Lift11: Alexander Osterwalder, The new business models [en]

[fr] Notes de la conférence Lift11 à Genève.

Live and India-lagged notes from the Lift11 Conference in Geneva. Might contain errors and personal opinions. Use the comments if you spot nasty errors.

Process of creating new businesses, and how that’s changing today. What does the process of car design have in common with creating your business? Not very much. Car design is a structured process, with crash tests before you roll. In business, it’s real life directly. Could we learn something from car design?

Dreamy: Mike is 34, MIT graduate, passionate about a business idea, masters the tools, does market research, crunch the numbers (tweak them a little), goes to find money, and builds his company with the huge pile of cash he got.

But… most business plans do not survive the first customer contact. This means we rely on real-life crashes. No crash tests.

Car design: sketching, all angles, different varieties, then prototypes. Then tests.

Could we design business models in the way we design cars? We know what the parts of a car are, but what exactly is a business model? When people try to explain business models, tower of Babel. We don’t have a common language to talk about business models => the business model canvas.

  • customer segments
  • value proposition
  • customer relationships (what kind of relationship)
  • revenue streams
  • key resources
  • key activities (what do we do?)
  • cost structure

Nine building blocks for a business model that can help us make it tangible.

Solar energy: horrendous upfront costs to put panels on a roof. Guy came up with a different business model: sell solar energy at a fixed price — target companies. Pays the upfront costs in exchange for a 5-10 year commitment to the fixed price. SunEdison.

We can sketch our business models.

Prototyping? Poster on the wall. Sketch out many different variations on the initial idea or business model. Variety! Usually we stick to ONE business model. What a shame. Each product can lead to five, ten, twenty business models. Go through them if you’re serious.

Amazing product: peepoo — portable one-use toilet, biodegradable. Not-for-profit is not what we want to do, so which sustainable business model? Free? Licensing? Cross Subsidies? Franchise? …?

Simulate the different business models. For example a fremium model for a running iPhone app. *steph-note: Alex goes through different scenarios.*

The simulation helps you see what might work.

But then, how do you test? Everything in your business model is a guess. Take it outside and test it to learn. Talk to customers (trivial). Fake ads can help you test. Then feed the results back into your business model. Only then can you think of building.

  1. an entrepreneur in the 21st century needs to be systematic about their process
  2. need to play
  3. test hypotheses before building organization

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