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Burn your
 Business Plan,
Leave the Stone
    Age Behind
how to design, test, and
 pivot business models

     @AlexOsterwalder
the tools we use in
entrepreneurship
are still pretty basic
“     no business plan
                                 survives the first
                                     contact with
                                       customers
                                                     ”

Steve Blank,
entrepreneur & thought leader
“   plans are
    worthless, but
    planning is
    everything
    Dwight D. Eisenhower,
    US President 1948 - 1953
                               ”
plan your search
for successful
business models
buzz	
  
group
?
discuss with your seat neighbor
 what a business model is and
   write down your definition
!
   we lack a clear language and
method to discuss, analyze, improve,
    and invent business models
?
  what usually happens in a
meeting where the “top agenda
 point” is the business model?
?
how do we get over blah blah blah
 to create outstanding business
  models that produce growth?
1         2           3
language   levels   experiments
1   language
“   Any problem can
    be made clearer
    with a picture
    Dan Roam,
    author
                ”
Business
Model
Canvas
building                                         building
                    block                                            block



                          building
                                                                                          building
                              block                building
building                                            block                                 block

 block


                                                              building
                                                               block

                      building
                       block
                                                                         building
                                                                         block




                                      build
                                             ing
              ng                                                               building
       buildi                         bloc
                                          k
        block                                                                    block
illustration
how much did the cost of coffee
consumed at home change for
Swiss households over the last
       couple of years?
600%
to
800%
more
Nespresso
changed the
   business
   model for
   espresso
RESULTS
one of the fastest-
growing businesses in
   the Nestlé group
average growth of
30% p.a. since 2000
over 3.5 billion CHF annual
revenue with 1 product line
       (3.8 bio USD)
buzz
group
?       ?


?                           ?
            ?

        ?           ?




    ?                   ?


                                38
B2C          marketin
                                      brand g
                         ution
                  distrib
                                                                    Nespresso
                                                                         club
                            production
                              & SCM                                                               household
                                                     Nespresso                                                 s
 machine                                             machines
          er
manufactur

                  patents             brand
                    brand               brand                     retail              mail
                                                     Nespresso                                        busine
                                                                                     order                     ss
                                                       pods
   coffee
                            distribution
  growers                                                                Nespresso
                             channels
                                                                           .com


                                   production
                   coffee                                         call            Nespresso
                                     facilites                   center             stores




                                                                   1 x machine           repeti
            ion         B2C
  product                               marketin
                                                                                               tive
                                                                         sales           pod sa
                    distribution           brand g                                             les




                                                                                                               39
2   levels
more
lessons
Nespresso almost failed in
1987 due to a nonperforming
      business model
ne
 machi                                          offices
      cturer   Nespresso
manufa
                system



                           joint venture with
                           manufacturer




                                                          43
!
the business model is often the
difference between success and
   failure for the same product
more
lessons
!
     we are moving from
  portfolios of products to
portfolios of business models
     (cf Apple, Amazon)
there are
 levels of
business
    model
  strategy
iPad stencil, actual scale, template by hortis, le studio. Feb. 2010. http://hortis.lestudio.ch




date:
          project:
          screen:
author:
3   experiments
designing and
prototyping b.models
Frank Gehry,
architect
[source: Sony Pictures]
[source: Sony Pictures]
[source: Wikimedia Commons]
?
what does that have to do
with business models and
     my organization?
prototyping is
“   the conversation
    you have with
    your ideas
    Tom Wujec,
    designer     ”
?
how can we boost
  prototyping?
Business Model Toolbox...
                      65
BusinessModelGeneration.com/toolbox
                     iPad stencil, actual scale, template by hortis, le studio. Feb. 2010. http://hortis.lestudio.ch




date:
          project:
          screen:
author:
Strategyzer.com / 50% off: “leanstartup_berlin”
testing and pivoting
     prototypes
a business model (prototype)
might look great on paper...


                  building
                   block

                                                               building
                     buildin                                    block
                             g blo
                      block
                                   ck
   building
    block                                building
                                          block
                                                                               build
                                                                                     in
                                                                               block g


                                                    building
                  building                           block
                   block

                                                                build
                                                                      in
                                                                block g
                                                                                          .. but after all
                                                                                          it is only a...
       building                buil
                                    d
        block                  blo ing
                                   ck

                                                                   buildin
                                                                           g
                                                                   block
... a set of hypotheses


        guess                guess
           guess
                    guess              guess
guess
                            guess
         guess                 guess

                guess
  g uess                        guess
!
there is no proof that even
 the best business model
  on paper will really work
SteveBlank.com/books.html
“   there are no facts in
    the building... so get
    the hell out and talk to
    customers
    Steve Blank,
    entrepreneur & author
                            ”
“   pivots are business
    model changes
    without crisis
    Steve Blank,
    entrepreneur & author
                            ”
THANK
  YOU!
         BusinessModelGeneration.com
AlexOsterwalder.com / @AlexOsterwalder
          BusinessModelAlchemist.com

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LSMup Berlin Talk by Alex Osterwalder

  • 1. Burn your Business Plan, Leave the Stone Age Behind how to design, test, and pivot business models @AlexOsterwalder
  • 2. the tools we use in entrepreneurship are still pretty basic
  • 3. no business plan survives the first contact with customers ” Steve Blank, entrepreneur & thought leader
  • 4. plans are worthless, but planning is everything Dwight D. Eisenhower, US President 1948 - 1953 ”
  • 5. plan your search for successful business models
  • 7. ? discuss with your seat neighbor what a business model is and write down your definition
  • 8.
  • 9. ! we lack a clear language and method to discuss, analyze, improve, and invent business models
  • 10. ? what usually happens in a meeting where the “top agenda point” is the business model?
  • 11.
  • 12.
  • 13.
  • 14.
  • 15.
  • 16.
  • 17. ? how do we get over blah blah blah to create outstanding business models that produce growth?
  • 18. 1 2 3 language levels experiments
  • 19. 1 language
  • 20.
  • 21.
  • 22. Any problem can be made clearer with a picture Dan Roam, author ”
  • 23.
  • 25.
  • 26. building building block block building building block building building block block block building block building block building block build ing ng building buildi bloc k block block
  • 28.
  • 29. how much did the cost of coffee consumed at home change for Swiss households over the last couple of years?
  • 31.
  • 32. Nespresso changed the business model for espresso
  • 34. one of the fastest- growing businesses in the Nestlé group
  • 35. average growth of 30% p.a. since 2000
  • 36. over 3.5 billion CHF annual revenue with 1 product line (3.8 bio USD)
  • 38. ? ? ? ? ? ? ? ? ? 38
  • 39. B2C marketin brand g ution distrib Nespresso club production & SCM household Nespresso s machine machines er manufactur patents brand brand brand retail mail Nespresso busine order ss pods coffee distribution growers Nespresso channels .com production coffee call Nespresso facilites center stores 1 x machine repeti ion B2C product marketin tive sales pod sa distribution brand g les 39
  • 40. 2 levels
  • 42. Nespresso almost failed in 1987 due to a nonperforming business model
  • 43. ne machi offices cturer Nespresso manufa system joint venture with manufacturer 43
  • 44. ! the business model is often the difference between success and failure for the same product
  • 46.
  • 47.
  • 48.
  • 49. ! we are moving from portfolios of products to portfolios of business models (cf Apple, Amazon)
  • 50. there are levels of business model strategy
  • 51. iPad stencil, actual scale, template by hortis, le studio. Feb. 2010. http://hortis.lestudio.ch date: project: screen: author:
  • 52. 3 experiments
  • 55.
  • 56.
  • 60.
  • 61. ? what does that have to do with business models and my organization?
  • 62.
  • 63. prototyping is “ the conversation you have with your ideas Tom Wujec, designer ”
  • 64. ? how can we boost prototyping?
  • 66. BusinessModelGeneration.com/toolbox iPad stencil, actual scale, template by hortis, le studio. Feb. 2010. http://hortis.lestudio.ch date: project: screen: author:
  • 67. Strategyzer.com / 50% off: “leanstartup_berlin”
  • 68. testing and pivoting prototypes
  • 69. a business model (prototype) might look great on paper... building block building buildin block g blo block ck building block building block build in block g building building block block build in block g .. but after all it is only a... building buil d block blo ing ck buildin g block
  • 70. ... a set of hypotheses guess guess guess guess guess guess guess guess guess guess g uess guess
  • 71. ! there is no proof that even the best business model on paper will really work
  • 73. there are no facts in the building... so get the hell out and talk to customers Steve Blank, entrepreneur & author ”
  • 74. pivots are business model changes without crisis Steve Blank, entrepreneur & author ”
  • 75. THANK YOU! BusinessModelGeneration.com AlexOsterwalder.com / @AlexOsterwalder BusinessModelAlchemist.com