Source:
Umar Haque, The new capitalist manifesto: building a disruptively better business

Worth remembering for you is:

•  find out and map different views within your firm of the role your (or other) team should be filling,
• map out Business Model for each view using Business Model Canvas,
• learn about and map the differences between the different business models.

Sketch by Dan Roam presenting Business Model Canvas

Lessons to be learned are:

1. You can’t pick a little bit of each business model.
2. Why not use multiple business models?
3. Which business model is right is a strategic decision.

Source:
Business Model Analysis & the Link to Strategy by Tim Kastelle, blog Innovation Leadership Network

William A. Sahlman in the article How to write a great business plan, suggests these 14  “personal” questions:

1. Where is the founder from?
2. Where has he been educated?
3. Where has he worked and for whom?
4. What has he accomplished- professionally and personally- in the past?
5. What is his reputation in the business community?
6. What experience does he have that is directly relevant to the opportunity he is pursuing?
7. What skills, abilities, and knowledge does he have?
8. How realistic is he about the venture success and the tribulations it will face?
9. Who else needs to be on the team?
10. Is he prepared to recruit high quality people?
11. How will he respond to the adversity?
12. Does he have the mettle to make the inevitable hard choices that have to be made?
13. How committed is he to this venture?
14. What are his motivations?

But this is only part your presentations. Difficult enough. But logical on the other side. If you have other founders, they should be presented in the same way too. So, the point is, you should talk about the people involved exhaustively.

Other factors included should be:

• the opportunity,
• the context,
• risk and reward.

Good luck.

Source:
William A. Sahlman: How to write a great business plan, Harvard Business Review

Why is this book worth reading for?

1. Because the book is greatly designed. But really.
2. Because this book itself was published as a innovative business model. A book. How’s that possible?
3. Because this book can easily change your life.

If you don’t believe me, read this review.

A description of a business model in the book says that a business model describes the rationale of how an organisation creates, delivers and captures value. Wikipedia adds to that that value could be economic, social, or in other forms of value. From the experience in this book I would add that in the first place there is a design thinking needed to generate business models because you have to combine rational and intuitive thinking. Design thinking.

If you would like to remember only one thing about or from this book, then remember: business model canvas. It has nine building blocs, left side presents the rationale and the right side presents the intuitive part. The canvas covers four main areas of business:

• customers,
• offer,
• infrastructure, and
• financial viability.

In business model canvas the intuitive or value-side is presented by: + customer segments, + customer relationships, + channels, and + revenue streams. The rationale or cost-side of canvas includes: +key activities, + key resources, key partners, and cost structure. Bost side are connected with value propositions.

You may freely download business model canvas at the business model generation web-site. So until know, you probably know that design approach or design thinking is necessary in every innovative, competitive, and/or growth business model. Authors of the book have proven it on the case of this book, that is also a management book of the year 2011 in Germany at least. Dan Roam’s has designed great visual presentation of the business model with the best visual approach I’ve seen, presenting all nine building blocks of building model canvas:

SKETCH: DAN ROAM

In business model canvas you have already mentioned nine building blocks. On the left side you have so called rational: + key partners, + cost structure, and + key activities. On the right side you have: + customer segments, + customer relationships (excellently presented in Dan Roam’s sketch as ying:yang), and + channels. This is so called intuitive side. Both side are connected with the value propositions. The whole method demands therefore productive combination of rational and intuitive thinking, which is actually design thinking.

businessmodelgeneration.com, ICONS: XPLAIN

What other details could be of interest to you? Really a lot of them. The book had really great impact on me. I even managed, with the help of my twitter profile and my followers to get to the Business models workshop and Masterclass held in Munich. I can really recommend this workshop to you too. If you are from a start-up company, you will usually have the options by achieving an amount of re-tweets from your twitter profile to get the workshop for just 1 €. Check-out Business Model Generation events web-site.

Business model patterns are moodel with similar characteristic or behaviour and include patterns such as: + Unbundling, + the Long Tail, + Multi-Sided Platforms, + Free, and + Open Business Models.

On the broad scale business models could be divided into cost driven vs. value driven but many business models fall in between these two extremes. Business models with

• similar characteristics, or
• similar arrangements of business model building blocks, or of
• similar behaviours

are called business model patterns. Where it is worth knowing that a single business model can incorporate several of these patterns. Concepts described in this book include patterns such as: Unbundling, the Long Tail, Multi-Sided Platforms, Free, and Open Business Models. Every pattern is described with its context (before), challenge, solution (after), rationale, and really nice examples.

This part of the book helped me to find a way how to unbundle design services of my company. It is still very interesting to see the explanation of unbundling the business of mobile telecommunications firms, explained in the book on the cases of France Telekom, KPN and Vodafone. The author has mentioned also Bharti Airtel, one of the first mobile telcos that unbundled really in a strategic way, and is now one of India’s leading telcos focusing on its core competency: building Customer Relationships.

One other case was also very interesting, namely the transformation of the book publishing industry. Every author today has a possibility to publish his/hers book. Because the publishing business models have changed. While in the past the publishing houses had to decide if it’s profitable for them to copyedit, design, print and promote a book, today cost of self-publishing can be taken almost completely by the author with connection to publishing platforms like Lulu.com. And in case of failure nobody gets hurt (well, the self-esteem of the author, maybe).

SKETCH: business model innovation by resources

If you are going to try to sketch your business model remember: the entire business model design process should be guided from a customer perspective. The author calls it: it’s about THEM! Customer-centric business model design. It means shifting yours and everybody’s perspective away from YOU (as a organization or company). Away from organization-centric business model design. Just forget this perspective. Otherwise business model could also be:

• resource-driven,
• offer-driven,
• customer-driven,
• finance-driven,
• multiple-epicenter-driven.

The entire business model design process should be guided from a customer perspective. It’s about THEM! Customer-centric business model design. It means shifting yours and everybody’s perspective away from YOU (as a organization or company). Go away from organization-centric business model design.

Once you have your business model canvas you have the opportunity to look at your canvas from the broader environment. You should or could include the key trends, market forces, macroeconomic forces and industry forces. Add some other details like your team, finance… and you have almost completed business plan. But first test your business model. And this is the greatest advantage of business model generation, you don’t need to make a whole plan to see or realize if your idea/product/service works or not.

One other very interesting connection is with the Blue Ocean Strategy concept. Especially when you are developing/designing your value proposition it could be very useful and efficient to use four actions framework of what to eliminate, what to reduce, which factors to raise in which to create new? Or use the empathy map to design or find your customer profile. What does the person feel, what does she see, what does she say and do, and what does she hear. Out of that you’ll be able to find out your customer profile pains and gains.

SKETCH of blue ocean strategy in business model canvas

You don’t have to be some serious manager to design a business model. Sometimes it’s even better if you are not one. Because ideation is the crucial art to be mastered if you are to design a viable new business models. At least a little bit of creativity is therefore needed and we all know managers are not really creative most of the time. Children could do much better.

To warm up before you start designing or generating your business model you may use the silly cow exercise. Here’s how it works:

“Instruct participants to sketch out three different business models using a cow. Ask them to first define some characteristics of a cow (produces milk, eats all day, makes a mooing sound, etc.). Tell them to use those characteristics to come up with an innovative business model based on a cow. Give them three minutes.

Keep in mind that this exercise can backfire, as it is indeed quite silly. But it has been tested with senior executives, accountants, risk managers, and entrepreneurs, and usually is a great success. The goal is to take people out of their day-to-day business routines and show them how readily they can generate ideas by disconnecting from orthodoxies and letting their creative juices flow.” Danny Beckett Jr.

Innovative business model is more important if you wish to succeed than your great idea, product or service.

Prototyping of your next business model could be done at different scales: from napkin sketch to simple or elaborated business model canvas or to the field test. Remember that your breakthrough ideas may encounter strong resistance. Either inside your organisation or outside in your environment. Don’t let that stop you. Remember, innovative business model is more important if you wish to succeed than your idea, product or service.

For big picture assessment you may use simple or detailed SWOT assessment of each building block of the business model canvas. So you should be able to:

• first have a snapshot where are you now (strengths and weaknesses), and
• second you should be able to realize some future trajectories (opportunities and threats).

You don’t need a lot of knowledge about business to start your idea, because every business model design project is unique, so build your business models ASAP.

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SCHEME: ION INTERACTIVE

@ioninteractive have published this great picture. Imagine to have a publication that you could access and read/browse/explore/touch through:

• search engines – because if Google can’t find you you don’t exists, right?
• E-mail – still medium not to underestimate, especially if you read your e-mails on your mobile devices. Do you?
• LinkedIn, great platform for sharing experiences, not only through you profile but especially through groups of professionals joining to discuss subjects of their interest. So, do you use LinkedIn groups?
• Facebook. How to integrate this enormously popular medium into your publications? Definitely great opportunity of integrating your publication, don’t you think?
• Twitter. Yes, do you also think its very important to be present?
• Do you enable your users to print the content of your publication. Print-on-demand is in big demand. Already today we know print-on-demand devices like Espresso Book Machine. In 15 to 20 years an average home printer should be able to “spit out paperback” (WIRED).

Imagine to have a publication that you could access and read/browse/explore/touch through: search engines, email, LinkedIn, Facebook, Twitter, print(-on-demand), different displays, social (media), QR code and/or keywords. Yes, that what I would call integrate. Either your webpage, your publication or your report.

• Is your code according to standards that can work across platforms or media, or do you still use flash f.e.?
• Display. Great subject. Do you have the budget to develop an app for every display, tablet or other device that’s out there? Or will you rather use responsive (web) design principles and be easily readable across most devices?
• Social. Yes, there is more than Facebook, LinkedIn or Twitter. In Germany Xing is a platform used more then LinkedIn, f.e.. Which other social (media) do you like?
• QR codes. Enormous potential.
• Keywords. If you ask me, they lost some potential. Excerpt or short description are more important if you ask me but yes, if you publish in closed platforms, I guess keywords could help you.

Sources:

1. Scheme: @ioninteractive
2. Wired magazine: Clive Thompson on the Future of Printed Books, November 29, 2011, by Clive Thompson

My rating: 4 of 5 stars

Google was influenced by the theory presented in this book. Originally the Author Chris Anderson presented it as a article in the magazine Wired, as Editor in Chief. And Google was back then in 2001 “just” the fastest growing search engine on the planet. For the record, Google borrowed the business model that was pioneered by Bill Gross few years earlier. And Google has built the most affective Long Tail advertising machine the world has ever seen. And if only because of that this book is worth reading.

In short: Long Tail is “market” of millions of markets of dozens. Where market could be anything. Also something that author refers to like: “all-amateur, laptop culture”. Not written by the author of this book, but mentioned as the perfect example of Long Tail is on Wikipedia written definition of Long Tail.

Bottom line: a Long Tail is just culture unfiltered by economic scarcity. So, our culture is moving from a relatively small number of hits toward a huge number of niches in the tail. And this is what author explains in depth. Some cases being really interesting especially if you are not from USA but would like to learn something new about past decades in the States.

What enabled the Long Tail?
+ democratization of the production tools,
+ falling costs of consumption by democratized distribution,
+ connection between supply and demand.

Some more interesting details to me.
Internet is about filtering. And we had filters even in pre-online times. Just we didn’t notice them. Author divides filters into pre-filtes and post-filters. Cases for the first are: editors, record label scouts, studio executives, department store buyers, marketers, advertisers and cases for the later are blogs, playlists, reviews (like this ones on Goodreads), customers, recommendations, consumers. In Long Tail all you need are effective filters. You should be able to find what you want as you move down the Tail to your “nichebusters” (by Eric Schonfeld).

Very interesting to me author also explains or better to say de-constructs some other generally accepted theories or rules. Like 80/20 Rule of Pareto/Zipf distributions. In economy this rule is used to explain that 20 % of products account for 80 % of revenues. Or more generally that 20 % of our time accounts for 80% of our productivity. Originally Pareto observed and calculated that in his times about 20 % of population owned 80 % of the wealth. And what has Long Tail to do it? Nothing. Just don’t be discouraged by this rule because the Long Tail does work. Because we live in online era where different (economic) rules apply. If you sold Top 20 ring-tones for 80 % of sales in the newspaper era, this felt to just 40 % of sales when users could search online from nearly 20.000 ring-tones online.

Others Long Tail ideas:

• cool commercials you choose to watch
• presentations from conferences you wish you could have attended
• self-publishing market with BookSurge as leading print-on-demand business
• self-publishing as marketing vehicles to enhance your academic reputation, market your consultancy or earn you speaking fees or just leave your mark on the world
• services that aggregate only SEC filings

And did you know that ontology is a word that means different things in different disciplines?

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1. The contribution that business makes: creating the goods and services we all rely on, providing people with jobs and a sense of community,  and creating the financial prosperity that pays the taxes which support public services.
2. We need to match the sense of collective spirit, and build constructive cooperation between Government, regulators, investors and business.
3. We should look ahead where public sector and private sector reporting may converge more given the drive for efficiency in the public sector and the need for the private sector to better explain itself.

Ian Powell, PwC UK Chairman and Senior Partner. HTTP://WWW.UKMEDIACENTRE.PWC.COM

Source: http://pwc.blogs.com/corporatereporting/2011/10/showing-the-way-forward.html

What business’ are railroads in? In a railroad business? No. In a transportation business. It is very important to define your business correctly. Otherwise other will take your customer away. I guess because railroads do not understand that in full degree they are more often than not in trouble. And this claim is still valid no mater what new technologies or products/services arrive.

How to approach to the definition of your business?

First realizing that company’s most precious assets is its relationship with its customers. “What matters is not whom you know but how you are known to them.”

Second: if you are lucky enough that your business is in expanding market you should be aware of absence of thinking on defining your business. In either case you should always think how to expand the market of your business. Seeing that as a problem is great because if “thinking is an intellectual response to a problem, then the absence of a problem leads to the absence of thinking. “. So, management must not think of itself as merely providing products and/or services but as providing customer-creating value satisfaction.

Third. What does that mean for my specialized B2B design business? Specializing in integrated corporate reports design is only one side of this business. Corporate reporting has some similar touch points as publishing in general. But it is also specific. It is consisted of:

• audit or compliance with some standards. Financial standards are well known. Other, such as Global Reporting Initiative are yet to be widely accepted.
• design including the redaction of the content. This is the part that my company is able to cover well, as classical publication and completely as online presentation.
• publishing itself. Also very interesting point, especially because there is a growing interest not only in annual but also in corporate social responsibility (CSR) and sustainability reports.

So, service provider who will be able to cover all three aspects of reporting business will be the winner of the future. In my opinion.

Last but not least. If you are advertising agency. What business are you in? Advertising? No! As well presented in a cartoon by DDB, you are in de-commodification business.

Illustration by ddb.com

Source: What Business Are You In?: Classic Advice from Theodore Levitt by Theodore Levitt 1 pages. Publication date: Oct 01, 2006

In Funky Business  Forever authors also claim that in a real-time society, companies keep on publishing reports and balance sheets about atoms – machines, buildings, etc. – but do companies that way really capture the most critical assets by measuring that stuff? I think integrated reports could by joining environmental, social and governance activities (ESG) as a supplement with required financial statements greatly improve readability, effectiveness and help other to develop empathy (f.e. shareholders in case of annual reports) of the current reports.

As a design manager I believe that by creating and designing reports from the start in mind that in these real(online)-times the thickness of the reports binding is only (maybe) necessary but the real report should always be accessible online and interactive as wide as possible on every system available.

illustration from the Subject to change book