Author Archive

14 Tips for Entrepreneurs to build a business model innovation

Monday, September 12th, 2016

How do entrepreneurs develop a business model that is highly scalable, unique, loved by customers, a money-making machine, disrupt an industry, be a unicorns and just work 4-hours per week? In this post, you find the golden keys to success. Guaranteed!

Well, not really. A 4 hour work week might work for Tim Ferries, but you as an entrepreneur have to find the business model that fits your customers and you. That is the right stuff. Building a great business model is work, much of it. You can make every mistake by yourself or you can have a more structured and highly creative approach to building a sustainable business model.

In the following slide deck, I give you my 14 tips how you can become a better entrepreneur. Still, it is you who has to do the thinking, the learning and the work. You can read as many smart books as possible. You are unique. You are not Steve Jobs or Tim Ferries. You are you. So make the best out of your potential.

Hopefully, the deck will help you to find your “The Right stuff”.

 

Steve Jobs on values in your business model

Monday, June 20th, 2016

Team and corporate valuesBusiness Modeling is often seen as process to rearrange the building blocks to an innovative business model. What people forget is that a business model is not just the building plan of your business but also should give answer to the question “Why should your business exist from a customer perspective?” So a business model is not just a building plan but also how you give meaning to your customers and your employees.

Values comes in different forms in the business model: First, it is the value proposition. You propose to your customers what value you will create for them when they engage with you. The second is your values and believes you share among the team that makes a great company. These two values are soft factors and sometimes fluffy. However, they are the foundation so that you can capture the economic value with your revenue model. These values make the difference.

Just watch Steve Jobs on values. And then apply that to your business model and your value proposition. You see, the value proposition has absolutely nothing to do with your product. So what is your core belief? What are your values? What do you stand for?

Simple questions, very difficult answers. Answer them. Try. Try again until you know what you stand for.

Your core values as starting point for business model innovation

Very few firms have very strong values and keep them over many years. But these values make the difference between ordinary good companies and great companies. Do you want to be great? Then work on your value proposition and your values. That gives meaning to you and your customers!

Who is in charge of business model innovation?

Monday, February 15th, 2016

Business Model Innovation State of MindIn recent posts, I looked at the right boxes to think in and the process to develop an innovative business model, it is now time to look at the people who are suppose to innovate the business model in large corporations. This seems to be a simple question and in large corporation there should be a person in charge and capable of execution.

But wait.

Let’s take a look at a traditional organization, the people there and their ability to execute business model innovations.

The Strategists?

Officially, the strategy guys take the big picture view on a firm. But most of strategists are very detached from the real business and particularly customers. They talk about markets, read Gartner technology forecasts and predict the future by analyzing the past, but most of them have never met a customer in person and have never programmed or have developed a product that is later sold. Most have a background in analytics and large consulting companies.

They are very detached from business but think they know where business should be moving to.

The Marketeers?

The marketing guys unfortunately forgot that originally marketing was about the whole business with their (more…)

Book on Business Model Innovation

Monday, November 30th, 2015

Normally, we do not use the blog for announcements, however we have two good news that we want to share with you. First, a workbook for startups was just released and second, we have teamed up with Orange Hills to form fluidminds Australia.

New Book on “Starting with the Right Business Model”

Das Richtige gründen: Werkzeugkasten für Unternehmer Patrick StählerThe book Das Richtige gründen: Werkzeugkasten für Unternehmer” or “Starting the Right stuff: Toolbox for entrepreneurs” is just being released. It’s a workbook with which entrepreneurs can develop from an idea a business model that works or as we say: “Das Richtige” or “The Right Stuff”.

With the book entrepreneurs can, based on customer & market insights, design the four elements of a business model:

Besides the building blocks, we give guidance how to start the process to find the right thing. Good business model design starts with customer & market insights and testing early the basic assumption. We believe that not the Minimal Viable Product (MVP) should be tested but the Minimal Viable Business Model (MVBM) where you test the value proposition, your offer and the distribution & communication channels before going full speed ahead.

The book is written in witty, precise and almost humorous language and designed to inspire people to get out of their comfort zone. We want to inspire big thinking, at the same time we force entrepreneurs to be precise in what they want to start with. Any great vision starts with something relevant customers want and buy.

In the book, we unveil the secrets of the business models of German and Swiss companies that are global, but often hidden champions. In my humble opinion we focus too much on American multinationals or Internet companies when writing case studies on interesting business model innovators. We forget that in economically successful countries like Germany or Switzerland, we have many Mittelstand companies or mid-sized family owned businesses that are suppliers of core technology to the world but not known in the world. So if you want to learn about German and Swiss powerhouses, you have to learn German to read the book or find a publisher that is willing to translate the book ;-).

The book was produced together with Thomas Meyer, a well known Swiss author, and Fritz Gottschalk, a doyen of Swiss graphic design (Remember the font Helvetica or Frutiger? All fonts from Swiss designers). Two of our core values, we shared in the team, were beauty and reduction to the essentials. If we succeed is up the judgment of our readers.

Wolfsburg AG, the innovation agency of Volkswagen AG and the city of Wolfsburg, sponsored our team. We are very grateful for their support.

So far, the book is available only in German, but we are open to other languages. You can buy the book in any German bookstore, Amazon.de or Amazon.com. More information on my German Blog Das-Richtige-gruenden.de.

fluidminds Pty Ltd., the business model innovator in Australia

My company, fluidminds Inc., joined forces in Australia with Norbert Haehnel and Orange Hills. The result is our joined company fluidminds Pty Ltd. based in Sydney. Norbert is a seasoned manager in the high-tech industry who wants to bring business model innovation to Australia.

Australia is an interesting turf for business model innovation since the country is still heavily depended on the export of raw material to the rest of the world. Business Model Innovation can and will help Australia to be less depended (more…)

We “totally screwed up”: Values and Behaviors in Volkswagen business model

Tuesday, September 22nd, 2015

Value unequal behaviorVolkswagen, the world’s second-biggest carmaker admitted that it has been dishonest with customers and regulators. It has installed a software in its cars that falsifies emissions data of its diesel cars. Unfortunately, it is a perfect example where the values promised to customers and the real behavior outright contradict. And because of the mismatch, Volkswagen is in a perfect storm.

Volkswagen faces a fines up to $18bn, criminal charges against its executives and legal actions from customers. At the same time a third of its market value was wiped out or the a staggering amount of around €30bn.

The head of the US operations of Volkswagen admitted that they “totally screwed up“. And I hope he meant the deed and not the disaster afterwards.

What happened? Volkswagen had to admit that 11 million of its diesel cars could be equipped with software to cheat on emission tests. The American Environmental Protection Agency (EPA) had accused the firm of faking pollution tests and thereby cheating on regulators, the public and customers.

The case is already bad enough, but what is even worse is that the deed and the behavior that lead to the deed totally contradicts what Volkswagen promises in its value proposition.

Volkswagen states in its brand three core messages of which one is: Responsible

According to the Webster, responsible means to be “able to choose for oneself between right and wrong

Volkswagen always played the role of the company with high morals. Responsibility was their core value they wanted to pursue and used heftly in their marketing.

And cheating deliberately on emission test is just the opposite of being able to differentiate what is right or wrong. Cheating is wrong! And it is not cheating software but the whole behavior that let a whole company come up with a software to cheat. Dozens and more people at Volkswagen must have known this and did nothing against.

What does this tell us about the culture they have at the firm?

Unfortunately a lot.

And unfortunately, the car industry has a bad track record between their promises and reality when it comes to emission and fuel consumption. The car manufacturers promise low fuel consumption however, they can only be achieved in unrealistic test scenarios and not on the road. Actually, it’s legal but totally against what Volkswagen promises to be responsible.

And as a responsible company you should live up to your standards and do not try to seek loopholes in regulation to mislead customers and the public. Still car companies do.

Not your stated values are reality but your behavior in your business (model)

The deed is actually not the worst. The worst is (more…)

The offer is only one building block to fulfill the value proposition

Tuesday, June 16th, 2015

One of the beauties of the business model thinking is that we learn to see a business totally different if we really apply stringent thinking and dissect a business into its building blocks. And one of the most important concepts is that the value proposition is not the product. Why?All elements of a business model have to fulfill the value proposition

It’s not the product that creates value but the value proposition. The whole value architecture including the product, the revenue model and the team & values all have to deliver the value the value proposition is proposing.

Deadly business with a value proposition that customers and democracies need

A simple, a bit eccentric example illustrates this. Take manstopper ammunition that is for very good reasons banned by the Hague Convention in international warfare.

Manstopper ammunition does not sound like a lovable product and in terms of Alex canvas as a good value proposition?

Actually, manstopper ammunition is the offer and not the value proposition. A good, and even meaningful value proposition depends from your customers, the job-to-be-done and the benefit you create for your customers. (more…)

The missing part for business model innovation: The process

Wednesday, November 12th, 2014

Recently, I had an intensive discussion with David Siegel who just moved to Zurich. His big idea is business agility and he is so right since the missing part in business model innovation is the process moving from your current business model to a better future. He calls it business agility. We at fluidminds use Rethinking business and Entrepreneurial Design for the process.

Business Agility, Rethinking business, Entrepreneurial Design, Design Thinking, Discovery-driven planning…

Entrepreneurial Design ProcessRegardless what wording we use, what we need is a process that helps companies to develop innovative business models that customers, employees and the owners love.

Today, two processes exit in companies that could be used: the innovation process and the strategic planning process. The names of the processes suggest that they could be useful, however in reality the opposite is the case.

Why? They lack agility and experiments. Both processes have the hidden assumption that with more and better planning you can anticipate the future. Both are focused on existing products and markets. These tacit assumptions might be right for a world of sustaining innovations, in a world of more-of-the-same.

But, and that is a BIG BUT, not in a world which is radically changing. Business model innovations have a disruptive character and focus on the whole business model. There is a need for business model innovations in any industry due to the Internet, the demand for clean energy, globalization, and due to the rise of Asia.

Therefore, almost every firm needs a different approach to innovation and strategy.

The future is not about prediction but about shaping the future with agile experimentation on what works and what does not work

Regardless how much you plan, you will not predict the future because neither customers nor companies can anticipate what is possible. The only way to push for radical innovation is to accept the uncertainty and thereby accepting that with more traditional planning we can not predict the future. (more…)

Innovation is about being different

Tuesday, April 15th, 2014

What is innovation?

Innovation is a strange beast. Most people say innovation is about new technology or bringing new things to the market. Some might think of better processes.

Schumpeter went further and defined it as “The introduction of new goods (…), new methods of production (…), the opening of new markets (…), the conquest of new sources of supply  (…) and the carrying out of a new organization of any industry”. (Source: Innovation Zen)

Innovation is about being different

However, what most of the time is missing, is that innovation has something to do about being positively different from your competitors. When every body in your industry is bringing out new products like in the TV set industry or in the PC industry, then this is no innovation. It is just daily business. You have to do it to survive. It’s a rat race.

Innovation is about being different in a way customers love.

Innovation is about being different in a way customers love.

However, successful innovation is different. Successful innovation is about being different.

Innovation is….

Innovation is when you just offer one telephone handset when your competitor offers 118 devices. Innovation is when you update your one phone only once a year a bit and a major overhaul comes every second year while your competitors bring new devices to the market every months. Innovation is when you see your “telephone” not as a device but as an access gate to whole new world. That’s Apple vs. Nokia. By the way Apple spent only a ninth on R&D than Nokia (more…)

The abundance of choice. A call for a fresh value proposition: The need for the right choice.

Friday, December 20th, 2013

Ever since we have the Internet everything is abundant. So many information at your fingertip, billions of webpages, millions of articles on Wikipedia, millions of articles at Amazon and other hundred of thousands of specialized ecommerce shops with even more articles. But is more choice always better?

Abundance of choice is today the norm. That is due to the Internet. A physical shop is always limited by its physical space. The Internet knows no limit.

The right choice not more choiceWhen I started my research on business model innovation in 1997 we were pretty much alone in this field. Actually, we had no word to describe the profound changes in industry structures due to the emergence of the Internet at that time. The term business model innovation just popped up in 2000 as a pure academic accident. I just added innovation to business model, a term that emerge in the 1990s and I secured the URL business-model-innovation. Today, Google gives me 190.000.000 hits for the term business model innovation. So you have abundance of sources of information about business model innovation. However, can you use them all?

More choice the better: The value proposition of the first wave of Internet ventures

The first battle cry in e-commerce and on the web was that now people have more choice than ever. More choice, the better was the value proposition. There was no limitation any more. You find any product today on the web in thousands of variations.
Sport Conrad, one of the largest online shops for skis in Europe, (more…)

Business Model Innovation in the EU and beyond

Monday, October 14th, 2013

Business Model Thinking is coming more and more mainstream. On Friday, I was at a workshop sponsored by the EU commission on Business Model Innovation and Policy Making. Here are my takeaways.

Business Model Innovation on the top of the agenda for policy makers

I’m very happy that the topic we started more than 15 years ago will be part of the future innovation policy of the EU. 15 years is a long time for me as a person, but as the business professor Christoph Zott is pointing out in science and policy making 15 years is a short time particularly when you want to introduce new units analysis to understand how firms outperform or create über-returns with (business model) innovation.

Policy making in need for innovation by xkcd

Business Model Innovators as outperformers

While we as entrepreneurs do not care much about measuring the impact of business model innovation on a societal level, the EU or the OECD, that also participated, want to measure each countries performance on business model innovation and then define policies to foster business model innovation on a governmental level.

Most papers presented at the workshop had a strong focus on the technocratic parts of a business model like Value Creation, Value Capture and Value Proposition but were missing the human side to business, the people who run a business, make the difference in innovation but are also the biggest impediments to change.

Pieter Perett and his team from the University of Applied Science Northwestern Switzerland, who organized the workshop, presented their findings that business model innovation make a strong impact on the long-term performance of firms. They use statistical data to identify business model innovators and they try to calculate if there is a über-return for these business model innovators.

Edward Giesen, Head of BMI at IBM, presented their study on business model innovation. They use a different method. Instead of measuring the impact of business model innovation from statistical data, they interview CEOs on the importance of business model innovation, and they see that companies that are consider themselves as business model innovators are outperforming traditional product or process innovators.

Christian Zott, who published one of the first works on business models in 2001 and is a strong advocate for business models, criticized from a scientist point of view the methods to measure the impact of business model innovation. His main point is that business models are often defined too broadly so it is difficult to understand where the real impact was in the business model.

I liked his criticism a lot from a scientist point of view and his focus on rigidity, however his proposal to focus only on the activities might be rigid but then the concept of business models looses its relevancy and its magic to see new boxes, entrepreneurs have never thought of as points of innovation like the revenue model, the value proposition or the Team & Value side of a business.

Where’s the beef?

Hans-Jörg Bullinger, former Head of the German Fraunhofer-Gesellschaft, criticized that the studies are interesting from a scientific point of view, however, they do not help to overcome our technology bias. His call for action was that we need better tools to design business models for entrepreneurs. Of course, I loved his objection, since this is exactly, what we do with the upcoming tool box for entrepreneurs. (more…)