What do you think is the most powerful component of a successful and profitable business? You might say marketing or technology – but I think it’s the business model.
When you think about all the companies that shifted and transformed how we consume products and services, you’ll notice that it was the creativity of the business model that made the difference – Blockbuster, Netflix, the Internet, Circue De Soleil and countless others that I’m sure you’ve thought of.
I realized this a long time ago and have always looked for some kind of book or resource that would give me this magical list of business models that I could choose from. I never did find a good one – until now.
About two weeks ago, I went into the local book store on a whim and was immediately grabbed by Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers by Alexander Osterwalder & Yves Pigneur. It literally took a village to put this book together as it was co-created by 470 Practitioners from 45 countries and designed by Alan Smith.
Business Model Generation is a high quality book; slick, high quality paper, full color and graphics that will knock your socks off. It’s definitely not what you might associate with a book about dry and boring business models. I’m not sure if Wiley, who published the book in 2010, or maybe the authors thought that the subject required an extra “Ooomph” of graphics to attract readers or if this was an experiment. But whatever the reason, I can tell you that this is a book that I would have picked up regardless of what it looked like.
Just as I Suspected – There’s a Model for Developing a Business Model
Aside from the sheer visual and tactile experience, you’re going to love Business Model Generation for the simplicity and accessibility they create around the subject of deconstructing and reconstructing business models. Of course, there’s a model for that and the book is written, designed and constructed around this model. Here’s a quick overview.
Canvas: The first element is the Canvas. This is a sort of map or chart of all the elements that you will need to create your business model and it includes:
- Customer Segments – who you are selling to
- Value Propositions – what you’ll be selling
- Channels – how the offer is delivered to the customer
- Customer relationships – how you will connect with your customer
- Revenue streams – how you will make money
- Key resources – what you’ll need to make it all happen
- Key activities – what actions HAVE to take place
- Key partnerships – who will help
- Cost structure – how you’ll pay for it
- Patterns: The next level is to use the canvas as the platform to brainstorm as many possibilities as you can for each component. This is the most critical activity because truly elegant, creative and profitable business models come from this kind of thinking.
- Design: Profitable business models aren’t born, they are created and designed with purpose. This part of the process gives you tools to give your ideas structure.
- Strategy: The next phase is to take your model into the real world.
Business Model Generation by the Numbers
I don’t normally share this kind of information, but this book is different because it’s an example of a true global effort:
- The book took 9 years to write.
- It had 470 co-authors.
- There were 8 prototypes.
- The contributors spanned 45 countries.
- There were 1,360 comments on the book.
- 137,757 views of the method before publishing.
- It consumed 4,000 hours of work and 28,456 Post-It™ Notes.
There are many more numbers involved here. I just thought I’d share just a few of what made this book an experience all the way around – to create, to read, to use and to share.
Do I Need to Read This Book?
- Do you see yourself as having an entrepreneurial spirit? (Yes/No)
- Are you constantly thinking about how to create value and build new business or transform a business? (Yes/No)
- Are you trying to find innovative ways of doing business to replace old outdated ones? (Yes/No)
You know what comes next don’t you? If you said “Yes” to any of these – this is a book for you.
We all work the most basic of business models. Some charge by the hour and others sell products and have set up some kind of pricing or process for doing business. But seriously, be honest, how many of you have actually dedicated serious strategic thought of how your business is going to best achieve its mission in the world and make money?
If you are a fan of the classic Blue Ocean Strategy then you may recall that a solid and creative business model can transform an industry and knock out the bulk of your competitors simply because they have invested and built an infrastructure that the competition simply cannot get around.
Business Model Generation is one of those books that’s going to serve as a reference and a guide to help your business make more money, serve more customers and become a bigger expression of your mission.