Currently viewing the tag: "Business model"

Don’t cut in what is differentiating

When we face a hostile environment due to economic difficulties or constraints and with many generalized complaints, we tend to look for a savior that brings some hope for a bright future.

Nowadays, the rescuers are called entrepreneurs, or young people with talent. Although they are not certainly the only able to construct the difference they are certainly in large numbers.

For these people ideas bounce as capsules of soft drinks between smiles and will to win but often this joy is suddenly destroyed or questioned because some questions were not made.

What happens is that an idea is not the economic model and to have some idea of how the economy that is being proposed will define the initiative for the future profitability can help keep this smile.

To think about the business model at the beginning means not make sacrifices later.

Our business model is in line with the interests of the parties involved?

Has anyone tried to do what we want to do?

When we try to understand why others fail we may be building a difference. We can also learn from the mistakes of others to build something solid and sustainable rather than just look at the success stories or best practices.

Here are some reasons, given by Idris Mootee, why so many innovative initiatives fail:

-“The innovative new products are not shown in the right user context thus creating a misunderstanding of the applications

-The new technologies behind the innovative product are not linked to an exciting and worthwhile market opportunity or are too niche…

-The core functions of the innovative new products cannot support themselves as stand alone products and only work as features.

-The promised performance of the innovative new product does not materialize and does not provide enough customer value

-The innovative new products were distributed through the wrong channel and compromise the value propositions

-The expectation of consumers adopting the new products is over estimated…”

Associated with these errors is also a flaw that is beginning to be apparent in people who want to take their ideas to the market following the steps frequently spoken.

“In the pursuit of a minimum viable product (MVP), we’ve seen that it’s important to evaluate early the critical components that will differentiate an offer from competition and make a product truly viable.”

Our innovative proposals to solve problems, are they product or business, should not result of the escape from difficult problems and should be tested through prototypes in such a way that we can avoid all potential failures pointed behind.

This leads us to a search for several possible directions, keeping a unit, and not allowing a single choice to impede any work done.

Prototypes allow us to reconcile feeling and function of a project at a stage prior to the decision on the risks of the project. Prototyping is extremely useful not only in the design of products and services but also in the business model.

Inside an organization when we admit the possibility of prototyping before the decision to implement a new concept of business in undeveloped spaces we create conditions to show decision makers what anyone else is doing but could be done and what are the new possibilities and the hidden surprises.

The prototypes should be quick to be effective and for that new ideas which may arise are validated and can provide a valued interaction.

The prototypes are used to express an idea to somebody and since this idea was conveyed the prototype fulfilled part of its raison d’être but there is always a learning environment that should not be ignored.

The prototypes should demonstrate all interactions of the project so that relevant actions are identified and with possibility to create risk factors in considering in decision-making.

To build a prototype of a business model:

-Make an sketch of your business model using your preferred methodology.

-Add pictures or images for a preview and easier understanding.

-Test the viability of your ideas with a simple report of possible risks.

The prototype helps us to explore various scenarios and stress test the feasibility and profitability of the business intended. It is important, however, that it force us to call for the arena, methodically, all our assumptions.

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Reasons for storytelling

When we hear tell a story about the success that a team had and how they did it, we feel like if we’re working with our team, but without knowing, what to do in relation to some crucial issues, such as our business model.

-The story can help make sure that all aspects of the business model have been addressed. .

-The history allows you to verify that all aspects of the business model are consistent with each other.

-The history allows checking whether everyone understands clearly the business model. The business model is the concrete topic for discussion on how everything fits and reduces or negates any misunderstandings.

-The story lets draw and redraw the communication processes.

In these times we experience the story, as if we had enjoyed a wonderful meal.

In a story, the idea that resides inside the story can become part of people. They don’t feel the story as outside observers, or as a critique about something or someone. They feel the story as active participants in story.

If we look back and walk through the moments that we remember, we consider that what happened build what we are today. It’s our history and our story.

No matter that the assignment of responsibilities for the good and bad times, because those moments were experienced and leave a trail that marks the path traveled.

And that’s why a story is a fact dressed with an emotion that obliges the action and that transforms our world.

The truth is that when we tell a story, when we look at the past, it doesn’t always arises in the same way. There will be times when the past look more smiling and others in that the bad times will prevail.

However, if we look to the future and if we want to tell our story, the story of what will happen, we also do not avoid the past. The past determined the way up here, and makes the decision for the future, not least by denial of unpleasant experiences, which should not be repeated.

Tell the story of the future is a matter that should be present in the leaders of the organizations that have the purpose of innovation. But it is not a a discipline held in schools where analysis and synthesis occupy the most of our area of reasoning.

“This kind of approach requires completely new capabilities. The successful strategists of the future will have a holistic, empathetic understanding of customers and be able to convert somewhat murky insights into a creative business model that they can prototype and revise in real time. To do all that, they’ll have to be good communicators, comfortable with ambiguity and ready to abandon the quest for certain, single-point answers.” – Roger Martin

If our project is to make our idea that is, new business models, to be adopted by others then we have a compelling story.

We can complement the numeric data to be presented with examples, stories, metaphors and analogies to make our positions. The use of color given by story combined with a language of the living word, lends a convincing quality and tangible to our point of view.

We know to tell our story with emotion and we are able to pass on to those who hear. With the story of our idea, our business model, it is the same thing, we tell our idea inside out and we put all the elements fit each other, so that the effect become maximum and causes emotions that we seek in the other.

An idea that we want innovative has to be transmitted with groundbreaking passion. It is the heat of passion which makes vibrate our listeners, readers or viewers.

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Desirable, technically possible and economically viable

I frequently find myself in a state of simultaneous dismay and delightful admiration about the end product of designers.”

I joined this assertion of Don Norman to one of the major problems related to the ideas, innovation and entrepreneurs, and that is – To be able to create a balance between the desirable, feasible and economically viable. And this is often a mix of emotions that accompany people on the path that an idea has to go through until it is actually a case of work done.

What causes this mix of dismay and delight?

Designers are trained as craftspeople, without any substantive knowledge of the content areas in which they do their work. My dismay comes from their lack of understanding and by the confidence with which they proclaim masterful solutions to the world’s problems. They often produce innovative, clever solutions, but with no evidence that they have actually addressed the most critical parts of the problem or that their solutions actually work. They are often unaware that others have toiled with those issues for decades, that the problems are deep and profound, and that no single approach, no matter how brilliant, will suddenly solve all the issues.

On the other hand, this very lack of knowledge can produce profound insights that lead to advances in understanding, hence my delight. Having too much knowledge can lead to following the failed footsteps of those who preceded you.”

On the other hand, this lack of knowledge can produce profound reflections that lead to advances in understanding, hence my joy. Have a lot of knowledge can lead to failed follow in the footsteps of those who have preceded you.”

“Why not start off with a wide range of unconstrained ideas, then together with the sound specialists, refine the result to be both graceful and effective?”

Many of the people who want to transform their idea into a business on its own initiative seek to do soon the assumption that they dominate all the aspects of the process beyond and are convinced they have the skills needed for it.

The truth however is tougher than the dream and requires a lot of work and a lot of collaboration in an environment of diversity and adversity.

The approach of the most critical parts of a problem and verification of functionality of things are two important aspects referred by Don Norman as lacking in the innovative production of designers.

However when we talk about business it fundamental that we are were that “Innovation needs to happen at the intersection of desirability, viability, and feasibility.  These three elements make up the legs of a proverbial stool called “it’ll work in the world.”  Too many innovation initiatives focus on only one or two, much to their detriment.  For example, creating something without regard for its feasibility out in the world is not unlike designing a bridge without regard to the existence of gravity: it might work, but the likelihood of it being a reliable, safe, means of transport will be greatly diminished.  And while it might be tempting to “really be creative” by ignoring constraints, a wiser approach is to view constraints as liberating.”- Diego Rodriguez

This concern of crossing the desirable with what is technically feasible and economically viable reminds me of an initiative that I have taken a few years ago, with a family legacy in the cosmetics industry.

I had desired products and the technical capacity to produce and new ideas as well as some capital and enthusiasm. Everything ran serenely (perhaps too much) until arise constraints and adversities arise my domain.

Then I checked how much interdisciplinarity and collaboration are so important when we talk about in the implementation of our projects.

Now looking back I think it is easy to identify what was missing and that Graham Hill in a very clear and surgical way calls to attention in a comment on “Starting up a Start-up. How to start a service design business? “:

“Starting a business brings with it many challenges. Jess lays out some of the many human challenges involved in his excellent response. He also mentioned – but didn’t elaborate on – perhaps the most important thing of all, namely, do you have a viable BUSINESS MODEL. Unless you have a viable business model, no amount of marketing, salesmanship or consulting skills will get your business off the ground.”

The lack of knowledge can produce profound reflections, as Don Norman said, but can also bring failure, I say.

It is true that no single approach can suddenly solve all the problems and that’s why it is good to remember:

Creativity and design thinking is nothing without a business model to take the ideas generated to market. And a willingness to get out of the building as soon as possible to test the ideas.Graham Hill

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My business model

I’m afraid of white spaces but some have fear of the dark and we should not!

The kinds of visions that lead to business models worth exploring don’t start with value propositions or customer segments. They start with imagining an important pair of experiences. Peter Friedman

The good and bad ideas, good and bad experiences can be helpful to imagine a future happiness for many companies, but often the imagination is suddenly blocked by fears or by lack of knowledge.

I don’t know how to do and I prefer a tested model!

This lack of knowledge and this fear favors the adoption of business models “ready to eat”, and shift all the creativity and inspiration for the filling of these pre-established maps.

Generally, a successful company becomes very good over time when they grow their core and a company grows when protects resources, improve existing products and create new, expands markets, increases efficiency and improves processes.

And all this is to extract the maximum possible value of its nuclear activities.

Also generally a company continues to develop and improve critical business rules and metrics that ensure proper implementation, establish discipline and exercise control throughout the organization.

This means that explicitly or implicitly, companies operate under a business model.

We can say that a business model, in essence, is a representation of how a company creates and adds value both to the client as to the company.

Usually when this happens, companies also create its comfort zone and often fall prey to the structures and existing business models and fail to broaden their horizons, creating, and innovating.

Mark Johnson proposed the use of white spaces so that companies can travel to unknown lands and at the same time be able to work the inherent fears by getting out the comfort of the existing business model.

White space is the range of potential activities not defined or addressed by the company’s current business model, that is, the opportunities outside its core and beyond its adjacencies that require a different business model to exploit.

What matters is that it describes activities hat lie far outside a firm’s usual way of working and presents a series of unique and perplexing challenges to that organization. It’s an area where, relatively speaking assumptions are high and knowledge is low, the opposite of conditions in the company’s core space.” – Mark W. Johnson in       “Seizing The White Space”

However we know that the main reason why most businesses fail in the creation of new businesses is that they fear action which may provide different environments that are ambiguous.

I think that tolerance to ambiguity genuinely exists only if we design thinkers.

The ability to accept ambiguity during a process and accept it as an opportunity in which there is no right or wrong answer can lead to several concepts that can benefit each other in the final. Further, when the orientation of the project is made of the future backwards instead of projecting what is and what it will be for the future, allows us to fill the white space with possibilities for truly differentiating and innovative business.

Innovation is only possible when we challenge and question the norm and try to find the best possible answer to a problem is the purpose of a design thinker, that is, when you find an opportunity becomes more important than solving problems.

But we need a structure (Stanislavsky) to unlock our creativity-a disciplined process that can propel us towards new ideas and in the case of business, the better we can understand the structure of business models, better will be to create them.

Indeed, conceiving of a truly innovative new business model does not need to be a matter of imagination and serendipity, or luck. It can be an orderly process that uses structure to unlock creativity, rather than the other way around. In this chapter, Johnson shows how the four-box framework–customer value proposition (CVP), profit formula, key resources, and key processes–can help you systematically generate the right questions and assumptions; organize and categorize them in a constructive way; and implement, test, and learn about them in the right order to create a new business model.”

This is a proposal which, I believe, applies a company grew based on its nuclear powers and intends to embrace new opportunities as it can be applied in the construction of a new company.

In any case it is important that our State of mind is dominated by motivation of “promotion” instead of “prevention” motivations because it defines how we see the risk.

“Whenever we see our goals — whether they are organizational or personal — in terms of what we have to lose, we have what’s called a prevention focus. Prevention motivation is about obtaining security, avoiding mistakes, and fulfilling responsibilities. It’s about trying to hang on to what you’ve already got and keep things running smoothly, and it isn’t at all conducive to taking chances.

If, instead, we see our goals in terms of what we might gain, we have what’s called a promotion focus. Promotion motivation is about getting ahead, maximizing your potential, and reaping the rewards. It’s about never missing an opportunity for a win, even when doing so means taking a leap of faith.”- Heidi Grant Halvorson

The freedom allowed in white spaces favorite creativity to the detriment of the comparative analysis of best practice and enables the discovery of many levers for success.

 

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