We spent the first two days with Kaospilots Team 14 talking about and practicing the business model thinking. What are the business models of today? How can you come up with the business models yourself? How do models on social entrepreneurship look like? (thanks to Alex!). And how does the model of Kaospilots look like? This was an interesting question as the coming week we are working on an IT Academy model for Estonia. We were amazed by the positive energy and enthusiasm of Team 14; 2 days was simply too short to model all their ideas. Many business ideas were around social entrepreneurship, doing good for the community and saving the earth from more trash and stuff. Wonderful.

We spent Friday with Espen Sivertsen and the teams 15 and 15+. They work on an exciting project “better city, better life” for Expo 2010 Shanghai. Besides modeling the new ideas they were especially interested in the business model for the book. Part of their Shanghai assignment is to create the book with 100 concepts designed for a better city-better life, which will be presented in Shanghai.

Cool heads and warm hearts is what the Kaospilots stand for. And it is true. Entrepreneurship is an essential part of the Kaospilots program, but equally important is designing the life around one’s passion. We were inspired to work with these great people on some of our assignments.

Above is an example of graphic recording by one of the Kaospilots. Recognize the style? Wonderful to record your meetings like that.

Thanks, Kaospilots, for a wonderful week (incl. Peter Froberg). You rock!

What does Iceland have to do with business modeling one might ask? I’ll explain.

In 1918 Iceland became independent from Denmark. Iceland was recognized as fully-sovereign state. Now Iceland needed to become a sustainable state on its own. The problem was how to get the economy going in a small country (population is 300.000).

An opportunity came from the US. They requested Iceland to build large military bases in order to create a hub for Asia in times of war. In October 1946, the Icelandic and United States’ governments agreed to terminate U.S. responsibility for the defense of Iceland, but the United States retained certain rights at Keflavík, such as the right to re-establish a military presence there, should war threaten.The immediate post-war period was followed by substantial economic growth, driven by industrialisation of the fishing industry, foreign income through the military bases and Marshall aid. (picture below of the spectators in Tallinn).

The Americans left Iceland far after the cold war in 2006 whereas 2000 people lost their jobs. Now in the former military base there is a university campus. But how could Iceland find itself a new business model? The government offered the low energy prices and started negotiations with big corporations. Interest came from high energy consumers. Iceland became the largest aluminum producer in Western Europe, after allowing US based aluminum manufacturer Alcoa to built their plants in Iceland. To power the plant, the government started the largest mega project in the history of Iceland by building the largest dam in Europe. Alcoa could use now cheap electricity for an aluminum smelter in the rugged east fjords of Iceland. This model was bringing a lot of new jobs to Iceland. Alcoa became the new provider of prosperity but also the threat to the environment.

The financial crisis…

The financial crisis had hit Iceland hard. All three banks went bankrupt. Iceland took huge loans to cover the deficits from IMF, Nordic countries and Poland. It relied on few industries incl. aluminum sales to pull it out of the worst recession. The price of aluminum dropped and Iceland needs to look for new options. Options which don’t pollute the country and destroy the unique nature. Many options. Because it can’t rely on only one. Iceland should know now.

Besides our work on visualization of business models, as you can see here the BM of Sendsteps, BMInc. is developing now a tool in cooperation with Cantouch where you can build your visualized business model yourself. The tool includes more than 200 symbols/icons. And not only through a web-tool, but also through a multi-touch Cantouch table. That’s awesome. You can stand around this table with your team and work on your model together. It just feels like working together on a large Iphone. We will use this table during our training courses and strategy/ business model sessions. More to information about our release at the end of this month.

We met wonderful people from all over the world. We worked for new relations, organized workshops, did speeches for clients and events and really enjoyed it a lot! Time for a small party! We will organize it at Cafe Willemspark, Willemsparkweg in Amsterdam, The Netherlands. Our host, barman and DJ is our Italian friend Luigi. Let us know if you drop by. RSVP. Would be cool.

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:

1) Understand the essence. The Business Model Canvas serves as a visual grammar. By sketching out all the elements of the Canvas you immediately give viewers the bigger picture. Understanding a business model requires not only knowing the compositional elements, but also grasping the interdependencies between elements.

2) Enhance dialogue. You improve the dialogue by visualizing your model as a collective reference point. The business model canvas then serves as a shared language resulting in joint understanding.

3) Explore ideas. The canvas is like an artist’s canvas. It triggers ideas. And… provides the opportunity to play with the model and start the discussion.

4) Improve communication. When it comes to communicating a business model, a picture is truly worth a thousand words. A BM visual is the best way to create a company wide understanding. In fact, a way to sell the model internally and externally.

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:

1) Send us your Business Model (BM) in post-its, or written text
2) We will challenge you on your BM composition through ‘live’ discussion (skype)
3) We sketch your BM building blocks and their relationships in the style you like!
4) BM is sent to you for discussion
5) Edits are done if any on sketches and relationships
6) Coloring is done if any and re-sent for approval
7) On color approval and full payment final files will be sent.

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

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.