Business Model Design for Designers

Business Model Design for Designers

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JIM KALBACH

Principal UX Strategist, USEEDS°

@jameskalbach

www.ExperiencingInformation.comwww.UxToGo.com

www.xing.com/profile/James_Kalbach

Rutgers University, USA

Designing Web Navigation

What is a business model?

Was ist ein Geschäftsmodell?

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“The Business Model: Theoretical Roots, Recent Developments, and Future Research”

C. Zott, R. Amit, & L.Massa.,

WP-862, IESE, June, 2010 - revised September 2010

http://www.iese.edu/research/pdfs/DI-0862-E.pdf

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Definition

A business model describesthe rationale of how anorganization creates, delivers,and captures value.

ALEXANDER OSTERWALDER

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Visualizing Business Models

„A business model, from our point of view, consists of four interlocking elements that, taken together, create and deliver value.“

MARK W. JOHNSON et al., “Reimagine Your Business Model,” HBR (Dec 2008)

Enter:

The Business Model Canvas

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1. Customer Segments

The groups of people or organizations an enterprise aims to reach and serve

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2. Value Proposition

The bundle of products and services that create value for a specific Segment.

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3. Channels

How a company communicates with and reaches its Customer Segments to deliver a Value Proposition

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4. Customer Relationships

The types of relationships a companyestablishes with specific Customer Segments

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5. Revenue Streams

The cash a company generates from each CustomerSegment (costs must be subtracted from revenues tocreate earnings ;)

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6. Key Ressources

The most important assets required to make a business model work

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7. Key Activities

The most important things a company must doto make its business model work

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8. Key Partners

The network of suppliers and partners that makethe business model work

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9. Cost Structure

All costs incurred to operate a business model

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The Business Model Canvas

The nine business model Building Blocks formthe basis for a handy tool, called Business Model Canvas.

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The Business Model Canvas

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The Business Model Canvas

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Front Strage: Customer

Facing

Back Stage:Business

Processes

CustomerBusiness

BFD,Kalbach

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Business Model Innovation

IBM Global Service, “Business Model Innovation,” Sept 2006

“ While CEOs still believe that product,

service and operational innovations are

important, they feel that innovation

must also be applied to a company’s

very core — to the way it does business

and drives revenue. CEOs deemed these

business model innovations vital to

creating new and differentiating value

for their companies.”

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Creativity & Business

“CEOs identified creativity as the number-one leadership competency of the future…

[But creativity] isn‘t something they learn within their company, and it certainly isn‘t something they are taught in business school. Business schools teach people how to be deliverers, not discoverers.“

JEFF DYER AND HAL GREGERSEN, The Innovator‘s DNA, Harvard Business Press, 2011

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Prototype Business Models

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2.8 billion people don’t have proper sanitation

Every 15 seconds a child dies from sanitation-related illnesses

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The Business Model Canvas

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People in dev. world w/o

toilets

Accessible, affordable sanitation

PeePoople

The Business Model Canvas

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People in dev. world w/o

toilets

Accessible, affordable sanitation

Franchiser - Women

QA

Management, Coordination of Franchises

IP, Technology

HR

Direct POU sales on

location via Franchise

Per bag sales revenue

Chance to earn money

NGOs

Local governments

UN

Production Bulk sales

Peace of mindSales of

franchise packages

Awareness, Marketing

Direct, personal,

family

Franchise operations

Partner

Distribution and collection

Transporta-tion

PeePoople

Business Model Prototyping

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BMC Addresses Problems of Business Models

• Different definitions and understandings

• Hard to change in established organizations

• The logic is “invisible“

• Often not creatively designed

It Doesn’t Work*

(*for you, most of the time)

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Uses of the Business Model Canvas for Designers

1. Understanding business models

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JARED SPOOL, “Revealing Design Treasures From The Amazon Site“

#4: Never forget the business

“Amazon’s business model is deliberately designed, and the site is designed to fit the business.

You have to start with a great business model to produce a great experience.“

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Business Model Design: Disruption Case Study [Xiamter]http://experiencinginformation.wordpress.com/2011/09/02/business-model-design-disruption-case-study/

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Uses of the Business Model Canvas for Designers

1. Understanding business models

2. Showing stakeholders why UX is important

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The Business Model Canvas

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Uses of the Business Model Canvas for Designers

1. Understand business models

2. Show stakeholders why UX is important

3. Use canvases to show “invisible“ logic

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Lean Canvas

http://succinctstories.wordpress.com/2011/02/28/running-lean-%E2%80%93-business-canvas-variant/

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Project Canvas

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Project Canvas

http://teensplusdesign.wordpress.com/2011/03/22/tisdt-customer-journey-canvas/

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Canvanizer.com

http://teensplusdesign.wordpress.com/2011/03/22/tisdt-customer-journey-canvas/

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Project Canvas

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Download the Project Canvas°http://uxtogo.wordpress.com/2012/05/25/the-project-canvas-defining-your-project-visually/

USEEDS° Blog: www.uxtogo.com

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Danke schön