At the Endeavor Summit 2013 in San Francisco we presented a way to design your business model for the future.

1. Is your business
model ready for
the future?
Endeavor San Francisco, June 21st 2013
Lisa Kay Solomon and Patrick van der Pijl

2. @patrickpijl
@lisakaysolomon

3. WARNING!

4. IT’S
FRIDAY

5. AND WE WILL WORK
HARD THE NEXT
TWO HOURS!

6. WHAT WE DO IN 2
HOURS TIME
TODAY?

7. DESIGNING BETTER BUSINESSESTraditional business models are
dead…

8. We need new tools…

9. We need new skills and mindsets…

10. And stop writing business plans!

11. FIRST AN
INTRODUCTION

12. DESIGNING BETTER BUSINESSES

13. DESIGNING BETTER BUSINESSES

14. SON OF..

15. DESIGNING BETTER BUSINESSES

16. DESIGNING BETTER BUSINESSES

17. DESIGNING BETTER BUSINESSES

22. DESIGNING BETTER BUSINESSES

24. DESIGNING BETTER BUSINESSES

25. LET’S CHANGE THE
BUSINESS MODEL OF
THE PUBLISHING
INDUSTRY!

26. In November 2008 we started an
online platform

27. Every participant paid 24 USD

28. $24.

29. $36.

30. $54.

31. $81.

32. $243.

33. so why did people participate and
pay?
?!

34. people love being trendy & want to be
the first

35. people want to be part of something
BIGGER and prove it

36. and it’s all about communities (of
practitioners or passionates)

39. + 600.000 books
+ 26 translations♯

40. WE NEED TO
RETHINK THE WAY
WE DO BUSINESS!

41. TODAY…

42. …WE SEE FORCES
WE HAVEN’T SEEN
BEFORE…

43. …I CALL THEM
NEW RULES
OF THE BUSINESS
GAME.

44. DRIVER #
1

45. SUSTAINABILITY

46. DESIGNING BETTER BUSINESSES

47. Driver #
2

48. CREDIT CRISIS

49. DESIGNING BETTER BUSINESSES

50. DESIGNING BETTER BUSINESSES

51. Driver #
3

52. “IT’S MY TURN”
ECONOMY

53. UPCOMING
MARKETS

54. DESIGNING BETTER BUSINESSES

55. OR MARKETS THAT
CAME UP?

56. DESIGNING BETTER BUSINESSES

58. Driver #
4

59. DIFFERENT
CUSTOMER
BEHAVIOR

60. generation
y

63. Driver #
5

64. THE ONLINE
REVOLUTION

67. Driver #
6

68. TECHNOLOGY

70. SOME EXAMPLES OF
BUSINESS MODELS
WE SEE RIGHT
NOW…

71. RE-IMAGINATION
NEWS AND
INFORMATION
FLOW…

72. From reporters...

73. …to twitter

74. RE-IMAGINATION OF
BOOKS

75. From books...!

76. …to kindle

77. RE-IMAGINATION OF
CALLING A CAB

78. From waiting in the rain...

79. …to a single push of a button

80. RE-IMAGINATION OF
VIDEO

81. From video store...

82. …to youtube

83. RE-IMAGINATION OF
NAVIGATION

84. From map...

85. …to navigon

86. SO...

87. DE WORLD HAS
REALLY CHANGED.

88. BUT DO YOU SEE
THIS ALSO?

90. NEW PROBLEMS…

91. REQUIRE NEW TOOLS

92. REQUIRE NEW
SKILLS

93. REQUIRE NEW
MINDSETS

94. SO WHAT ARE NEW
TOOLS?

95. WHAT IS A
BUSINESS MODEL?

97. DESIGNING BETTER BUSINESSES

98. WHAT ARE
BUSINESS MODELS?

100. DESIGNING BETTER BUSINESSES

101. IMAGINE
(BOARDROOM)
CONVERSATIONS…

106. CLAYTON
CHRISTENSEN

107. WE NEED NEW
TOOLS TO
UNDERSTAND AND
CRAFT NEW
BUSINESS MODELS

108. A business model describes
the rationale of how an
organization creates, delivers
and captures value
Definition_Business Model

109. BUSINESS MODEL
CANVAS
THE

110. Building
Blocks9

111. Who is my customer?!
images by JAM!

112. What is my value proposition?!
images by JAM!

113. What channels will I use?!
images by JAM!

114. What relationship do I entertain?!
images by JAM!

115. What is my revenue stream?!
images by JAM!

116. What are my key resources?!
images by JAM!

117. What are the key activities?!
images by JAM!

118. Who are my key partners?!
images by JAM!

119. How does the cost structure look like?!
images by JAM!

120. customer
segments!
key
partners!
cost
structure!
revenue
streams!distribution
channels!
customer
relationships!
key
activities!
key
resources!
value
proposition!
images by JAM!

121. Let us look at the business model
of Nespresso

124. OFFER
DISTRIBUTION
CHANNELS
CUSTOMER
RELATIONSHIPS
CUSTOMER
SEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEY
ACTIVITIES
PARTNER
NETWORK
KEY
RESOURCES
The Business Model of Nespresso
Households
Retail
Mail
Order
Nespresso
Club
Production
B2C
Distribution Marketing
B2C
Distribution
Production Marketing
Machine
Manufacturer
1 x Machine
Sales
Repetitive
Pad Sales
Business
Call
Center
Nespresso
Stores
Nespresso
.com
Nespresso
Machines
Nespresso
Pads
Patents Brand
Coffee
Production
Facilities
Distribution
Channels

125. Partners! Proposition! Relation! Customers!
Channels!
Activities!
Resources!
Costs! Revenues!

130. WHAT ABOUT YOUR
BUSINESS MODEL?

131. “What does your current
business model look like?”
Interview your neighbor and define his or
her current business model. Spend 10
minutes each.

132. OFFER
DISTRIBUTION
CHANNELS
CUSTOMER
RELATIONSHIPS
CUSTOMER
SEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEY
ACTIVITIES
PARTNER
NETWORK
KEY
RESOURCES
The Business Model of Consulting
Any client
Hours High rates
Blah
Blah
Blah
Blah
Blah
Reports

133. VALUE
PROPOSITION
What
customer
needs
do
we
satisfy?
What
problem
do
we
help
our
customers
solve?
What
advantages
do
our
products
and
services
provide
our
customers
with?
What
products
and
services
do
we
deliver
to
our
customers?
CHANNELS
Through
what
channels
do
we
deliver
our
products
and
services?
CUSTOMER
RELATIONSHIPS
What
kind
of
relationship
do
we
maintain
with
our
customers?
Personal
contact?
Automatic?
Self-­‐
service?
CUSTOMER
SEGMENTS
Who
is
our
customer?
For
whom
do
we
create
value?
Can
we
distinguish
different
customer
segments?
REVENUE STREAMS
What
revenue
streams
do
we
generate?
What
is
the
size
of
each
revenue
stream?
COST STRUCTURE
What
are
the
inherent
costs
in
our
current
business
model?
What
is
the
size
of
each
cost?
KEY
ACTIVITIES
What
type
of
key
activities
do
we
perform?
KEY
PARTNERS
Who
are
our
key
partners?
What
is
our
motivation
to
work
with
partners?
What
key
resources
do
we
acquire
through
partners?
What
key
activities
do
our
partners
perform?
KEY
RESOURCES
What
key
resources
does
our
proposition
require?
Physical?
Intellectual?
Human?
Financial?
CURRENT BUSINESS MODEL

134. “WHAT DOES YOUR
CURRENT BUSINESS MODEL
LOOK LIKE?”
INTERVIEW YOUR NEIGHBOR AND DEFINE
HIS OR HER CURRENT BUSINESS MODEL.
SPEND 10 MINUTES EACH.

135. SO NOW YOU HAVE
PUT YOUR MODEL
TOGETHER…

136. IS IT READY FOR THE
FUTURE?

137. LETS LOOK INTO THE
BUSINESS MODEL
MECHANICS…

138. DEF: BUSINESS MODEL MECHANICS
THE INNER WORKINGS OF AN
ORGANIZATION’S BUSINESS MODEL.
HOW THE BUILDING BLOCKS OF A
BUSINESS MODEL WORK TOGETHER
TO PRODUCE A BETTER OUTCOME
source: www.strategyzer.com

139. 6 QUESTIONS
HOW DO YOU PERFORM ON A SCALE FROM 0 TO 10?
0 102 4 6 8
source: www.strategyzer.com

140. SWITCHING
COSTS
1

141. MECHANICS:
SWITCHING COSTS
HOW EASY OR HARD IS IT FOR YOUR
CUSTOMER TO SWITCH TO ANOTHER
COMPANY?
source: www.strategyzer.com

142. EXAMPLE
IPOD

143. What are the most important costs inherent in our business model?
Which Key Resources are most expensive?
Which Key Activities are most expensive?
Through which Channels do our Customer Segments
want to be reached?
How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?
For what value are our customers really willing to pay?
For what do they currently pay?
How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?
For whom are we creating value?
Who are our most important customers?
What type of relationship does each of our Customer
Segments expect us to establish and maintain with them?
Which ones have we established?
How are they integrated with the rest of our business model?
How costly are they?
What value do we deliver to the customer?
Which one of our customer’s problems are we helping to solve?
What bundles of products and services are we offering to each Customer Segment?
Which customer needs are we satisfying?
What Key Activities do our Value Propositions require?
Our Distribution Channels?
Customer Relationships?
Revenue streams?
Who are our Key Partners?
Who are our key suppliers?
Which Key Resources are we acquiring from partners?
Which Key Activities do partners perform?
What Key Resources do our Value Propositions require?
Our Distribution Channels? Customer Relationships?
Revenue Streams?
Day Month Year
No.
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
Retail
Switching
costs
Recurring
transactional
sales
Content
revenues
Mass Markets
Itunes
software
IPOD, 1000
songs in a
pocket
Hard &
software
innovation
Ipod (switching costs)
source: www.strategyzer.com

144. MECHANICS:
SWITCHING COSTS
HOW DO YOU PERFORM ON A SCALE FROM 0 TO 10?
0 102 4 6 8
source: www.strategyzer.com

145. RECURRING
REVENUES
2

146. MECHANICS:
RECURRING REVENUES
IS EVERY SALES A NEW EFFORT
(TRANSACTIONAL) OR WILL IT
RESULT IN FOLLOW-UP REVENUES
AND PURCHASES?
source: www.strategyzer.com

147. EXAMPLE
NESPRESSO

148. What are the most important costs inherent in our business model?
Which Key Resources are most expensive?
Which Key Activities are most expensive?
Through which Channels do our Customer Segments
want to be reached?
How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?
For what value are our customers really willing to pay?
For what do they currently pay?
How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?
For whom are we creating value?
Who are our most important customers?
What type of relationship does each of our Customer
Segments expect us to establish and maintain with them?
Which ones have we established?
How are they integrated with the rest of our business model?
How costly are they?
What value do we deliver to the customer?
Which one of our customer’s problems are we helping to solve?
What bundles of products and services are we offering to each Customer Segment?
Which customer needs are we satisfying?
What Key Activities do our Value Propositions require?
Our Distribution Channels?
Customer Relationships?
Revenue streams?
Who are our Key Partners?
Who are our key suppliers?
Which Key Resources are we acquiring from partners?
Which Key Activities do partners perform?
What Key Resources do our Value Propositions require?
Our Distribution Channels? Customer Relationships?
Revenue Streams?
Day Month Year
No.
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
Households
Retail
Repetitive
Pad Sales
Direct sales
Nespresso
Machines
Nespresso
Pads
Patents
Nespresso (recurring)
source: www.strategyzer.com

149. MECHANICS:
RECURRING REVENUES
HOW DO YOU PERFORM ON A SCALE FROM 0 TO 10?
0 102 4 6 8
source: www.strategyzer.com

150. EARN BEFORE
YOU SPEND
3

151. MECHANICS:
EARN BEFORE YOU SPEND
ARE YOU EARNING MONEY BEFORE
YOU ARE SPENDING IT (E.G. FOR
PRODUCTION, PLATFORMS ETC.)?
source: www.strategyzer.com

152. EXAMPLE
BMGEN

153. source: www.strategyzer.com

154. MECHANICS:
EARN BEFORE YOU SPEND
HOW DO YOU PERFORM ON A SCALE FROM 0 TO 10?
0 102 4 6 8

155. GAME CHANGING
COST
STRUCTURE
4

156. MECHANICS:
GAME CHANGING COST
STRUCTURE
IS YOUR COST STRUCTURE
SUBSTANTIALLY DIFFERENT AND
BETTER THAN THAT OF
COMPETITORS?
source: www.strategyzer.com

157. EXAMPLE
SKYPE

159. MECHANICS:
GAME CHANGING COST
STRUCTURE
HOW DO YOU PERFORM ON A SCALE FROM 0 TO 10?
0 102 4 6 8
source: www.strategyzer.com

160. GETTING
OTHERS
TO DO
THE WORK
5

161. MECHANICS:
GETTING OTHERS TO DO THE
WORK
HOW MUCH DOES YOUR BUSINESS
MODEL GET CUSTOMERS OR THIRD
PARTIES TO CREATE VALUE FOR YOU?
source: www.strategyzer.com

162. EXAMPLE
FACEBOOK

165. MECHANICS:
GETTING OTHERS TO DO THE
WORK
HOW DO YOU PERFORM ON A SCALE FROM 0 TO 10?
0 102 4 6 8
source: www.strategyzer.com

166. SCALABILITY
6

167. MECHANICS:
SCALABILITY
HOW RAPIDLY AND HOW EASILY CAN
YOU GROW YOUR BUSINESS MODEL
WITHOUT HITTING ROADBLOCKS (E.G.
INFRASTRUCTURE, CUSTOMER
SUPPORT ETC.)
source: www.strategyzer.com

168. EXAMPLE
DINERS CLUB

169. source: www.strategyzer.com

170. What are the most important costs inherent in our business model?
Which Key Resources are most expensive?
Which Key Activities are most expensive?
Through which Channels do our Customer Segments
want to be reached?
How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?
For what value are our customers really willing to pay?
For what do they currently pay?
How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?
For whom are we creating value?
Who are our most important customers?
What type of relationship does each of our Customer
Segments expect us to establish and maintain with them?
Which ones have we established?
How are they integrated with the rest of our business model?
How costly are they?
What value do we deliver to the customer?
Which one of our customer’s problems are we helping to solve?
What bundles of products and services are we offering to each Customer Segment?
Which customer needs are we satisfying?
What Key Activities do our Value Propositions require?
Our Distribution Channels?
Customer Relationships?
Revenue streams?
Who are our Key Partners?
Who are our key suppliers?
Which Key Resources are we acquiring from partners?
Which Key Activities do partners perform?
What Key Resources do our Value Propositions require?
Our Distribution Channels? Customer Relationships?
Revenue Streams?
Day Month Year
No.
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
Salesmen
7%
transaction
costs
3 USD annual
fee
Restaurants
(14 initially in
NY)
Credit in
several
restaurants
Access to
clients and
loyalty
Restaurants
that accept
creditcards
Diners club (scalability)
source: www.strategyzer.com

171. MECHANICS:
SCALABILITY
HOW DO YOU PERFORM ON A SCALE FROM 0 TO 10?
0 102 4 6 8
source: www.strategyzer.com

172. WHAT IS YOUR
SCORE?

173. WHAT ARE THE
MECHANICS YOU
WANT TO WORK ON?

174. LEARNINGS

175. YOU CAN ASSESS
AND IMPROVE YOUR
BUSINESS MODEL BY
ASKING 6 QUESTIONS
source: www.strategyzer.com

176. A GREAT BUSINESS
MODEL ALONE IS NOT
ENOUGH - YOU NEED
MARKET TRACTION
source: www.strategyzer.com

177. BY IMPROVING YOUR
BUSINESS MODEL
MECHANICS YOU ARE
LIKELY TO
OUTCOMPETE OTHERS
source: www.strategyzer.com

178. SO WE NEED NEW
TOOLS…

179. AND WE NEED NEW
SKILLS…

180. WE NEED NEW
MINDSETS…

181. WE NEED THINK AND
ACT LIKE
DESIGNERS

182. OBSERVE
1

183. Clayton Christensen

184. WHEREVER YOU LOOK
THAT’S WHAT YOU SEE.
JERRY SEINFELD

186. THINK
VISUALLY
2

187. DRAWING IS THE
NEW WRITING

188. EYES, PENCILS AND THE HAND
MAY BE TOOLS OF THE PAST,
…I BELIEVE THEY ARE TOOLS
OF THE FUTURE.
John Maeda, RISD

190. DESIGNING BETTER BUSINESSES

191. “The Wall is the New Desk”
Dave Gray CEO XPLANE
1!

192. … but that is not enough

194. IDEATE
3

195. DESIGNING BETTER BUSINESSES

196. VALUE
PROPOSITION
CHANNELS
CUSTOMER
RELATIONSHIPS
CUSTOMER
SEGMENTS
REVENUE STREAMS
COST STRUCTURE
KEY
ACTIVITIES
KEY
PARTNERS
KEY
RESOURCES
CURRENT BUSINESS MODEL

197. VALUE
PROPOSITION
CHANNELS
CUSTOMER
RELATIONSHIPS
CUSTOMER
SEGMENTS
REVENUE STREAMS
COST STRUCTURE
KEY
ACTIVITIES
KEY
PARTNERS
KEY
RESOURCES
CURRENT BUSINESS MODEL

198. VALUE
PROPOSITION
CHANNELS
CUSTOMER
RELATIONSHIPS
CUSTOMER
SEGMENTS
REVENUE STREAMS
COST STRUCTURE
KEY
ACTIVITIES
KEY
PARTNERS
KEY
RESOURCES
CURRENT BUSINESS MODEL

199. VALUE
PROPOSITION
CHANNELS
CUSTOMER
RELATIONSHIPS
CUSTOMER
SEGMENTS
REVENUE STREAMS
COST STRUCTURE
KEY
ACTIVITIES
KEY
PARTNERS
KEY
RESOURCES
CURRENT BUSINESS MODEL

201. YOU NEED TO BE
ABLE TO JUGGLE
WITH BUSINESS
MODELS

202. PROTOTYPE
4

203. the past was about
choosing solutions
the future is about
generating options

204. Frank Gehry

208. 8 PROTOTYPES

209. MAKERS
MIND
5

211. Chris Anderson

212. FORESEE
FUTURE
6

214. THERE IS ONLY ONE
WAY TO LIVE IN A
WORLD OF SPEED,
SURPRISE, NOISE AND
RESPONSIVENESS
Grant McCracken

215. THAT IS TO VISIT
THE FUTURE
FREQUENTLY
Grant McCracken

217. ALLOW FOR MANY
POSSIBLE, PLAUSIBLE
FUTURES

220. THE BEST WAY TO
PREDICT THE
FUTURE IS TO
CREATE IT
PETER DRUCKER

221. WE BELIEVE THESE
ARE THE
LEADERSHIP SKILLS
OF THE FUTURE

222. THIS IS HOW
WE DO IT.

223. Method for Business Model Innovation

224. WITH FIXED PRICES

225. AND OUR RULES OF
THE GAME

227. DESIGNING
STRATEGIC
CONVERSATIONS
THAT MATTER

228. VISUALIZATION
ONLY

229. Future scenario

230. Business model

231. Story or roadmap

232. OUR JOURNEY…

233. Tallinn (EST)
Hawaii (USA) Amsterdam (NET)
Bilbao (ESP) Tokyo (JAP)
Santiago (CHI)
Zagreb (CRO) Paris (FRA) Los Angeles (USA)

234. OUR CLIENTS…

236. AND A NEW
BUSINESS MODEL
FOR CONSULTING

237. CHECK THESE
SOURCES

238. Online learning

239. Business Model Software

240. Our agency

241. Thank God it’s
Friday!
(5 PM)
Lisa@businessmodelsinc.com
Patrick@businessmodelsinc.com

242. DESIGNING BETTER BUSINESSES