The Rich 3-Act Business Model STORYBOARD: Rapid Business Model Prototyping, Strategy, Validation, and Execution
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Despite the recent proliferation in business model representation, business model visualization is relatively poor and still fraught with many problems. I’ve observed 10 Business Model Problems, each problem of which has been solved by the “3-Act Business Model Network,” a simple and information-rich platform for visualizing, organizing, integrating, discussing, innovating on, testing, evaluating, benchmarking, and managing business models as well as stories. In brief, the 3-Act Business Model Network provides an all-in-one platform for facilitating not only business model prototyping, strategy, validation, and execution but also story prototyping, testing, and management. Using the “rich” 3-Act Business Model Network, you could achieve great savings in time, cost, and energy while holistically prototyping and managing business models as well as inspirational stories of change. To facilitate use of the 3-Act Business Model Network, the tool is applied to the business model of Apple’s iPod; see http://goo.gl/zdZ05f Below is a list of 10 problems that plague other representations of a business model. #1: TOWER-OF-BABEL Problem #2: BUILDING BLOCK OVERLOAD Problem #3: INCOHERENT BUSINESS-MODEL-LOGIC Problem #4: REVERSE-INCOME-STATEMENT Problem #5: ASSUMPTION-FORMULATION-AND-TESTING Problem #6: PERFORMANCE-MANAGEMENT Problem #7: EXTERNAL BUSINESS MODEL INTEGRATION Problem #8: HOLISTIC BUSINESS MODEL Problem #9: UNILEVEL BUSINESS MODEL Problem #10: SHARED-VALUE Problem
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The Rich 3-Act Business Model STORYBOARD: Rapid Business Model Prototyping, Strategy, Validation, and Execution
- 1. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing Innovator Marketer Accountant 3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
- 2. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing Innovator Marketer Accountant 3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on JOB TO GET DONE Sa*sfy Demand Create Demand Generate Profit
- 3. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing Innovator Marketer Accountant 3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on JOB TO GET DONE Sa*sfy Demand Create Demand Generate Profit
- 4. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing Innovator Marketer Accountant delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
- 5. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing Innovator (Product) Marketer (Customer) Accountant (Profit) delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
- 6. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
- 7. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on Product/Value ProposiUon q iPod Hardware q “A Thousand Songs in Your Pocket” Channels & RelaUonships q www.apple.com q Apple Retail Stores q iTunes Store q Big Box Retailers Customer/Job-‐To-‐Get-‐Done q Luxury SpoDer q “Blue Ocean” XP q Listen to Music Everywhere q Bulky players; small storage Inputs/Partners q Original Equipment Manu. q Record Companies Internal Resources q Staff/Employees q Brand/Culture q IP Processes/AcUviUes q Luxury Spot Strategy q Hardware Design q SoPware Design q MarkeQng & Sales Revenue (Delight): High Items (Sources/Streams) q iPod Hardware q iTunes Store q Commissions PROFIT (VALUE): High q High Profit Margin q Extraordinary Profit q Luxury Spot Strategy Ent. Industry: Music (Share) Cost (Pain): High Items (Structure) q Staff/Employees q Manufacturing q MarkeQng & Sales
- 8. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on Product/Value ProposiUon q iPod Hardware q “A Thousand Songs in Your Pocket” Channels & RelaUonships q www.apple.com q Apple Retail Stores q iTunes Store q Big Box Retailers Customer/Job-‐To-‐Get-‐Done q Luxury SpoDer q “Blue Ocean” XP q Listen to Music Everywhere q Bulky players; small storage Inputs/Partners q Original Equipment Manu. q Record Companies Internal Resources q Staff/Employees q Brand/Culture q IP Processes/AcUviUes q Luxury Spot Strategy q Hardware Design q SoPware Design q MarkeQng & Sales Cost (Pain): High Items (Structure) q Staff/Employees q Manufacturing q MarkeQng & Sales Revenue (Delight): High Items (Sources/Streams) q iPod Hardware q iTunes Store q Commissions PROFIT (VALUE): High q High Profit Margin q Extraordinary Profit q Luxury Spot Strategy Ent. Industry: Music (Share)
- 9. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on Product/Value ProposiUon q iPod Hardware q “A Thousand Songs in Your Pocket” Channels & RelaUonships q www.apple.com q Apple Retail Stores q iTunes Store q Big Box Retailers Customer/Job-‐To-‐Get-‐Done q Luxury SpoDer q “Blue Ocean” XP q Listen to Music Everywhere q Bulky players; small storage Inputs/Partners q Original Equipment Manu. q Record Companies Internal Resources q Staff/Employees q Brand/Culture q IP Processes/AcUviUes q Luxury Spot Strategy q Hardware Design q SoPware Design q MarkeQng & Sales Cost (Pain): High Items (Structure) q Staff/Employees q Manufacturing q MarkeQng & Sales Revenue (Delight): High Items (Sources/Streams) q iPod Hardware q iTunes Store q Commissions PROFIT (VALUE): High q High Profit Margin q Extraordinary Profit q Luxury Spot Strategy Ent. Industry: Music (Share) (Problem-‐SoluQon Fit; Product-‐Market Fit)
- 10. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on Product/Value ProposiUon q iPod Hardware q “A Thousand Songs in Your Pocket” Channels & RelaUonships q www.apple.com q Apple Retail Stores q iTunes Store q Big Box Retailers Customer/Job-‐To-‐Get-‐Done q Luxury SpoDer q “Blue Ocean” XP q Listen to Music Everywhere q Bulky players; small storage require(s) delight(s) require(s) delight(s) Inputs/Partners q Original Equipment Manu. q Record Companies Internal Resources q Staff/Employees q Brand/Culture q IP require(s) affect(s) require(s) deliver(s) drive(s) requires delights Processes/AcUviUes q Luxury Spot Strategy q Hardware Design q SoPware Design q MarkeQng & Sales Revenue (Delight): High Items (Sources/Streams) q iPod Hardware q iTunes Store q Commissions PROFIT (VALUE): High q High Profit Margin q Extraordinary Profit q Luxury Spot Strategy Ent. Industry: Music (Share) Cost (Pain): High Items (Structure) q Staff/Employees q Manufacturing q MarkeQng & Sales
- 11. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on Product/Value ProposiUon q iPod Hardware q “A Thousand Songs in Your Pocket” Channels & RelaUonships q www.apple.com q Apple Retail Stores q iTunes Store q Big Box Retailers Customer/Job-‐To-‐Get-‐Done q Luxury SpoDer q “Blue Ocean” XP q Listen to Music Everywhere q Bulky players; small storage require(s) require(s) Inputs/Partners q Original Equipment Manu. q Record Companies Internal Resources q Staff/Employees q Brand/Culture q IP require(s) affect(s) require(s) deliver(s) drive(s) requires delights Processes/AcUviUes q Luxury Spot Strategy q Hardware Design q SoPware Design q MarkeQng & Sales Revenue (Delight): High Items (Sources/Streams) q iPod Hardware q iTunes Store q Commissions PROFIT (VALUE): High q High Profit Margin q Extraordinary Profit q Luxury Spot Strategy Ent. Industry: Music (Share) Cost (Pain): High Items (Structure) q Staff/Employees q Manufacturing q MarkeQng & Sales delight(s) delight(s)
- 12. “[A] business model makes it possible for you to gain a comprehensive and realisQc understanding of how to make money.” Larry Bossidy and Ram Charan in the book, “ConfronQng Reality” Why Use “Business Model” As Unit of Analysis?
- 13. Law of the 3-‐Act Business Model Although Stories, Businesses, Business Models, Living Systems, and Other OrganizaUons Appear Different on the Surface, Every Story, Enterprise, Business Model, Living System, or OrganizaQon on the Planet Has the Same Fractal “DNA” Structure Which Consists of a Network of 3 “Acts” or Sub-‐models: v Value CreaUon Act: System v Value ProposiUon Act: Environment (Local/Global) v Value Sharing (Profit) Act: Impact or Trade-‐off (Pain; Delight) #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
- 14. ENVIRONMENT (Local/Global) Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling IMPACT or TRADE-‐OFF (-‐/+) #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing SYSTEM (Object/Tool/Business Model)
- 15. ENVIRONMENT (Local/Global) Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling IMPACT or TRADE-‐OFF (-‐/+) #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing 3-‐ACT BUSINESS MODEL
- 16. ENVIRONMENT (Local/Global) IMPACT or TRADE-‐OFF (-‐/+) #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling
- 17. ENVIRONMENT (Local/Global) IMPACT or TRADE-‐OFF (-‐/+) #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling Innovator’s PerspecQve Marketer’s PerspecQve Investor’s PerspecQve
- 18. ENVIRONMENT (Local/Global) IMPACT or TRADE-‐OFF (-‐/+) #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL FITNESS? FITNESS? Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling Innovator’s PerspecQve Marketer’s PerspecQve Investor’s PerspecQve FITNESS? Product Customer Profit
- 19. ENVIRONMENT (Local/Global) IMPACT or TRADE-‐OFF (-‐/+) #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL: How? VALUE PROPOSITION MODEL: What? VALUE SHARING (PROFIT) MODEL: Why? Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling
- 20. IMPACT or TRADE-‐OFF (-‐/+) #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL: How? VALUE PROPOSITION MODEL: What? VALUE SHARING (PROFIT) MODEL: Why? Bargaining Power of Suppliers Bargaining Power of Customers Threat of New Entrants Threat of SubsUtute Products or Services Porter’s 5 Forces for Industry Profitability & Fitness Analysis Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling
- 21. IMPACT or TRADE-‐OFF (-‐/+) #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL: How? VALUE PROPOSITION MODEL: What? VALUE SHARING (PROFIT) MODEL: Why? 4 Global Environment Forces for External Fitness Analysis Industry Ecosystem (IE): Supply Market Ecosystem (ME): Demand Key Trends & Complementors (KTC): PESTLIED (-‐/+) Macro-‐Economic Influencers (MEI): Global Economy Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling
- 22. IMPACT or TRADE-‐OFF (-‐/+) #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL: How? VALUE PROPOSITION MODEL: What? VALUE SHARING (PROFIT) MODEL: Why? SWOT Analysis W: WEAKNESSES (-‐) S: STRENGTHS (+) O: OPPORTUNITIES (+) T: THREATS (-‐) Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling
- 23. IMPACT or TRADE-‐OFF (-‐/+) #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL: How? VALUE PROPOSITION MODEL: What? VALUE SHARING (PROFIT) MODEL: Why? “E.R.I.C.” Value InnovaDon TacDcs E: Eliminate I: Increase C: Create R: Reduce Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling
- 24. DisrupDon Spot Luxury Spot Strategic Choice Sweet Spot Profit Model/ Strategy/ Value Proposi*on Blue Ocean Profit Model/ Strategy/ Value Proposi*on Luxury Spot (“Differen*a*on”) Profit Model/ Strategy/ Value Proposi*on DisrupUon Spot/Lean (“Low Cost”) Profit Model/ Strategy/ Value Proposi*on 4 BUSINESS PROFIT MODELS, WINNING STRATEGIES, AND VALUE PROPOSITIONS Trade-‐off Map of Cost vs. Revenue (-‐): PAIN: Cost (Size; Complexity; Inaccessibility; Delay) (+): DELIGHT: Revenue (Performance; Quality; Brand; Customiza*on) Key Profitable Model Unprofitable Model #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & hDp://businessmodels.ning.com & hDp://twiDer.com/RodKuhnKing Market Segment (Job-‐To-‐Get-‐Done/Goal; Product/Tool): ………………..…..……..……. ………… ……………………………………………………………………….…………….………….………………. “Insane” Happiness (Value) Ideal Final Result (IFR) Infinite Shared Happiness “Invisible Hand”
- 25. DisrupDon Spot Luxury Spot Strategic Choice Sweet Spot Profit Model/ Strategy/ Value Proposi*on Blue Ocean Profit Model/ Strategy/ Value Proposi*on Luxury Spot (“Differen*a*on”) Profit Model/ Strategy/ Value Proposi*on DisrupUon Spot/Lean (“Low Cost”) Profit Model/ Strategy/ Value Proposi*on Apple iPod’s GENERIC PROFIT MODEL, WINNING STRATEGY, AND VALUE PROPOSITION Trade-‐off Map of Cost vs. Revenue (-‐): PAIN: Cost (Size; Complexity; Inaccessibility; Delay) (+): DELIGHT: Revenue (Performance; Quality; Brand; Customiza*on) Key Profitable Model Unprofitable Model #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & hDp://businessmodels.ning.com & hDp://twiDer.com/RodKuhnKing Market Segment (Job-‐To-‐Get-‐Done/Goal; Product/Tool): Entertainment Industry (Music): Listen to music “Insane” Happiness (Value) Ideal Final Result (IFR) Infinite Shared Happiness “Invisible Hand”
- 26. DisrupDon Spot Luxury Spot Strategic Choice Sweet Spot Customer Experience Blue Ocean Customer Experience Luxury Spot Customer Experience DisrupUon Spot/Lean Customer Experience CUSTOMER EXPERIENCE, VALUE PROPOSITION, JOB-‐TO-‐GET-‐DONE, AND (VALUE) FACTORS Trade-‐off Map of Customer Pain vs. Customer Delight (-‐): PAIN: Cost; Size; Complexity; Inaccessibility; Delay (+): DELIGHT: Func*onality; Performance; Quality; Brand; Customiza*on Key Valuable Experience Non-‐valuable Experience #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & hDp://businessmodels.ning.com & hDp://twiDer.com/RodKuhnKing Market Segment (Job-‐To-‐Get-‐Done/Goal; Product/Tool): Entertainment Industry (Music): Listen to music “Insane” Happiness (Value) Ideal Final Result (IFR) Infinite Shared Happiness “Invisible Hand”
- 27. DisrupDon Spot Luxury Spot Strategic Choice Sweet Spot Customer Experience Blue Ocean Customer Experience Luxury Spot Customer Experience DisrupUon Spot/Lean Customer Experience CUSTOMER EXPERIENCE, VALUE PROPOSITION, AND JOB-‐TO-‐GET-‐DONE for Apple’s iPod Trade-‐off Map of Customer Pain vs. Customer Delight (-‐): PAIN: Size; Complexity (+): DELIGHT: Func*onality; Performance (Storage); Quality; Brand; Customiza*on Key Valuable Experience Non-‐valuable Experience #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & hDp://businessmodels.ning.com & hDp://twiDer.com/RodKuhnKing Market Segment (Job-‐To-‐Get-‐Done/Goal; Product/Tool): Entertainment Industry (Music): Listen to music “Insane” Happiness (Value) Ideal Final Result (IFR) Infinite Shared Happiness “Invisible Hand”
- 28. “Businesses will increasingly find themselves dealing with external forces they didn’t foresee. To seize opportuniQes or defend themselves, they’ll have to change faster and more oPen. But what should a business change? How much should it change, how soon and how fast?” Larry Bossidy and Ram Charan in the book, “ConfronQng Reality” What to Change?
- 29. More … q HOLISTIC BUSINESS-‐MODEL Problem q UNILEVEL BUSINESS-‐MODEL Problem q SHARED VALUE Problem INCOHERENT BUSINESS-‐MODEL-‐LOGIC Problem Logical relaQonships of how a business makes money are either incoherent or not shown in nearly all representaQons of a business model. ExisQng business model diagrams are staQc. ASSUMPTION-‐FORMULATION-‐AND-‐ TESTING Problem The process of formulaQng and tesQng assumpQons (hypotheses/proposal/ plans) of a business model is currently unsystemaQc and whimsical. EXTERNAL BUSINESS-‐MODEL-‐ INTEGRATION Problem ExisQng business model representa-‐ Qons do not easily integrate with the large body of knowledge in Strategic Management, Startups, Product InnovaQon, and Project Planning. BUILDING-‐BLOCK-‐OVERLOAD Problem It is brain-‐unfriendly to present 9 or more building blocks at a single level. Many people feel overwhelmed and cannot remember to reproduce the building blocks of a business model. 10 BUSINESS MODEL PROBLEMS THAT YOU CAN IMMEDIATELY ELIMINATE Use 3-‐Act Business Model Storyboard to Solve the Following Problems … PERFORMANCE MANAGEMENT Problem Nearly all business model diagrams are not directly integrated with the tool of the Balanced Scorecard. Business model diagrams are hardly used for managing business model performance. TOWER-‐OF-‐BABEL Problem Too many “unique” frameworks and languages for business model visualizaQon. The frameworks are oPen contradictory and don’t speak to each other. REVERSE-‐INCOME-‐STATEMENT Problem Most diagrams of business models do not explicitly contain “Profit” as a building block. This makes it difficult to focus on designing for profit as well as preparing a Reverse Income Statement. 10 BUSINESS MODEL PROBLEMS THAT YOU CAN IMMEDIATELY ELIMINATE An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
- 30. “A Business Model Prototype Is A Thousand Times More Cost-‐Effec*ve Than A Business Plan” Business Model Prototype vs. Business Plan
- 31. Appendix MulUlevel VisualizaUon of The 3-‐Act Business Model Storyboard q Bird’s Eye View (Macro-‐Logic of Business Model) q Eagle Eye’s View (Meso-‐Logic of Business Model) q Worm’s Eye View (Micro-‐Logic of Business Model)
- 32. ENVIRONMENT (Local/Global) IMPACT or TRADE-‐OFF (-‐/+) #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL FITNESS? FITNESS? FITNESS? 3-‐ACT BUSINESS MODEL STORYBOARD Innovator’s PerspecQve Marketer’s PerspecQve Investor’s PerspecQve
- 33. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL 3-‐ACT BUSINESS MODEL STORYBOARD Bird’s Eye View (Business Model Chain: Macro-‐Logic) VALUE SHARING (PROFIT) MODEL delivers requires drives requires
- 34. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Business Model Tree – Hierarchical Decomposi*on of Macro-‐Logic) Product/Value ProposiUon Channels & RelaUonships Customer/Job-‐To-‐Get-‐Done Inputs/Partners Internal Resources Processes/AcUviUes Cost (Pain) Revenue (Delight) PROFIT (VALUE)
- 35. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network: Meso-‐Logic) Product/Value ProposiUon Channels & RelaUonships Customer/Job-‐To-‐Get-‐Done Inputs/Partners Internal Resources Processes/AcUviUes Cost (Pain) Revenue (Delight) PROFIT (VALUE)
- 36. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network: Meso-‐Logic) Product/Value ProposiUon Channels & RelaUonships Customer/Job-‐To-‐Get-‐Done Inputs/Partners Internal Resources Processes/AcUviUes Cost (Pain) Revenue (Delight) PROFIT (VALUE) (Problem-‐SoluQon Fit; Product-‐Market Fit)
- 37. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network: Meso-‐Logic) Product/Value ProposiUon Channels & RelaUonships Customer/Job-‐To-‐Get-‐Done require(s) require(s) Inputs/Partners Internal Resources Processes/AcUviUes require(s) affect(s) require(s) deliver(s) Cost (Pain) Revenue (Delight) PROFIT (VALUE) requires drive(s) delights delight(s) delight(s)
- 38. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network: Meso-‐Logic) Product/Value ProposiUon Channels & RelaUonships Customer/Job-‐To-‐Get-‐Done require(s) require(s) Inputs/Partners Internal Resources Processes/AcUviUes require(s) affect(s) require(s) deliver(s) Cost (Pain) Revenue (Delight) PROFIT (VALUE) requires drive(s) delights delight(s) delight(s)
- 39. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network – Elements and Profit Logic of the MarkeDng Mix: 4Ps of MarkeDng) Product/Value ProposiUon q Product Channels & RelaUonships q Place q PromoUon Customer/Job-‐To-‐Get-‐Done require(s) require(s) Inputs/Partners Internal Resources Processes/AcUviUes require(s) affect(s) require(s) deliver(s) Cost (Pain) Revenue (Delight) q Pricing PROFIT (VALUE) requires drive(s) delights delight(s) delight(s)
- 40. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network – Elements and Profit Logic of Kaplan & Norton’s Balanced Scorecard) Product/Value ProposiUon Channels & RelaUonships Customer/Job-‐To-‐Get-‐Done q Customer PerspecQve require(s) require(s) Inputs/Partners Internal Resources q Learning and Growth PerspecQve Processes/AcUviUes q Process PerspecQve require(s) affect(s) require(s) deliver(s) Cost (Pain) Revenue (Delight) PROFIT (VALUE) q Financial PerspecQve requires drive(s) delights delight(s) delight(s)
- 41. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network – Elements and Profit Logic of Michael Porter’s Value Chain) Product/Value ProposiUon Channels & RelaUonships q Outbound LogisDcs q MarkeDng & Sales q Service Customer/Job-‐To-‐Get-‐Done require(s) require(s) Inputs/Partners q Inbound LogisDcs Internal Resources q Firm Infrastructure q Human Resource Mngt q Technology Development q Procurement Processes/AcUviUes q OperaDons require(s) affect(s) require(s) deliver(s) Cost (Pain) Revenue (Delight) PROFIT (VALUE) q Profit Margin requires drive(s) delights delight(s) delight(s)
- 42. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Business Model Network – Elements and Shared Value Logic of Rod King’s “S.E.M.P.O.R.C.E.S.” Chain) Product/Value ProposiUon q Output/Product (O) Channels & RelaUonships q Retailers/Distributors/ Channels (R) Customer/Job-‐To-‐Get-‐Done q Customers/Consumers (C) require(s) require(s) Inputs/Partners q Suppliers/Inputs (S) Internal Resources q Employees (E) q Machinery/Equipment (M) Processes/AcUviUes q Process (P) require(s) affect(s) require(s) deliver(s) Cost (Pain) Revenue (Delight) PROFIT (VALUE) q Shared Value (S) requires drive(s) delights delight(s) delight(s)
- 43. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network – Elements and Profit Logic of Osterwalder & Pigneur’s Business Model Canvas) Product/Value ProposiUon q Value ProposiUon (VP) Channels & RelaUonships q Channels (CH) q Customer RelaUonships (CR) Customer/Job-‐To-‐Get-‐Done q Customer Segment (CS) require(s) require(s) Inputs/Partners q Key Partners (KP) Internal Resources q Key Resources (KR) Processes/AcUviUes q Key AcUviUes (KA) require(s) affect(s) require(s) deliver(s) Cost (Pain) q Cost Structure (C$) Revenue (Delight) q Revenue Streams (R$) PROFIT (VALUE) requires drive(s) delights delight(s) delight(s)
- 44. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network – Elements and Profit Logic of Ash Maurya’s Lean Canvas) Product/Value ProposiUon q Unique Value ProposiUon q SoluUon Channels & RelaUonships q Channels Customer/Job-‐To-‐Get-‐Done q Customer Segment q Problem (Trade-‐off) require(s) require(s) Inputs/Partners Internal Resources q Unfair Advantage Processes/AcUviUes require(s) affect(s) require(s) deliver(s) Cost (Pain) q Cost Structure Revenue (Delight) q Revenue Streams PROFIT (VALUE) q Key Metrics requires drive(s) delights delight(s) delight(s) (Problem-‐SoluQon Fit; Product-‐Market Fit)
- 45. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network – Elements and Profit Logic of Mark Johnson’s 4-‐Box Business Model) Product/Value ProposiUon q Customer Value ProposiUon Channels & RelaUonships Customer/Job-‐To-‐Get-‐Done require(s) require(s) Inputs/Partners Internal Resources q Key Resources Processes/AcUviUes q Key Processes require(s) affect(s) require(s) deliver(s) Cost (Pain) Revenue (Delight) PROFIT (VALUE) q Profit Formula requires drive(s) delights delight(s) delight(s)
- 46. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network – Elements and Profit Logic of Bossidy & Charan’s Business Model) Product/Value ProposiUon Channels & RelaUonships Customer/Job-‐To-‐Get-‐Done q Customer Base (Needs) require(s) require(s) Inputs/Partners Internal Resources q People: Team q OrganizaUon Processes/AcUviUes q Strategy q OperaUons q IteraQon;Root-‐cause analysis q Environment Scan: SWOT require(s) affect(s) require(s) deliver(s) Cost (Pain) q Capital Intensity Revenue (Delight) q Revenue Growth PROFIT (VALUE) q OperaUng Margin q Cash Flow q Return on Investment q (Financial History: Fit) requires drive(s) delights delight(s) delight(s)
- 47. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires 3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network – Elements and Profit Logic of Malik’s Enterprise Architecture Model) Product/Value ProposiUon q Value ProposiUon q Products & Services Channels & RelaUonships q Channels q Customer Demands & RelaUonships Customer/Job-‐To-‐Get-‐Done q Customer Type q Customer require(s) require(s) Inputs/Partners q Partner Type q Business Partner Internal Resources q Required Competency q Resource/Asset Processes/AcUviUes require(s) affect(s) require(s) deliver(s) Cost (Pain) q Cost Model Revenue (Delight) q Revenue Model PROFIT (VALUE) q Profit Model requires drive(s) delights delight(s) delight(s)
- 48. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL delivers requires drives requires Product/Value ProposiUon (P/VP) Channels & RelaUonships (CH/CR) Customer/Job-‐To-‐Get-‐Done (CS/JTGD) require(s) require(s) Inputs/Partners (I/KP) Internal Resources (IKR) Processes/AcUviUes (P/KA) require(s) affect(s) require(s) deliver(s) Cost (Pain) (C$) Revenue (Delight) (R$) PROFIT (VALUE) (P$) drive(s) requires 3-‐ACT BUSINESS MODEL MODEL STORYBOARD An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on delights delight(s) delight(s)
- 49. 3-‐ACT BUSINESS MODEL VALUE CREATION MODEL VALUE PROPOSITION MODEL VALUE SHARING (PROFIT) MODEL I/KP IKR P/KA P/VP CH/CR CS/CJTGD C$ R$ P$ I/KP -‐ IKR -‐ P/KA -‐ P/VP -‐ CH/CR -‐ CS/JTGD -‐ C$ -‐ R$ -‐ P$ -‐ #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing From -‐> To I/KP: Inputs/Partners IKR: Internal Resources P/KA: Processes/AcQviQes P/VP: Product/Value ProposiQon CHCR: Channels & RelaQonships CS/JTGD: Customer/Job-‐To-‐Get-‐Done C$: Cost (Structure) R$: Revenue (Streams) P$: Profit Key 3-‐ACT BUSINESS MODEL STORYBOARD Worm’s Eye View (Business Model Network of Rela*onships: Micro-‐Logic of Input-‐Output Matrix/“Concept Map”)
- 50. #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing VALUE CREATION MODEL: COST REDUCTION VALUE PROPOSITION MODEL: REVENUE INCREASE Inputs/Partners q Co-‐creaQon; Social Media q Open Source CollaboraQon q Crowd-‐funding/sourcing q FracQonalizaQon/Co-‐owner q Investor/Sponsor/Donor q Mergers & AcquisiQons Internal Resources (Physical/Intellectual/Emo*onal/ Spiritual Resources) q Creator; Broker; Landlord q Peer-‐to-‐Peer Plaoorm q Facilitated Network q Patents (“Fences”; Barriers) Processes/AcUviUes q OperaQonal Excellence; JIT q AutomaQon (Self-‐service/DIY) q GamificaQon; DigitalizaQon q Ecosystem Management q Problem Solving; ConsulQng q CompeQQve Strategies Product/Value ProposiUon q Asset Sale/Direct Sale q Product Leadership/Extension q Used/2nd Hand Product; Bargain q CustomizaQon (Value Factors) q Bundling/Unbundling q Product/SoPware as a Service Channels & RelaUonships q Offline/Online; (In)direct Sale q Franchise; Licensing; Affiliates q Distributor; Disintermediator q Ad Network; Brand MulQplier q AggregaQon/DisaggregaQon q AucQon/Reverse AucQon Customer/Job-‐To-‐Get-‐Done q Customer InQmacy/Loyalty q B2B; B2C q Long Tail; Community (Hub) q Two-‐sided Market (Segments) q MulQ-‐sided Market (Plaoorm) q Luxury/Mass Market/Niche Cost (Pain) q Outsourcing; SpecializaQon q Group Deals q Lending/RenQng/Leasing q Cross-‐subsidizaQon q FracQonalizaQon/Co-‐owner Revenue (Delight) q Pre-‐payment; AmorQzaQon q Discount; Dynamic Pricing q Razor Blade (“Bait & Switch”) q Usage Fee; SubscripQon Fee q Tiered Payment; Freemium q DonaQon; Free PROFIT (VALUE) q Shared Value (Profit) q Transient CompeQQve Adv. q Sustainable CompeQQve Adv. q Red Ocean; Low Cost/Margin q Blue Ocean; Luxury Spot q DisrupQve InnovaQon Spot PROFIT MODEL: PROFIT INCREASE Business Profit Management (Pagerns/Tac*cs) 51 BUSINESS PROFIT PATTERNS (Business Profit Innova*on for Compe**ve Advantage)
- 51. BUSINESS DNA MAP: A Visual Framework for Unified Strategic Planning & Management ‘Jigsaw Puzzle’ of Business Modeling Ontology for Living Systems S E M P O R C E S Suppliers/ Inputs Employees/ Culture/ Brand/IP Machinery/ Technology/ Infra’ Processes/ Strategies Output: Product/ Service Retailers/ Distributors/ Channels Customers/ Consumers (Care/Support) Environ-‐ ment Shared Greatn./ Impact Partners (Suppliers/ Materials/ Info/Energy) Key Resources AcQviQes (Processes) Value ProposiQon (Jobs To Get Done) Customer RelaQonship Management Industry/ Gov. SHARED VALUE/ PROFIT (Pain: -‐ Delight: + CAPABILITIES: CORE COMPETENCIES LOCAL ENVIRONMENT (Demand) GLOBAL ENV. (Trends) ENTERPRISE (SYSTEM/Supply: Inside the Enterprise) Design Needs Aspiratns ECOSYSTEM (PLANET/ECONOMY/FOREST; SPECIES; INDUSTRY/SUPPLY CHAIN/VALUE CHAIN) GLOBAL COMPETI-‐ TIVE FORCES COMPE-‐ TITIVE ADVAN-‐ TAGE INPUT PROCESSING OUTPUT EXTERNAL ENVIRONMENT RESULT (Impacts/ Effects) BUSINESS SYSTEM (Cause) BUSINESS DNA MAP: Global 3-‐Act Business Model (G3BM) Storyboard D N A #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
- 52. Global 3-‐Act Business Model (G3BM) Storyboard: Fractal Hierarchy for Business Model Fitness Environment Business Model (3-‐Act) World (Global) NaUon (Economy/ Value Network) Industry Sector (Locality/Supply Chain) Region Suppliers Customers SubsQtutes (In/Direct Compe*tors) New Entrants (Poten*al Compe*tors) W: WEAKNESSES (-‐) S: STRENGTHS (+) O: OPPORTUNITIES (+) T: THREATS (-‐) #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
- 53. Environment Business Model (3-‐Act) World (Global) NaUon (Economy/ Value Network) Industry Sector (Locality/Supply Chain) Region Suppliers Customers SubsQtutes (In/Direct Compe*tors) New Entrants (Poten*al Compe*tors) Macro-‐Economic Forces (MEF): Global Economy Industry Ecosystem (IE): Supply Market Ecosystem (ME): Demand Key Trends & Complementors (KTC): PESTLIED #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing Global 3-‐Act Business Model (G3BM) Storyboard: Fractal Hierarchy for Business Model Fitness
- 54. Past Reality Business Model Present Reality Business Model Future Reality Business Model Global 3-‐Act Business Model (G3BM) Plan An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing Strategy Short/Medium/Long-‐term WHAT to change? TO WHAT to change? WHY change? HOW to change?
- 55. Past Reality (“As Was”) Business Model Present Reality (“As Is”) Business Model Future Reality (“To Be”) Business Model Bus. Model (3-‐Act) Bus. Model (3-‐Act) Bus. Model (3-‐Act) Industry Ecosystem Market Ecosystem Business Model (3-‐Act) Macro-‐Economic Influencers Key Trends & Complementors Mission/Vision/ Purpose/Ideals/ Ideal Final Result For Business Model #VPGen. Dr. Rod King. rodkuhnhking@gmail.com & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing Strategy Short/Medium/Long-‐term Global 3-‐Act Business Model (G3BM) Plan An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on