Archive for October, 2010

The innovation of change

October 12th, 2010

So yesterday I was listening to the analysis of a start-up and it was recommended that they change their business model and my first thought was “to what?” My mind then flashed back to a book I’d seen called, “Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers” written by Alex Osterwalder.

He starts off by defining a business model as something that “describes the rationale of how an organization creates, delivers, and captures value.” Then Alex introduces 9 building blocks that make up most business models. They include:

  1. Customer Segments-Who will use the product or service?
  2. Value Propositions-Why would they use the product or service?
  3. Channels-How is it delivered to the customers?
  4. Customer Relationship-How will relationships be developed and contact maintained?
  5. Revenue Streams-How does the company make money?
  6. Key Resources-What unique assets are required to create and deliver the product or service?
  7. Key Activities- What actions are needed to create and deliver the product or service?
  8. Key Partnerships- Who will help you do it all? (suppliers, outsourcing, distributors, etc.)
  9. Cost Structure- What are the main sources of cost required to create and deliver it?

They’re arranged into a tool titled “The Business Model Canvas” pictured below.

The remainder of the book gives examples of common patterns, strategy, and how to use the tool.

If you’re interested in more business model innovation you can check out a blog by Patrick Stähler who references some academic work that has been done. Another resource is a blog by Anders Sundelin-check out this visual representation of the evolution of business models.

What kind of new business models can you come up with and what is missing in this discussion?

The Best Place to Be

October 4th, 2010

This morning I was involved in the beginnings of a great discussion about creating a disruptive financing model for lean start-ups and then late one of the participants posted the following interview that Kauffman did with Steve Blank. We’ve referenced Steve’s work in another post about customer discovery.

This particular interview is great because it gives a condensed history of how Silicon Valley became Silicon Valley. Steve offers this historical flashback as containing the answer to what many regions around the country are asking, namely, “How do we create another Silicon Valley?”

He identifies the concentration of not only talented people from all over the world but the culture of risk taking that is created when those people migrate there. Making the argument that a culture of risk taking can’t be created by people who live close to the social norms of their childhood.

So according to this theory, if someone is seeking to simulate Silicon Valley and use entrepreneurism as an economic driver in a region in the US; they will only experience success if they are able to create an innovation cluster by having the best and brightest move to that location and keep them there long enough to attract the next generation of innovators and entrepreneurs.

On the other hand who wants to be Silicon Valley? I refuse to believe that is the only way to create a successful entrepreneurial environment. I do however believe that entrepreneurism is a great economic driver for not only the US but for the world, especially considering the current global unemployment situation.

So what are the barriers that need to be overcome or factors that need to be in place to create a thriving entrepreneurial economic driver where you live?

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