERNAL RESOURCES

KR

PROCESS KA

SOLUTION Soln

Enterprise Periodic Table (EPT) of Business Model Elements: 10 QuesCons For Visually Designing and Using Tools Such as Brainstorming, Experiment Board, Business Model Canvas, Lean Canvas, Value Chain, and SIPOC Process Diagram


1

2

3

4

5

6

8

7

9

10

ELEMENT ICON DESCRIPTION SYMBOL THEME: QUESTION

CUSTOMER CS Who is the customer?

PRODUCT PS What is the product/service?

CHANNEL CH/CR How is the product/service delivered to customer?

GOAL/JOB JTGD What is the customer’s main goal (Job To Get Done: Physical/Intellectual/EmoYonal/Spiritual Hierarchy)?

PROBLEM Prob What are problems/pains/barriers/obstacles?

VALUE VP What is the big urgent problem/pain (soluYon/benefit)?

INPUT KP What are key inputs/partners?

INTERNAL RESOURCES

KR What are internal resources (people; infra’; technology)?

PROCESS KA What are key ac;vi;es or processes of the organiza;on?

SOLUTION Soln What are soluYons/gains/benefits?

Enterprise Periodic Table (EPT) of Business Model Elements: 10 QuesCons For Visually Designing and Using Tools Such as Brainstorming, Experiment Board, Business Model Canvas, Lean Canvas, Value Chain, and SIPOC Process Diagram


1

2

3

4

5

6

8

7

9

10



RED OCE

AN BLU

E OCEAN


C$ R$

P$

VP + -‐

What are soluYons/ gains/benefits?

Who is the customer?

What are problems/ barriers/obstacles?

How is product/service delivered to customer?

What is the product/service?

What is the customer’s main goal (Job To Get Done: Physical/Intellectual/EmoConal/Spiritual Hierarchy)?

What is the big urgent problem/pain (soluCon/benefit)?



RED OCE

AN BLU

E OCEAN


C$ R$

P$

VP + -‐






What are key

ac9vi9es or processes of the

organiza-‐9on?

What are internal resources (people;

infra’; tech-‐nology)?

What are key inputs/partners?





RED OCE

AN BLU

E OCEAN


C$ R$

P$

VP + -‐







What are key

ac9vi9es or processes of the

organiza-‐9on?

What are internal resources (people;

infra’; tech-‐nology)?

What are key inputs/partners?


1

2

3

4

5

6

87 9

10

Business Model Yacht Discover and Solve Customer Problems Be]er, Faster, and Cheaper

IntroducYon Today, startups as well as established organizaCons are struggling to discover and solve customer problems in a Cmely manner. On the one hand, tools such as brainstorming and lateral thinking are relaCvely simple to use but produce low quality soluCons. On the other hand, tools such as the Six Sigma methodology, Lean Startup method, and TRIZ generate high quality soluCons but take a long Cme to understand and effecCvely apply. Mastery of these laier tools is also Cme-‐consuming and expensive.

ObjecYve The Business Model Yacht is designed as a simple customizable worksheet that eliminates the trade-‐off of Complexity vs. Quality in tools such as brainstorming, lateral thinking, TRIZ, Six Sigma methodology, and the Lean Startup method. The Business Model (BM) Yacht can be considered as a “Wisdomsourcing” Board for collaboraCvely organizing and managing ideas while rapidly solving customer problems.

Delight The Business Model Yacht helps people to beier, faster, and cheaper solve problems. There are 8 levels of proficiency in using the Business Model (BM) Yacht. The first level of proficiency focuses on use of the BM Yacht as a problem discovery tool. At this first level, the BM Yacht can be learned and applied within 30 minutes especially as a tool for visually collecCng ideas on the Voice of the Customer. At the eighth level, use of the BM Yacht focuses on developing ideas on the evoluCon of business model ecosystems. Use of the BM Yacht at interme-‐diate levels ranges from product innovaCon, industry analysis, business model innovaCon to performance management.

Procedure (for Level 1 of the Business Model Yacht) 1.  Make a large (A1 size) printout or drawing of the template for the Business Model (BM) Yacht and place it on a table or wall. 2.  Write out a descripCon of the Customer Goal or “Job To Get Done”. 3.  Describe or list each problem (preferably using Post-‐It notes) under the Problem Space or “Red Ocean” on lem hand side. 4.  Choose the most important problem. (Why is the selected problem regarded as the most important? What are impacts of problem?) 5.  Generate, under the SoluCon Space or “Blue Ocean”, ideas for solving the most important problem. (Hint: Use analogical thinking.) 6.  Select the highest quality soluCon that can be rapidly implemented as well as which has the least cost.

References Kim, W.C.; Mauborgne, R. (2004) Blue Ocean Strategy. Massachuseis: Harvard Business Review Press.


ITENN Level 4: BUS. PROBLEM SOLVING q  4 Elements of Good Strategy q  Six Sigma Methodology q  Theory of Constraints q  Customer Dev. Stack q  Lean Startup Method

Level 5: VALUE CHAIN STRATEGY q  Value Chain (Analysis) q  5 Forces; Env. Analysis q  3 Generic Strategies q  DisrupYve InnovaYon Theory q  Blue Ocean Strategy/Canvas

Level 1: PROBLEM DISCOVERY q  Voice of the Customer; NPS q  Trade-‐offs; SWOT Analysis q  Red Ocean Strategy Canvas q  4 Problem Archetypes; BUMP q  Product/Market Matrix

Level 7: BUS. MODEL EXECUTION q  HolisYc System Resources q  Core Competences q  Resource-‐Based View q  Balanced Scorecard; Kanban q  Prototype/Pilot/Full Scale

Level 8: ECOSYSTEM EVOLUTION q  9 Windows (MulYscreen) q  Business Model Dashboard q  Nested S-‐Curve; WarGaming q  Value Network EvoluYon q  EvoluYon of Shared Value

Level 2: PROBLEM ANALYSIS q  5 Whys; AnalyYcal Hierarchy q  Root-‐cause Analysis: Fishbone q  SIPOC Process; Pre-‐mortem q  Universal System Structure q  FuncYonal Analysis Diagram

THE BUSINESS MODEL YACHT o  Uses; Areas of ApplicaCon o  Associated Concepts/Tools o  Taxonomy of Tools for

Problem Finding & Solving

Level 3: IDEA GEN./EVALUATION q  (Visual) Brainstorming q  E.R.I.C. TacYcs (“4 AcCons”) q  SCAMPERR Technique; ASIT q  TRIZ: Ideal Final Result (IFR) q  Mission/Vision; Pretotype

Level 6: BUS. MODEL STRATEGY q  Value Net; Lean Canvas q  Business Model Canvas/Env. q  Business Model Storyboard q  “SPARC” Yacht/Framework q  PESTLIED Events & Trends


8 LEVELS AND USES OF BUSINESS MODEL YACHT (Taxonomy of Problem-‐Based Strategy & Learning) Sense and Respond to Customer Problems Be]er, Faster, and Cheaper

Problem-‐Based Strategy and Learning (PBSL) Roadmap Select/Reflect on a Path or Program for Rapidly Sensing and Responding to Big Urgent Market Problems (BUMPs)

BUSINESS MODEL HIERARCHY (Unit of Analysis/ReDesign) LEVEL OF PBSL (Deliverable)

Supersystem (Economy; Macro-‐environment)

Environment (Industry; Market)

System (Enterprise/Value Chain; Product/Service)

Visionary/Conceptual Problem Solving (Feasible Pretotype)

1. PROBLEM DISCOVERY

2. PROBLEM ANALYSIS

3. IDEA GENERATION/EVALUATION

Strategic Problem Solving (Viable Prototype; Viable Pilot)

4. BUSINESS PROBLEM SOLVING

5. VALUE CHAIN STRATEGY

6. BUSINESS MODEL STRATEGY

TacCcal/ Op. Problem Solving (Profitable Full-‐scale)

7. BUSINESS MODEL EXECUTION

Scenario Thinking

8. ECOSYSTEM EVOLUTION


4 Problem Archetypes Product/Market Matrix


PROBLEM (Market Trade-‐off/Size)

SOLUTION (Product Features)

Known Unknown

Known Simple System (Tame; Closed; Well-‐structured)

Complex System

Unknown Complicated System ChaoYc System (Wicked; Open; Ill-‐structured)

4 HolisYc Strategies Product/Market Matrix


PROBLEM (Market Trade-‐off/Size)

SOLUTION (Product Features)

Known Unknown

Known

Unknown

PRETOTYPE

PROTOTYPE

PILOT

FULL SCALE

The TheoreYcal Framework of The Business Model Yacht

Is HolisYc Problem Solving (HPS)

Which Encapsulates ScienCfic Problem Solving HolisYc Problem Solving (HPS) has 3 Levels

q  Visionary/Conceptual Problem Solving q  Strategic Problem Solving q  TacCcal/OperaConal Problem Solving


Industry/Market/Customer Goal (Job To Get Done): Listen to music (at home/work/outdoors)


RED OCE

AN BLU

E OCEAN


C$ R$

P$

+ -‐

PS KP

KR

KA CS

CH& CR

VP




RED OCE

AN BLU

E OCEAN


C$ R$

P$

+ -‐

PS KP

KR

KA CS

CH& CR

q  Big/clunky music players

q  Complex: difficult to use

q  Small song storage

VP




RED OCE

AN BLU

E OCEAN


C$ R$

P$

+ -‐

PS KP

KR

KA CS

CH& CR




q  Ultra-‐portable digital music player

q  Simple: easy to use

q  Large song storage

VP




RED OCE

AN BLU

E OCEAN


C$ R$

P$

+ -‐

PS KP

KR

KA CS

CH& CR







q  “A Thousand Songs in Your Pocket” q  Seamless Music XP q  iPod Hardware




RED OCE

AN BLU

E OCEAN


C$ R$

P$

+ -‐

PS KP

KR

KA CS

CH& CR








q  High Profit Margin q  Extraordinary Profit q  Performance Metrics



RED OCE

AN BLU

E OCEAN


Value Engine


Customer Segments

Processes/ AcYviYes

Internal Resources

Inputs/ Partners


Product/ Service


P$

C$ R$ + -‐



RED OCE

AN BLU

E OCEAN


Customer Segments

Processes/ AcYviYes

Internal Resources

Inputs/ Partners


Product/ Service









C$ R$ + -‐

P$ q  High Profit Margin q  Extraordinary Profit q  Performance Metrics




RED OCE

AN BLU

E OCEAN


C$ R$

P$

+ -‐

q  Staff/Employees

q  Brand/Culture q  IP q  Infrastructure:

IT

q  Luxury Spot Strategy

q  Hardware/Somware Design

q  MarkeCng & Sales

q  Record companies

q  OEMs

q  Apple.com; Big Box Retailer

q  iTunes Store; Retail stores

q  Online/Face-‐to-‐Face; Lock-‐in

q  Luxury Spoier: Listen to music everywhere q  Customer Habit Engine

q  Staff/Employees q  Manufacturing/Infra’ q  MarkeCng & Sales

q  iPod Hardware q  iTunes q  Commissions

q  High Profit Margin q  Extraordinary Profit q  Performance Metrics









Product/ Service

Processes/ AcYviYes

Internal Resources

Inputs …

Customer Segments

RED OCE

AN BLU

E OCEAN




go?



Industry/Market/Customer Goal (Job To Get Done): Improve innovaCon and performance of organizaCon

Method (Strategy)

RED OCE

AN BLU

E OCEAN




CURRENT INNOVATION/PERFORMANCE FUTURE INNOVATION/PERFORMANCE


go?



Method (Strategy)

RED OCE

AN BLU

E OCEAN





go?


CURRENT INNOVATION/PERFORMANCE FUTURE INNOVATION/PERFORMANCE Method (Strategy)

RED OCE

AN BLU

E OCEAN


C$ R$

P$

VP + -‐




go?



RED OCE

AN BLU

E OCEAN


C$ R$

P$

VP + -‐




go?



PS KP

KR

KA CS

CH& CR



RED OCE

AN BLU

E OCEAN


C$ R$

P$

VP + -‐




go?



RED OCE

AN BLU

E OCEAN


C$ R$

P$

VP + -‐





RED OCE

AN BLU

E OCEAN


C$ R$

P$

VP + -‐



Lack of shared purpose, mission, and vision

Emphasis on technical features of products rather than customer experiences

Thinking in “silos”

No common language or framework for facilita9ng innova9on

Unar9culated values/culture

Unclear Business Model/Strategy




RED OCE

AN BLU

E OCEAN


PROFIT (MARGIN)

COST (STRUCTURE)

REVENUE (STREAMS)

Value Engine


Customer Segments

Channels & RelaYonships

Product/Service

Processes/ AcYviYes

Internal Resources

Inputs/ Partners

Lack of shared purpose, mission, and vision

Emphasis on technical features of products rather than customer experiences

Thinking in “silos”

No common language or framework for facilita9ng innova9on

Unar9culated values/culture

Unclear Business Model/Strategy

“It’s more fun to be a pirate than to join the navy."


RED OCE

AN BLU

E OCEAN


THE BUSINESS MODEL YACHT FOR PROBLEM-BASED STRATEGISTS: Save Time and Money While Using a...

Business

Transcript of THE BUSINESS MODEL YACHT FOR PROBLEM-BASED STRATEGISTS: Save Time and Money While Using a...