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Building Businesses That Your Customers Love

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Building businesses that your customers love AI Group, Melbourne


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Your Head The biggest tool for creativity


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Your Head The biggest impediment to innovation


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We understand our current way with linear development 2 x 40 = 80


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However, exponential development are not comprehensible for humans 2 =? 40


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2 = 1,099,511,627,776 40


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We love MOTS ore f he ame


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1 Beyond optimization of the past We have to unlearn the past and rethink our business from the customer perspective If you do not do it, others will


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Do we really need somebody to tell us when we have to watch a show?


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Or do we want to hear from Peter, what he thinks on US credit rating?


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Do we need accountants?


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Actually, accountants are just one mean to get our books done, manage cash or get expenses ready for taxes.


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Do we need taxis?


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People want to move easily and with convenience in cities. Taxis are just one mean to do it.


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Do we need truck drivers?


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We need to move goods around. Human driven trucks are just one mean to do this.


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2 Beyond product innovation Don’t think in markets or products but in customer needs or jobs-to-be-done


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The company invented the digital camera in 1973 …


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…was the partner of choice for Apple to enter the digital camera market


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…but never understood that digital is not a product innovation but demands a whole new business model


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Digital was not about the best quality that traditional customers of Kodak loved


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From keeping to sharing memories – Digital solves new jobs for customers


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Customers discovered new uses, no sane person would have ever thought off


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Would yo u have dared t o say this? „Wow, I have invented the future of advertising. We do not need any videos or pictures or even color anymore. The future will be a text ad with maximal 95 characters. It‘s brilliant, isn‘t it?


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Instead of looking for better products, Google Adwords brought back relevance to the ad industry


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3 Don’t optimize the past, invent the future If you don’t think from your customers’ perspective and their jobs-to-be-done, you will be exterminated


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The customer perspective: Technology does not create value. It is the value proposition the customer loves product/services X happy customers solves creates customer’s job-to-be-done business model addressed by delivered by value proposition


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Do we need ho


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Do we just need a bed like at Formule 1?


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Or do we need a place with people in order to connect to the place like at AirBnB?


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Customer job to be done We do not need a hotel. We need an accommodation plus extras like connecting to people. That are the jobs-tobe-done. Customers hire a product or service to get a job done. The products are a means to an end, not an end in themselves. The value proposition creates the value for the customer, not the product!


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Value Proposition The job-to-get-done is solution neutral. The job is to provide accommodation plus extra benefits like connecting to people. Potential solution: §  3* hotel §  Formule 1 Hotel §  AirBnB (accommodation plus connection to people) §  friend that life in the city It is of uttermost importance to understand the core job we solve for our customers


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4 It’s not the product alone that creates value The value proposition has to be delivered by the whole business model


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„What is a business model? “


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The business model is the DNA of your business Are you aware of your DNA?


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The business model gives meaning to your employees and customers


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4 key questions for a successful business: What excites our customers? How do we create value for our customers? How do we earn money? Value Proposition Value Architecture Revenue Model Who is our team? What values do we pursue? Team & Values


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What excites our customer? Value Proposition Customer •  Who is our customer? •  What job do we solve for them? Value •  What value do we create for our customers? What value do we create for our partners?


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How do we create the value? Value architecture Offer •  What is our offer? Distribution & Communication Channels •  How do we reach our customers? •  How do we communicate with our customers? Core Capabilities •  What are the core capabilities we need? Partner •  What partners do we need? Value Chain •  What activities do we have to do to produce our offer? •  How does our value chain look like?


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How do we earn money? Revenue Model Cost Structure •  Cost structure is defined by your value architecture. Revenue Sources •  With what do we earn money?


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Who is on our team? What values do we live? Team & Values Team •  Who is our team? •  What competencies do we have in our team? Values •  What values do we life in our team? •  How do we interact with each other and with customers?


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Questions for a Successful Business Model Value Architecture Offer What is our offer? Value Proposition Distribution & Communication Channels How do we reach our customers? How do we communicate with our customers? Value Chain What are our value creating steps? What is our value chain? Core Capabilities What are the core capabilities we need? Customers Who are our customers? What job do we solve for our customers? Customer Benefit What benefit do we create for our customers? What benefit do we create for our partners? Partner Which partners do we need? Revenue Model Cost Structure Cost structure is defined by the value architecture. Revenue Sources With what do we earn money? Team & Values Team Who is on our team? What competencies do we have on the team? Values What values do we pursue? How do we interact with each other and the customers?


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Questions for a Successful Business Model Value Architecture Offer What is our offer? Value Proposition Distribution & Communication Channels How do we reach our customers? How do we communicate with our customers? Value Chain What are our value creating steps? What is our value chain? Core Capabilities What are the core capabilities we need? Customers Who are our customers? What job do we solve for our customers? Customer Benefit What benefit do we create for our customers? What benefit do we create for our partners? Partner Which partners do we need? Revenue Model Cost Structure Cost structure is defined by the value architecture. Revenue Sources With what do we earn money? Team & Values Team Who is on our team? What competencies do we have on the team? Values What values do we pursue? How do we interact with each other and the customers?


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The Leadership Revolution Conference, Melbourne Dr. Patrick Stähler, fluidminds Pty Ltd. Creating businesses that customers love! es New box . to think in ess New proc er to discov the future


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Please show me how you open this sachet of sugar?


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5 New boxes to think in are not enough Think like a designer. Plan the process, not the result, prototype, iterate Start with customer insights


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Business Design is a process of opening your mind and focusing at the end Point of View 1 2 Customer Insight 4 3 Understand Ideate 5 Design 6 Decide & Prototype Build & Learn


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Customer Insights based on jobs-to-bedone are the starting points for business model innovation Business model innovation New value proposition Customers’ insight


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6 Don’t start with a solution Observe the customer experience journey aka jobs-to-be-done Follow the whole customer journey


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1 Customer Insight -  Observe your customers What job is not yet or badly solved? -  How does the Customer Experience Cycle look like? -  On what customer insights is your idea based? -  validate customer insight


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Observe the customer along the whole customer experience journey and find badly or unsolved jobs-to-be-done Customer Experience Journey Buy Delivery/ Assembly Usage §  Understand how the customers are buying, using and disposing the product §  Understand the whole lifecycle of customers‘ utility Complements Service Disposal §  How can we improve the buyer‘s utility cycle? §  Can we do more for the customer? §  Can we leave something to the customer? Source: cp. Kim, W.C., Mauborgne, R., Knowing a Winning Business Idea when you see one, HBR Sep-Oct. 2000


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Unsolved job-to-be-done What is the biggest problem with socks?


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2 Understand -  understand the current solutions and their strength & weakness -  understand how the potential customer thinks and decides -  understand the market & market mechanism


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3 Ideate Develop as many ideas as possible in the area of -  customers/ value proposition -  value architecture -  revenue model


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Business Model: Value Architecture Offer Use the canvas to fine tune your business model Distribution & Communication around a better Channels value proposition Value Proposition Customers Value Chain Customer Benefit Core Capabilities Partner Revenue Model Cost Structure Revenue Sources Team & Values Team Values


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4 Design -  decide for three or four options -  design the business models for the options -  check the interdependencies in the business models -  work on the uniqueness (positioning) -  optimize the building blocks Business Model: Value Architecture Offer Use the canvas to develop your business Distribution & Communication model Channels Value Proposition Customers Value Chain Customer Benefit Core Capabilities Partner Revenue Model Cost Structure Revenue Sources Team & Values Team Values


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5 Decide & Prototype -  decide for the best model to go for -  build prototype -  test prototype with customers -  write business case -  decide again or work on different option


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6 Build & Learn -  execute business model -  learn continuously from customer feedback and control KPIs -  adjust and refine continuously the business model


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1 2 Customer Insight -  -  -  -  -  -  -  -  -  -  -  -  decide for three or four options design the business models for the options check the interdependencies in the business models work on the uniqueness (positioning) optimize the building blocks Develop as many ideas as possible in the area of -  customers/ value proposition -  value architecture -  revenue model understand the current solutions and their strength & weakness understand how the potential customer thinks and decides understand the market & market mechanism 5 Design Ideate Understand Observe your customers What job is not yet or badly solved? How does the Customer Experience Cycle look like? On what customer insights is your idea based? validate customer insight 4 3 6 Decide & Prototype -  -  -  -  -  decide for the best model to go for build prototype test prototype with customers write business case decide again or work on different option Build & Learn -  -  -  execute business model learn continuously from customer feedback and control KPIs adjust and refine continuously the business model


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More Information on http://blog.business-model-innovation.com Dr. oec. Patrick Stähler fluidminds Pty Ltd. Level 19, 1 O‘Connel Street Sydney NSW 2000 Phone +61-2-8249 1861 info@fluidminds.com.au


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