How do you come up with business models for three new concepts? We will give you the recipe here. Innopay – a Dutch company in payment knowledge and solutions – took this challenge with their people. See the results here. The movie is produced by Fish-Eye Media.
In November 2008 I had the opportunity to be trained in Graphic Facilitation by one of the founders and first practitioners David Sibbet (The Grove) from San Francisco (US). David practices this in strategy work for many many years now. Working on business models we understood that in order to deal with complex systems, you have to find a way to be able to communicate with larger groups. Graphic Facilitation makes the difference. It is a part of our way of working and thinking. Thanks to David. See below a video of David where he explains the power of visual meetings.
“Today’s special is Memphis Soul Stew. We sell so much of this stuff, people wonder what we put in it.” King Curtis wrote this song in 1967. It is an inspiration to me thinking of the recipe of business models. “What is the recipe people ask us?” Well, the cook book is Business Model Generation, as Alan Smith called his mission working on the book as a designer. The recipe is a special mix of ingredients made by Alex Osterwalder & Yves Pigneur. We will come back to that in our blog. The coming months you can attend several training courses @ Nyenrode University in The Netherlands on March 23/24, @ Namahn in Brussels on March 18th and @ London on 29th of April. In London Alan, Alex and me will be present. You can subscribe soon. But listen first… what he puts in there… I love it!
On our way to Århus Kaospilot training (Denmark) on Tuesday February 2, Andra and I were stuck at the Copenhagen airport due to snowstorms. Flights to Århus were cancelled. After staying over at the Copenhagen Airport Hotel (imagine a Fawlty Towers scene), which had nothing to do with Copenhagen or the airport, we managed to catch the flight the next day, and were late for 3 hours! Not the best way to start the day. But Pete Sims and Team 14 welcomed us over the group lunch served by the italian sandwich bar.
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!
Today I had the opportunity to meet the producer Sigurður Gísli Pálmasonof of the documentary Dreamland. The movie was playing at the International Docpoint filmfestival in Estonia, Tallinn. The movie about Iceland – a nation standing at the cross-road. See the trailer of the movie here below.
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.
Last week Alex Osterwalder was speaking at the Noorderslag/ Eurosonic event. Check out his interview here.
Last year BMInc. worked on more than 30 projects including start ups like Greenflower, SME like OCTO Technology and Corporates like a.o. KPN, BAT. No matter size or age these companies loved to build their business model with their own team. And not by post-its only. Their own business model visualized by BMInc. But that was just the start. They love to play with the model, develop new prototypes and to discuss outcomes.
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.
2009 was an amazing year for our young company. We started the Hub – where we wrote the book with Alex Osterwalder, Alan Smith, Yves Pigneur, Tim Clark and 470 co-creators- we test printed it and we had our book launch in Amsterdam in June.
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.
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:
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.
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.
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.
Last month Alex Osterwalder gave a 7 minutes talk on Business Model Innovation @ E-day in The Netherlands. See for your self. Alex Osterwalder will give a 188 minutes workshop at Nyenrode University, Breukelen, The Netherlands on the 13th of October.
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