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Types of Business Models/Strategies
Joshua GansCreative Destruction Lab (Strategy), 2014
Idea
Business Model
Business Model
Business Model
Business Model
?
?
Focus
• Books • Online Search • Bricks & Mortar • Low prices
• Books • Online Ordering • Agent • Premium
Core idea: selling books online
?
How do you identify different business models?
Answer: start with broad focus
Do this or that, not both
When do you compete?
Who do you compete with?
When do you compete?
Today … for the market
Tomorrow … in the market
• Patents • Proprietary networks • Own key resources
• No IP • Open platforms • Develop capabilities
Control Execution
Who do you compete with?
Current incumbents Other entrants
• Product market entry • Stealth/niche tactics • Develop assets
• Licensing/acquisition • Quick to scale • Partnerships
Compete Cooperate
Control
Execution
Compete Cooperate
Control
Execution
Description
Patent, 1st mover
Superior product Lower costs Capabilities
Time-to-Market
Slow
Fast
Future Returns
Unique assets
Unique capabilities
“...you charge a small amount of money ... and that's it, you're done. You don't need to go seek venture capital money, you don't need to sell out your users' privacy. They're not even your users, they're your customers — for the first time in a
decade. It's great.”
"My goal has never been to dominate the market," he says. "My goal has always just been to just
make a living."
Mobile Taxi/Limo Services
Mobile Taxi/Limo Services
Compete Cooperate
Control
Execution
Mobile Taxi/Limo Services
Compete Cooperate
Control
Execution
$332m
$1.5b $77m
$0.05m
Explain focus
UberX?
Control
Execution
Compete Cooperate
Control
Execution
Compete Cooperate
DISRUPTION
Orientation towardscompetition & investment in execution
Novel value creation for unserved customer combinations
Innovate along a new technology trajectory
Leverage local talent & local users
Disruption Strategy
"Creative Destruction"
Lean experimentation & hustle
Rapid product development & time to market
DISRUPTION
CoherenceDISRUPTION
Control
Execution
Compete Cooperate
DISRUPTION
Control
Execution
Compete Cooperate
VALUE CHAINDISRUPTION
Orientation towards collaboration, investment in execution
Integrate new and old technologies
Novel value for existing end customers
Value Chain Strategy
Leverage access to value chain players
“Synergy”
Scarce talent & capabilities
Unique core competency
VALUE CHAIN
CoherenceVALUE CHAIN
Control
Execution
Compete Cooperate
VALUE CHAINDISRUPTION
Control
Execution
Compete Cooperate
INTELLECTUAL
PROPERTY
VALUE CHAINDISRUPTION
Intellectual Property Strategy
Orientation towards collaboration, investment in control
Innovate generalizable, transferable technology
Defined value creation for existing end customers
Find a supply of high human capital
“The Ideas Factory”An integrated team of IP managers & inventorsA source of new complementary innovations
INTELLECTUAL
PROPERTY
CoherenceINTELLECTUAL
PROPERTY
INTELLECTUAL
PROPERTY
DISRUPTION VALUE CHAIN
Control
Execution
Compete Cooperate
Control
Execution
Compete Cooperate
INTELLECTUAL
PROPERTY
VALUE CHAINDISRUPTION
ARCHITECTURE
Architecture Strategy
Orientation towards competition, investment in control
Build an ecosystem around a new technology
Defined value creation for unserved customers
Leading & shaping the ecosystem
“Zero to One”
Insight into different stakeholders
A “hub” in the market
ARCHITECTURE
CoherenceARCHITECTURE
Control
Execution
Compete Cooperate
INTELLECTUAL
PROPERTY
VALUE CHAINDISRUPTION
ARCHITECTURE
Invest in execution, avoid competitive detection: Fast speed to market, imperfect product is tolerated by customer
Choose new tech S-curve: Nascent technology that needs customer input and iterative improvement
Choose tails of market curve: Customer segments that are currently underserved due to size or niche demands
Target an unoccupied position: An isolated position on the technology frontier distinct from existing customer needs increases lead time on incumbents
Build capacity for rapid experimentation: Team needs sufficient talent to rapidly iterate product based on customer feedback
Disruption Strategy
Leverage ecosystem to exploit market inertia: Choose an ecosystem where there is easy access to underserved customers; build relationships with influencers in these niche customer segments
Value Chain Strategy
Invest in execution, orient to collaboration: Bring to market the best solution for a link in an existing value chain
Help customers serve theirs: Enhance your customer’s value propositions and market power
Bridge new and old S-curves: Help the existing market leverage opportunities from the new technology S-curve
Occupy a unique position: Choose a link in the value chain served by outdated technology and human capital, with no innovative competitors.
Build a team of scarce talents: Team needs talent in innovation and business development. To avoid vertical integration or imitation from customers, the team needs to possess unique capabilities.
Find and follow your customers: Choose to an ecosystem where there is access to all stakeholders in value chain necessary for deployment and support of product.
Invest in control, orient to collaboration: Gain control through patents, trademarks, copyright or trade secrets of a novel invention.
Invent generalizable technology: Modular components that can be easily transferred and integrated into existing value chains
Focus on existing customers:Enhance value in a known way for existing customers and their end users
Be the source of new innovations: Occupy a position on the technology frontier with opportunity for standard-setting; continual generation of inventions
Build an ideas factory: Be he source of new inventions by building a team with talent in innovation, commercialization and IP management
Intellectual Property Strategy
Seek sources of smart, affordable talent: Choose an ecosystem where there is a supply of highly-skilled talent and an environment that can retain them
Invest in control, compete for the market: Control the linchpin that enables the market to work effectively
Connect stakeholders together: Understand how to match select stakeholders together to create and deliver value for all sides
Build a foundational technology: Develop either a platform upon which others can build products and services or a market intermediary
Position as a hub in the market: Rather than competing directly in the market, it is a competition to secure the ecosystem, as the de facto hub of the market.
Seek out the influencers: Choose an ecosystem where there are key influencers to build relationships with, and thought leadership that generates imitation
Build a dual-focus team: Team needs the capabilities to both grow the ecosystem and monetize the platform/product
Architectural Strategy
Bionym
CEO: Karl Martin
Your venture is an experiment.
You need to figure out which one to run first.
