Dear visitors, we have moved to a different location. Finally to our own premises. You can now follow us on www.businessmodelsinc.com. Njoy the ride!
Dear visitors, we have moved to a different location. Finally to our own premises. You can now follow us on www.businessmodelsinc.com. Njoy the ride!
Visual thinking is indispensable to working with business models*. By visual thinking we mean using visual tools such as pictures, sketches, diagrams, post-it notes to construct and discuss meaning. Because business models are complex concepts composed of various building blocks and their interrelationships, it is difficult to truly understand a model without sketching it out.
We help you sketching out your business model in any style you would like to have. See here the example of Sellaband. Why is it so important to visualize your model? Sketching a model transforms it into a persistent object and a conceptual anchor to which discussions can always return. This is critical, because it shifts discourse from the abstract towards the concrete and greatly improves the quality of the debate. Typically, if you aim to improve an existing business model, visually depicting it will unearth logical gaps and facilitate their discussion. Similarly, if you are designing a completely new business model, drawing it will allow you to easily discuss different options by adding, removing or moving pictures around.
The benefits of visualization
Drawings can be more powerful than Post-it notes because people react more strongly to images than words. Pictures deliver messages instantly. Simple drawings can express ideas that otherwise require many words. Let’s examine four processes improved by visual thinking:
We do visualization for you! in 7 steps
Visualization of the business model is a very important step in our methodology. We see our clients ask us more and more to make that work. Also online. We help you visualize your business model in 7 steps:
If you need help on your business model to be visualized in any style, please contact us by skype, phone or email.
* source: Business Model Generation
Alex Osterwalder gave a 7 minutes presentation at Emerce Day in The Netherlands. See for yourself. He will do a bit longer workshop (188 minutes) on 13th of October in the Netherlands @ Nyenrode University, Breukelen.
It all started for me in March 2008 when I found Alex Osterwalders‘ business model presentations on the Web. In my company ULURU we innovated for companies such as Heineken, Tom Tom, ING etc. but we we had a hard time making business plans work. Why? There was no clue about a sound business model methodology. I thought it would be nice to get Alex over for a training for our clients (and for myself).
At that time Alex focused with his Arvetica firm on the private banking industry in Switzerland. “If there is enough interest, I might consider coming over to Holland” Alex said. And yes there was… In no-time we had a workshop full of interested and experienced business modelers from all over the world: New York, Istanbul, Turkey and the Netherlands.
After the workshop in Amsterdam April 22nd me and the participants asked Alex “When will you start working on your book…?” And Alex had to admit that it was about the time. At the end of the summer Alex decided to fully focus on the book. With full mental support of Yves Pigneur. We started to look for producers, designers and financing. More and more we concluded the book needed to be very special. We also needed to find a way to work together… or not. On October 27th we had a session together in Lausanne, Switzerland. We drew our visioning stories together. What would our future be like with or without a business model (book)? After a lovely dinner at Alex family home, we continued our brainstorming and came up with an action plan.
A special business model for the book
What is a business model book without an innovative and sound business model? That sucks! So we came with a special model. No publisher, no financing but a co-created book by people who want to be part of our journey. In december 2008 we started the Business Model Hub (www.businessmodelhub.com) where people could subscribe after a payment of 24 USD. They get access to the content, can comment on design and their name is printed in the book. After a couple of months we saw the number of members rising and so the subscription did as well. The last participant paid 243 USD.
Design thinking and business modeling
Alan Smith from The Movement joined a workshop of Alex last year. After Alex put a post on his blog about finding the right designer for the book, Alan responded immediately. We met together with Alex this year in London. For us it was immediately clear Alan could take design-wise the book to the next level. We were impressed from the start. And Alan kept his promise. The book is an amazing beautiful result of not design only but a very meaningful way of combining design thinking in management books. “I want to create a cook-book for management” Alan said meaning you want to make the recipe as soon as you open the book.
Prototyping of the book…
Part of Alex’ philosophy on business model innovation is design thinking. Prototyping is all about creating the options for your business model and shaping it as best as you can. On June 19th Alex launched the unfinished version of the book. 200 versions were printed for the participants. And.. it was a disaster. The pages were printed in the wrong order and the quality was not acceptable. “Prototyping is very meaningful!” Alex and Alan said.
A friend brought me into contact with Maarten Modderman. He immediately said that our special book deserves a better printing and finishing. He came with a book that has no “back”. The book is glued and sewed and that’s it. The book then feels like a workbook, if you open it on your desk it stays open all the time. More beautiful is even the finishing. A manually glued cardboard black printed cover resulting in a 1,2 kg book.
At the moment we are connecting our website http://www.businessmodelgeneration.com with an e-fulfillment center so shipment will be fully automated. Then the books will be shipped in the week of september 26th. The first print run contains 5.000 books of which already 1.500 are sold through our site.
The final book launch at Nyenrode University
Alex will come to The Netherlands – where it all started – on October 13th to run a workshop on business modeling… And… to present the book! You can subscribe through the website of Focus Conferences (contact: KristelVeerman at firstname.lastname@example.org). Our blog readers will get a special price for Alex workshop incl. the book € 395.-
Life after the launch?
So is there any life after the launch? Alex is happy that he finished the book. But there is more to come. Speeches, a new platform, white papers, tools for business modeling, workshops and so on… And for me? I found it fantastic applying Alex’ methodology in combination with visual thinking for clients. Improving our methodology and creating products for business modelers. And the book – not even shipped – brings me into contact with wonderful people all over the world. For me the journey just started. With an amazing team: Alex, Yves, Alan, Tim and our Hub! Looking forward continuing the journey…
Although strategy consultant Ouke Arts had seen many businessess and business models before – he had a hard time figuring out how the model of Sellaband exactly works. How does their model differentiate from the established music industry players? Who are the clients of Sellaband? What are their activities? How do they sell their services? What are their core assets and how do they make money in the end?
Ouke could not imagine he was the only one trying to put the pieces of the puzzle together. Would it be an idea to visualize the business model? Ouke contacted Sellaband owner Johan Vosmeijer to arrange a meeting to explore their business model. I (Patrick) joined Ouke and together with Johan we put the post-it notes in the Business Model Canvas. Interesting. We understood the business model is a Multi Sided Platform. This means that Sellaband brings together two or more distinct but interdependent groups of customers. Such platforms are only of value if the other group of customers is also present (source: Business Model Generation book by Alex Osterwalder and Yves Pigneur). In this case the Believers, Artists and Music Buyers. Johan got excited about the results of the session and said: “I would love to put the visualized model in my room so I do not need to explain it all the time.”
Together with Wouter Boog (JAM) we worked on the visualisation of the model. We translated the Business Model Canvas with post-it notes to visuals. According to the visual design process JAM developed, we first understand what the several elements are. Then we try to understand their relationship. The Canvas helps as the 9 building blocks are put in the right order. By means of several discussions and feedback Wouter drew the first version.
Ouke and I went back to meet Sellaband with a big poster drawn by Wouter. Now we had a meeting with Sellabands’ General Manager Dagmar Heijmans. We put the poster on the table and started a discussion. Can you explain us your business model? Are there things missing? We had a very interesting discussion how Sellaband is working on his business model from the start, creating various prototypes, learning by doing. But what is the advantage of this visual? “Let’s bring the other colleagues to the table” Ouke said. Dagmar invited his colleagues and the discussion started again. “Wow!”, one of the new colleagues said. “Now I know exactly how Sellaband is making their money.” “Very powerful tool!” We concluded that Sellaband now has a common language when it comes to their business model.
We concluded ourselves that the model of Sellaband is a very good example of how a complex business model at first sight can be easily explained through visualization with the canvas. The Sellaband model now serves as a case study in the Business Model Generation book that will be released in September 2009. You can read all about it in the book.
Today in the Dutch newspaper “De Telegraaf” an article was posted about the fall of revenue of Notaries/Solicitors of 30 to 40%. “A big war” is going on between Notary offices who lower their rates in order to keep up with the competition. Or in other words… in order to survive. “200 notaries united to fight the battle because the market enforced the prices going down!” “The New Stamp” will put an end to lower prices. Anyone who charges lower prices will be friendly asked not to do so. AMAZING. Mmm… do Notaries wear sunglasses? Are they too blind to see what their clients really want?
But where have we seen strong decrease in revenue before? CD-sales? In the music industry? Where established firms like e.g Warner was outperformed by newcomers with new business models like Sellaband? In the car industry? In the airline industry where Ryanair and Easyjet rule the market nowadays?
What should Notaries do nowadays… ? I think they should understand that they can not change the market but rather themselves should adjust to the changes. Why? Clients do not see the added value of their services as contracts are available on the Internet. Their services are not transparent. Why paying € 1.400 for setting up a company? Or € 1.200 for wedding papers? Can Notaries do something about it? YES they CAN! Take off their sunglasses and do BUSINESS MODEL INNOVATION!
Take a look at the practices in the other regions, Estonia for example. Looking at Estonia would not be your first thought. However, we can learn a lot from them. The idea is to facilitate the entrepreneur in boosting the economy (not the Notaries bank account). For setting up a business you have 2 options: 1) through the Internet (if no notary is required) and option 2: at Notary office. And do you know what the second option costs you? Depending on the number of parties involved and the transaction volume you pay for a BV (Dutch Limited Company) only € 70!
Being served by an Estonian Notary feels like flying Easyjet. A different model. No over the top offices, no staff overload, no Notary with Mont Blanc pencils but just a beautiful designed office where you can shop for a Notary signature in only 20 minutes. By the way in the public computer corner you can pay your bill online. Pick up and delivery of papers on the next day. Wow Dutch Notaries… what about that?
Have you ever experienced the wonderful feeling of driving an electric scooter bike? Today I did. WOW! During the lunch break of our Business Modeling session with the Dutch based company QWIC run by Taco Anema and Michiel Hartman I had the opportunity. Sailing on your bike with no sound at all through the busy streets of Amsterdam-Zuid. Wonderful. I’d love to have one! See how Jan Selen (JAM) visualized my moves in this picture here…
During our session together with Twenty Twenty – Minnemijn Smit en Foris Croon – we explored different models. Strange. People are still afraid that they are not able to reload their accu. But how many fuel stations do we have near our home? Do we have the opportunity to get fuel at home? No! So? Afraid to do something environmental friendly? And what about the models? Freemium? Charge for accu’s only? A subscription or lease?
Anyway, I don’t care. My next car is a QWIC!
Great conferences, high energy, great speakers and dito audience. Do you see all the stickies on the participants? We did a physical tagging exercise. A must for every event! And… the book is ready for sale.
Last Friday 60 participants from more than 12 countries came together to talk about “Business Models” in “Hotel De Goudfazant” in Amsterdam. The 1st Business Model Knowledge Fair was organized by Business Models Inc. in order to stimulate business model thinking. Cool was that Alex Osterwalder used this occasion to soft launch his book “Business Model Generation.” A photo album is created by JAM here.
The day started with a vision on Business Models by Alex Osterwalder, where are we today and what do we need to do in the near future to make Business Models work for us! He also assessed with the audience what works and doesn’t work with the Business Model Canvas. Then an interview was held with the book team incl. Yves Pigneur, Alan Smith, Tim Clark, Alex Osterwalder and Patrick van der Pijl. A beautiful video was shot by Fish-eye click here.
In the Business Model Carousel, real life practices on business model implementation were presented amongst others DSM by Bas van Oosterhout, Seats2meet.com by Marielle Sijgers and National Archive by Harry Verwayen.
Collectors item! Finally the BOOK arrived! A courier brought the fresh prints from the print house. We printed a limited edition of 200 copies in black and white. BUT, what happened?!@# The book pages were not printed the way Alan designed it. Now the effect of strong relation between left and right hand print is gone… Lessons learned on prototyping! The book will be launched in September and can be pre-ordered with 25% discount here.
In order to stimulate the interactivity with the audience we were tagging each other with stickers (see pictures) and Sendsteps used their technology to welcome people through SMS and also to ask them questions during the session. Answers were send by SMS and the results were broadcasted on screen. Amazing!
But how do you communicate something difficult such as a business model? Mike Overdijk (JAM) first explained us the Visual Design Process. How you make a design out of a white paper? (greenfield). And then it all started! Jan Selen motived people to start drawing… Mike instructed the participants to interview each other and draw a business model. You can see the results here in the picture.
In the afternoon Tim Clark (entrepreneur, author, editor) took us on a journey to show the cultural impact on business models and especially in Japan where he has worked many years. Alan Smith (designer The Movement) showed us principles of Design thinking which plays an important role in the book.
Are we able to explain the success of the Hub and our community per today? And what is needed and wanted in the near future? How can we succeed? Martijn Pater (Fronteer Strategy), showed us the guiding principles of co-creation and how the Hub meets these criteria. Amazing! Then we were brainstorming with the participants on the needs and wants…
“Great energy! very good line up of speakers, promising book! and the network of people here was very interesting! thanks for that! were some of the feedback we got from last Friday. Thanks to all participants! the book team, Marielle, Bas, Martijn, Hylke (our student), 3M (for materials), Tim, Alan, Yves, Alex, JAM, Fish-eye and see you next year!
Many companies had a proper working business model with a revenue model included. Actually, more and more companies understand that there models become obsolete due to changes in their environment. Credit crisis, the changing behavior of the consumer, the role of Internet and (unlimited) access to knowledge and information has resulted in traditional models becoming meaningless and that we have to find new models.
But how do we cope with the changing environment? McKinsey found that the lifecycle of companies is becoming shorter from 90 years in 1935 to 15 years in 2005. The credit crisis will have a big impact on this. Every organization should evaluate their business model in a continuous basis.
And how do we come up with new business models? Can we find new revenue models? How do we find a model that suits our company? First, we can learn from other companies. But by means of copying a model does not mean it will work for you.
This fall we look into this subject together with C.K. Prahalad, Professor of Strategy University of Michigan, and Alex Osterwalder, PhD Business Modeling at University of Lausanne. Their books “The new age of innovation” and “Business Model Generation” (this book is to be launched in August this year) will serve as a basis for our college serie at Nyenrode University (Breukelen, The Netherlands). Look here for more details (Dutch).
The colleges combine strategic, practical, organizational change, design, Internet and theory information on Business Models. Business Models Inc., Patrick van der Pijl, and Jille Sol will run a workshop on Business Modeling on the 20th of October as part of this program. Vincent Everts, Paul Louis Iske and Dirk-Jan Abbringh are running colleges as well. We believe this is a major step in Business Model Thinking where Focus Conferences and especially Kristel Veerman has put a step forward in putting this program and people together. Hope to see you this fall.
On May 6th I was running a workshop together with Ouke Arts of PricewaterhouseCoopers on Open Business Model Innovation. LEF Open Innovation (@ Media Plaza Utrecht) had put an interesting program together to discuss the topic “What is open innovation?” Open Innovation is a term promoted by Henry Chesbrough (Prof. University of Berkeley). The idea behind open innovation is that companies work with other companies on innovation. They either source it in, or source it out (eg. patents they do not use).
Just at the time I needed to do prepare the workshop Alex Osterwalder and Yves Pigneur released their book chunk on Open Business Models on the Hub. Alex describes here the difference between the outside in and inside out approach. Very visual presentation on how these business models work. Examples of Glaxo and Proctor & Gamble included.
But how does open innovation work for the participants of the workshop? During our workshop they audience had difficulties in coming up with a definition. Is it that you work close together on the innovation process with other companies? But what if a company recently invented an idea or concept and you start working with them rightaway? Is that inside out open business models? Or is it just smart sourcing? Anyhow, we had great discussions, people helped each other with describing business models and we concluded: Invent your business model! Inside, outside and upside down! (you can take a look at our slide pack here).
Today is a Free day! Alex Osterwalder posted his book chunk about Free as a Business Model on the Hub. What is actually a free business model? As Alex describes it is a “business model where at least one customer segment is able to continuously benefit from a free offer. It usually financed by another part of the business model or another customer segment.” The chunk describes great examples on Advertising (Metro), Freemium (Flickr, Skype, Insurance!) and the Bait and Hook model. You can find out more on our Business Model Hub. At the moment we are working with more than 350 members from 44 countries and we have 10 more chunks to go…
Peter Froberg – one of our members on the Hub – from Denmark introduced a great example on a Free Business Model: Freemium on his blog: Flat World Knowledge. Actually a model that looks interesting. Something we would have loved when we were students. Look at the movie of Flat World Knowledge. (sorry, I could not plug it in here).
But what is free actually? Free does not represent any value, does it? Nothing is for free… In the end someone has to pay… Either the client (a segment) or the advertiser or the government.
Striking is that Tata introduced a new car… The Tata Nano. It was first introduced on the Auto Expo (Jan 2008). A cheap, basic designed and environmental friendly car (very economical) . The car will be on sales on July 2009. But is this business model innovation? What do you think? Yes, making cars available for everyone… Same as India did with the public transport 😉
Yes, I think they use cheap labor, they produce for the local market (India) and… the distribute through Internet. You can buy your Tata Nano Online here. Online? Yes, as the options are limited (color of the car only), Internet suits as a distribution channel here.
See here a video on this topic.. thx to Innovation Management.
The Business Model Knowledge Fair and Book Launch Party on June 19 2009 in Amsterdam (register now for early-bird rate) is coming. There are still some chunks to be delivered… for thebusiness model book, but I’m really looking forward to the event. It will be a special day where we have working sessions around the book content and share knowledge and experience with business model practitioners! It will be a unique and particular event and you will get a limited special launch edition of the book.
As a reader of my blog you get a special discount off the entry price. I offer you a nice 10% (discount registration code: “bizmodelblog10”).
Please note our presentation enclosed here won the “best presentation of the day by slideshare”!
While publishers and newspapers have a hard time facing advertising income going down… Niche players – the new family/small businesses – finance their websites – and family – with advertising income. A great video on the Long Tail… Njoy.
Alphons Geerlings – founder of De Merkplaats (“the brand bay”) – opened my eyes with his remarkable business model. “It is simple” he says. “If I go to a restaurant – btw we go to Van Harte a lot – , I know exactly what I need to pay. “ And that is exactly the way his business works. “We are very transparent in our costs although we are a servicing and consulting company. The services incl. prices for a quick scan, registration and support are presented in their first email and client contact.” What is interesting is that De Merkplaats can manage everything through email and phone. No meetings required. “And if you insist to drop by, we charge you an hourly fee.” For issues around trademarks – such as ‘stealing’ URL’s – Alphons charges a fixed rate based on some hours of work. “I ensure my clients we fix it in this amount of time.
“But what about YOUR business model Patrick? Can you tell me exactly what you do and what you will deliver in a half-day session? What can I tell my clients?”. “Wow Alphons, I am suppose to be the business modeler here” I said thinking about what to answer. “I facilitate a session, help clients with business plans, financial modeling and implement their new models.” “Interesting” Alphons said “but as a client I only want to pay for a short session”… Very interesting thought… “A kind of Easyjet model where you pay for a standard service (the flight) and pay more for additional services.
Inspiration for new models in consulting? His easy and transparent model makes me also think of new models for the consulting industry. Working with fixed prices for standard services such as a workshop, a phonecall, a presentation and so on. Different rates if you want to drop by at their office. But that requires a huge turn around of their current model. Mmm… interesting new opportunities.
Trading brands… And Alphons continues his journey. He sees clients want more and more services. “My clients are interested not only in registration and protection of their trademarks, but also to come up with new brands.” He helps them developing, buying and selling their brands. Some companies have registered trademarks in their safe while other companies are desperately looking for registered trademarks. It is a new service and it is very enjoyable. It IS actually a becoming a Merkplaats or Brand Bay now…
CC proof – a new global product. Last week we did a session on business modeling with the Merkplaats/CCProof team Kim Zuijderwijk, Mirjam Mollema and and CCProof ambassadors at the beautiful channel house of De Merkplaats in Amsterdam. With CC Proof you can now easily register your ideas and concepts in writing or visualized digitally. No need to hire a notary, lawyer or go to the tax authorities. But there is more… You can also submit your idea for review by third parties eg. TV production companies, Advertising agencies and so on. Or… CC Proof can also support you in developing your idea.
We put the Business Model Canvas on the wall and started to brainstorm. Who are our clients? What is the channel we use? Who are our strategic partners? What are additional services? Carel Alberts walked during our brainstorm and connected the post-its to the central issues we need to address. He also helped me facilitating. “I have been teaching the whole day and I know this model and especially how to make the team do the talking” 😉 Result of the workshop is an action plan, monthly sessions @ CC Proof office and… you can book Business Model 4 hour sessions with a transparent and fixed price at the beautiful gracht/channel house of Alphons.
This weekend I had a business modeling sessions with Niels and Ulbe Spaans and Erik Clignett. They just started their a film & communication company Fisheye. The new business model what they will introduce in May is amazing. It is a complete new model in the communication industry. More news on my blog soon…
Our session took place in Konigsleiten, a beautiful small village in the Austrian mountains close to Gerlos. We spend some time on the slope as part of our program. Wonderful. There we saw a great tool on the terrace while we had a drink (see picture). A camera, a touchscreen.. in the corner of the terrace. And a line up of people. What is it about? You could make a picture for free and send it to your friends over email. Really cool! Ain’t that a nice system for your company/bar to advertise for free? See the results – in the second picture – the email that you will receive. It is a picture accompanied with a URL of the ski resort.
A lot of companies are working on Innovation despite the financial crisis. Many spend time on generating new ideas and concepts. Few ask themselves the most important question: “Where is the money?”
Here a movie – imagine yourself being Jerry …
Today I had a meeting with George Steltman. George – former Deloitte consultant – served CFO’s by streamlining their finance function. What he noticed is that CFO’s asks themselves this question too late. They do not look towards the future but they look at the past. They should help their CEO by asking this one question: “Where is the money ?”
George developed a financial model connected to the business model canvas. Here he identifies costs, revenues and results based on the different scenarios set by clients. “Where can we reduce costs?” “How can we optimize our channels” Where can we find revenue generators?” More to come about this model in the very near future…
I am very familiar with the Funeral Industry being raised with my twin-brother Alex in a six feet under family in Amsterdam. We considered it normal that we had to be quiet if families visited our (funeral) home…
Our first job was the Hearse and the Cadillac Fleetwood when we were only 12 years old. When I was 18 I started to work in the night shifts as I had some time left as a student to make money. The night shifts meant taking care of the loved one from picking up, washing, clothing and presentation. Amazing experience. I saw life from a different perspective. Death as a subject was something common in our family. But death itself is always sudden and comes unexpectedly. I always remembered how wonderful it was to be able to do something for a family who lost their loved one.
But is the industry innovative? I think it is. To some extent. New coffins, new memorial cards, new cars, new way of ceremonies, digital tombstones. Of course, the same as you would expect in any other industry. But business model innovation is hard. At least, not so much adapted by funeral directors. A model that is adapted is the so I call it broker or intermediary model. A funeral home is for many services like tombstones, print, coffee and lunches, advertising, care rental and cemeteries a broker. Putting a revenue share on these services is fair especially as funeral homes are invoicing the family for that.
Alex – my brother – introduced last year a new concept: Budget Funerals. First you think it has only to do with the revenue. But, the model is smart. Budget funerals offers a different value proposition and uses different resources. The funeral is much cheaper because the service is at the funeral home and not at the cemetery or cremation center. You save costs on transport and carriage. The funeral home determines the time for the funeral. Very early morning or late afternoon. Depending on the capacity.
“Digital Graveyards” like Tributes.com, Legacy.com, Respectance.com and Memory-of.com are booming. Some are free. Some you need to pay of you do not want toothpaste advertising on your digital tombstone. But is this business model innovation? I don’t think so. It is just an Internet service. These sites offer families the opportunities to remember their loved ones forever. More and more we would like to have a digital space to remember our loved ones as well. Strange is that these services are not supported by funeral homes yet. They still offer the regular services including print advertising and remembrance cards. Herinneringsplaats.nl, a Dutch initiative in cooperation with Memory-of.com is an interesting business model invention. The resources are from Memory-of.com (US backoffice with Dutch design) and the distribution channel of the funeral home (Dunweg and vd Putten) is used. Based on the relationship with the family the funeral home sells this service as part of a funeral. Yes, they SELL the service. A one year subscription costs 40 euros. Two weeks after introduction the herinneringsplaats.nl initiative is promising. 4 out of 5 families buy access. And a single memorial site is visited in average by 100 people for 4 or 5 times in a week. Good food for advertisers.
We are very proud to inform you that Business Models Inc. is official partner of The Grove, San Francisco. The Grove – founded by David Sibbet – is the global thought-leader on visualization and change. Business Models Inc. is using their methodology to facilitate workshops with clients in combination with business model design. Being partner means that we can sell their visual tools through our website. You will receive a one time 15% off for your first purchase. Please use this link for their shop.
David Sibbet will perform a training on graphic facilitation in 11th/12th June, Paris. For more information contact us.
De world is shaking and shivering… We are experiencing the biggest crisis ever. We do not know what impact the recession will have… Companies go bankrupt, people lose their jobs and as a result of this… No one moves… Everyone stops spending. What to do? The ultimate challenge for 2009 is to maintain your revenue and at the same time increase your market share as a result of that. A marketing revival? See here how you should perform Recession Marketing…
No 1: Reconnect With Your Clients
Your clients have changed since the last 3 months. The order of their values have changed considerably. Security, safety, cocooning, discipline, order, confidentiality and family life are top of their agenda. You think you know your clients but actually you do NOT. Take a close look at your client segment. Analyze your client behavior, not only from your desk but visit them and have a chat. In the crisis not all segments are affected in the same way. Families with children are hit, the families without kids will probably have more dinners at home. Youngsters will hardly change their behavior and the grey and old do not consume that much.
No 2: Innovate Smart During Recession
Innovation is a must. The crisis doesn’t change that. We identify radical, smart and strategic innovations. Radical innovations, creating complete new markets, are still possible. In fact, they are so close because of technological developments and despite the crisis will just continue. Smart innovations are about maintaining the revenue and market share in the current market. The idea is to create small connected innovations to improve the product and to inspire and surprise your clients (crisis packaging, Nokia silence booth) . Strategic innovations are in fact innovations on your business model. Innovations on business models are necessary to survive in the industry. Take for example a swatch with a ski-pass inside. Innovation needs to speed up! Do not waste your time on research but try (trial & error).
No 3: Don’t Go Silent
Mostly companies are inclined not to invest and to reduce costs. That is easy. All your competitors will do so. Easy to stand out by doing the opposite. But invest on smart ideas. “When times are good, you should advertise. When times are bad, you MUST advertise.”
N0 4: Encourage Creativity
Don’t do what normal managers would do. Look at your creatives. Don’t focus on cost reduction but on creativity. Do let fear run your mood… Welcome uncertainty. Njoy the process and not only the output. Focus instead of meeting and all kind of overhead tasks.
No 5: Sharing and Cooperation Will Increase Opportunities
You are not alone! One of the patterns in business modeling is creating partnerships and make it work. It is about your strategic partners, suppliers, people, distribution and customer relationships. Study your value chain and brainstorm on new products that you can deliver with your partners. Look at the bigger picture. Who can help you? Make friends! Unexpected friends…
But what do all these rules need? Leadership. And leadership starts with believe and trust in yourself. If you don’t think you can manage? You won’t! Leadership is needed as well as passion, energy and pugnacity. Motivation will make the difference. Leadership is about paying attention and serving as an example. Be visible. “A leader is a dealer in hope” (Napoleon Bonaparte).
These Golden Rules are inspired from the book “Recessie Marketing” by Roland and Rogier van Kralingen.
I am very happy to inform you that Alex Osterwalder found time to visit The Netherlands in March for a training on business modeling. As you know Alex is writing the book on the businessmodelhub and still has 14 book chunks to go until the end of May as the book will be launched in June. The training will be about the business model methodology, a look around in the world what’s happening on business models (Nespresso, Skype, Easyjet and many others) and Alex will train you how to describe, assess and innovate your own business model.
We offer you this workshop with a different business model. A crisis model. We can offer you the workshop for only € 450 for a full day including drinks and lunch. Thanks to Ronald van den Hoff (owner Seats2meet) who supports our thinking and location ;-).
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In 2008 we learn that the top 10 of Fortune 500 companies Energy represents 60% of the ranking, the Car industry 20%, Banking 10% (ING) and Retail 10% (Wal-mart on number 1). How would the ranking nowadays look like in February 2009? Who is going to replace the position of the Car and Banking industry?
Take a look at the industries now during financial crisis. Are there any crisis sustainable models to find? In the Energy industry we see Exxon and Chevron boosted there revenues. Maybe as a result of the oil barrel price going down from 147 to 35 in 4 months time. In the Industrials Cargill reports profits whereas BASF and Sabic cut costs sharply. Aviation is hit strongly for Boeing and Airbus after cancellation of orders. No need to talk about the Car industry. All carmakers – if still exist – cut costs. Fiat mentioned 2008 as their toughest year ever.
In Transport Iberia sees her profits go down by 90% while Easyjet sees more and more passengers. Easyjet is taking measures as the board has an internal conflict about their strategy. Sir Stelios wants to limit the expansion of the airline’s fleet to a minimum in the face of the deepening recession.
P&G (Retail & Consumer) sees their first loss since 2001. P&G is exploring the web as a new strategy. Starbucks is cutting costs and closing stores. Is this a result of the crisis or also coffee sold through new competitor McDonalds? WSJ online reports it is not easy for McDonalds to sell coffee as consumers prefer to make coffee at home now and franchisees are not willing to invest USD 100k on infrastructure. Still McDonalds is a winner. Like Wal-Mart, McDonald’s has been one of those companies that has proven itself resilient despite our ongoing and serious recession. And of course, it’s obvious both companies appeal to consumers because they provide wares for those on tight budgets. Amazon, the world’s largest online retailer, saw its shares jump more than 10 per cent as it announced quarterly sales that outperformed both its bricks-and-mortar competitors and the US e-commerce sector as a whole.
In Transport Airlines see a drop of 22% in cargo. Fedex is reporting a downturn in revenue as well as Singapore harbour. The business model of the successful Somalia Pirates is also questioned now as more and more vessels find protection from different countries. 😉
This short journey along the industries show that there are sustainable models. Tendency towards the lower priced products. However, in the same industries we see out performers (!) with better business models eg. Exxon (!) vs. Shell, McDonalds (!) vs Burger King, Amazon (!) vs. Ebay, Easyjet (!) vs. KLM.
To be continued traveling through other industries next week… as Motorola, Cisco and Walt Disney will come with their figures…
I can’t believe what came across when I was speaking to an Italian guy at the airport. Venice is launching an online service enabling visitors to prepay for access to public toilets. Tourists who plan ahead – can you imagine! – can get a cheaper day or week-long passes to public toilets from February by visiting the city’s municipal website. The online day rate for two visits is 1 EURO in low season and 2 EURO in the high season. If you can find a toilet in Venice cause I found on the web that its not easy. It costs 7 EURO online for 10 toilet visits during a five-day period in the tourist high season and 5 EURO in the low season saving 2 EURO on each ticket. The pass is an attempt by the city , which hosts about 20 million visitors a year, to curb tourists from urinating in the streets. What do you think? A successful model? Let’s keep an eye on this peeing model.
I am blogging here not only about business models but also about my journey to produce the business model book in cooperation with Alex Osterwalder (business model guru). I think it is an interesting and exciting process worth sharing with you as we try to achieve something that is never done before!
We do not just write, produce and sell a book. We apply a different business model for the book. But what is so different about our business model? First, we write the book in an open source environment. On the Business Model Hub we write together with more than 200 interested people in business models from 28 different countries. Second, we hired our own designers from Toronto, The Movement. Third, we do not work together with a publisher. We publish the book ourselves and have it printed on demand. Fourth, we sell the book before it is finally written. Through different distribution channels (more info to come). Planning book release June this year.
Friday 23rd and Saturday 24th of January we sat together in London with designer Alan Smith (The Movement) and author Alex Osterwalder to discuss the design of the book. Here Alan guided us through the process of designing the book from research to completion. Really interesting to see how design can support the thinking and essence of the book. The process we discussed is going to be very special. Not only Alex is involved in the review. Also the Hub plays an important role. This means the Hub is involved in the design process. Really cool! Next steps… the name of the book and the design of the cover.
Businessmodelhub.com is a big success! We wanted to create a platform where people all over the world can exchange knowledge on business modeling. This as a pre-release of our book “Crafting Innovative Business Models”.
We launched the site in Mid November 2008 with little promotion and on January 12th we had 200 members – who all paid access of USD 24 – from more than 25 countries (a.o. Chile, Brazil, New Zealand, India, Mexico, Denmark, UK, Bolivia, USA). More than 200 different discussions are held on business modeling. Amazing to see the energy and passion…
Last year I visited the Vizthink conference in Berlin (12-14 October). Here I met inspiring people such as Dave Gray (who I met in the bar with his cool t-shirt: “I am blogging this”) and David Sibbet who trained me on graphical facilitation (see picture).
My purpose was to find a way applying visual thinking with business modeling.
The result was a training/try-out where I combined Business Model thinking and drawing. We performed our training during the Vizthink gathering in The Netherlands. JAM and Business Models Inc. were the facilitators. The evaluation was great. People really liked it!
So…. Ryan and Tom (organization Vizthink) asked us to come over to San Jose in February to organize a training during Vizthink ’09! So cool. We keep you posted… And if you want to come… subscribe at the webpage… http://www.vizthink.com.
First of all I would like to wish you all the best for 2009!
As we still need to recover from the financial downturn as a result of the credit crisis I have some Intentions for you on Business Modeling in 2009:
I strongly believe if you can stick to your Intentions this year, it will be a promising 2009!
Cheers from Asia!!!
2008 is a recession we have never seen before… Amazing! I thought after crisis like the Internet bubble and Enron we have had the worse. What I see now is that people and companies start looking at themselves… laying off people and cutting the budgets. But what to expect if you stop investing in time and resources? 2009 needs to be the trigger for this turning point…
What is interesting about these economic downturns is that it can create opportunities… New and smaller parties will come up, those who have not wasted their time staring at their own organizations…
The history is full of these examples… Companies and industries emerged as a result of market dislocations. I will mention a few…
Out of one of the darkest depressions around 1873 the telephone was born as well as General Electric and the lightbulb. The panic of 1910 made Ford come up with an new way of thinking about operations and manufacturing. The oil crisis in 1973 marked the birth of the personal computer and the recession of the early 1980s gave us the proliferation if PC’s led by Microsoft, IBM, and Apple. The invention of the World Wide Web and the commercialization of the Internet coincided with the recession of the early 1990s (which really started in 1987 with Black Monday), and out of the ashes of the dot-com bubble came companies such as Google, Amazon.com and eBay, with new business models that have upended the way we innovate, transact commerce, and communicate. And the current crisis starting with the banks and continued with the bubble of Madoff…
The real smart entrepreneurs will not get along with the cutting budgets and laying off people. They have more important things to do! The will create the turning point in 2009 by means of finding new business models that will make things work…
This article was inspired by Jeff Stibel, Harvard Business Online
In May 2009 we will bring a new management book to the market with Yves Pigneur and Alexander Osterwalder. The book will be a beautiful manual for entrepreneurs and executives about business model innovation. But… We apply a different business model for that 😉
If you are interested in the topic you now have the exclusive possibility to get early access to the book content and a community of business model innovators. It is a unique opportunity to participate in the makings of a management book that has the potential to become a global bestseller. Working title: “Crafting Innovative Business Models” (ideas welcome). We will float and discuss the book content as it emerges onwww.businessmodelhub.com. Access will only cost you $US 24.-
On Monday January 19. 2009 at 17:00 (CET, Zurich/Geneva) we will hold a free webinar to explain how the book chunk project works.
At the JAM office in Amsterdam we recently performed a pilot training on Business Modeling and Visualization. As we claim that you need to visualize your business model, we would like to try this out through a pilot at the Vizthink NL gathering in The Netherlands.
But how to do that? Are people able to draw? Do they think it is fun?
The training was set-up as follows:
Fun was that Jan and Mike (JAM) taught the audience to draw. They started with ‘just’ drawing, then to the basics of drawing (people, figures, lines, symbols) and also movement, emotions and composition. I was very surprised that I could learn so much from these guys. In my
consulting career I never had this kind of training. Then we gave the pencils to the audience and asked them to come up with a new inspiring business model. Amazing to see the energy flow and the results of their business models. The evaluation was very positive.
People claimed that they were inspired in a different way by starting to draw right away. More to come next year in our Business Model and Drawing training!
Last night the first meeting of the Dutch Media Professionals (DMP) was held in the “Rode Hoed” In Amsterdam, The Netherlands. The DMP is a successful linkedin community that grew to 4.000 members in only a couple of weeks time. The event was around “the New News”. What happens if the user gets all the content for free?
Almar Latour manager editor Wall Street Journal online elaborated on their choice for their business model. Initially some wanted to give the content for free, some wanted to be paid for. At the moment WSJ has 1 mln online subscribers each paying approx. $100 to $150 per year. Almar explained that the choice for their business model was found by means of experimenting and understanding the behavior of their subscribers. Free users enter sideways, have general interests (politics, lifestyle) and are NOT familiar with the Journal. Subscribers who pay for content WANT to pay for content as they have special interest. As a result of this WSJ started to develop both a free website and a paid subscription website specially designed for the audience. Free subscribers site is different, it has tools, widgets and newsreel.
Another discussion was around business models of free and paid for newspapers. Bart Brouwers (chief editor free newspaper Sp!ts) and Barbara van Beukering (chief editor Parool). Basically the newspaper is either paid by the reader/ subscriber or the advertiser. But advertising is decreasing. A huge problem. What are the newspapers doing to resolve this? Het Parool started to expand their business model into a new area:selling wines, dvd’s and books to their audience. By this means they are less dependent on advertising. The free newspaper Sp!ts had a very interesting new revenue stream. Besides advertorials and advertising they use guaranteed content. By this mean the advertiser will get – besides their add – a positive news item content-managed by the Sp!its. In the debate it was questioned whether this is right in terms of free press and the role of the journalists. A poll in the audience showed that only 20% was worried about this development. Bart explained that they are exploring new business models every day and this is not the last model they will come up with…
I always wanted to run my own model agency. And now I do. On business models. It is called Business Models Inc. This agency draws, describes and improves business models through offering support, organizing speeches, training courses and workshops worldwide. I work closely together with the experts on business modeling Alexander Osterwalder and Yves Pigneur.
Our focus is to create an online and offline platform for business modelers. The Business Model Hub. Here we want to connect business modelers all over the world. Here people can learn all about business modeling, share experiences and develop new connections. We will provide training courses online, tools for business modeling and you can watch videos of leading business people.
Curious about our business model? We are too! We do know what we are aiming for but we don’t know what we will find on our way. And that’s very exciting! We will assess models, check out nice models, models that pay off, models that do not pay off.
Want to be part of our journey? Follow my blog. Here I will keep you up to date. I will inform you on the business people we talk to, how explore our own business model, and whom we work with to make it work. So are you ready? I am. Continuing the journey…
Talking about business models examples I believe Nespresso is one of the most popular case studies. But why do we always use Nespresso as an example? Nespresso is sexy. Nespresso is hot. Nespresso is easy to
understand. And people love to talk about it.
I often use Nespresso in our training courses and client strategy workshops. But what is so special about the Nespresso model? I think that people do not realize that it took Nespresso 30 years to get where it is now. Their patent was registered in 1976 and it was launched internationally in 1991. George Cloony – very strong connected to the brand – was hired in 2006. For me there are on a high level 2 elements of the business model that are remarkable.
1. Nespresso uses different channels to distribute to their clients. Except for the easiest channel: the supermarket. Where nowadays we see supermarkets are becoming more powerful than the production companies such as Unilever and Proctor & Gamble, Nespresso is able to pass the supermarket channel.
2. Nespresso knows everything about his clients. Amazing. They connect you through their Nespresso club and they make it work. An example I experienced myself. I got a second hand machine from one of my clients and I tried to order cups. A callcenter called me and registered all my information. “What is your machine ID?” they asked. “Mmm… that is not your machine isn’t it? It is from 72dpi! Wow! Last month I bought my own machine as the other broke down finally. Their service in the shop was excellent. I took home a huge pack of all kind of coffee flavors. Yesterday I got a phone call from Nespresso club. “How are you, do you like our product?”. Yes I said but at the moment I try to drink the less favorite blends. “No problem” she said. “Just serve it to your guests!” “And… can I help you with ordering the new blends then?” Fantastic. This is service in optima forma. I love it. That’s why I love to use this example. A lot to learn from Nespresso.
Do you want to read more about this case study? On page 236 of Business Model Generation you can read all details and their next business model!
The visualization was made by Xplane.