organization

We're in a world where exponential change is the new normal. Old economic structures are being challenged by newer ones and networked technologies are changing the way we can distribute resources. For a world with so limited resources, it's amazing how much idle-capacity we have at the moment. This does not only apply to natural resources such as minerals and forests, but also applies to human resources, such as knowledge, skills, and tangible resources such as tools and equipment. In his presentation, Edial Dekker dives deeper in the role of social layers connected to the 'social object' of distributed resources and the effects that it has on the network. The talk will touch the concept of a trusted network, the rise of the micro-entrepreneur and why it challenges us to rethink the way corporations and organizations are structured.

Alex is an entrepreneur and author of Business Model Generation, a bestselling management book which he co-wrote with Yves Pigneur and 470 people from 45 countries. His method to design and innovate business models is used by start-ups and leading companies across the world.

At Lift11, Alex will tell us how organizations start approaching the challenge of designing a business model in a radically new way. Under the influence of web startups, we are leaving the world where everything is planned in advance before the launch of a new service or product. Increasingly, companies are learning how to test their business model upfront in order to reduce the risk of failure in an uncertain world. They don't just launch their products in "beta" mode, but but also their business models as they iterate or pivot based on the feedback they receive from their clients. This is a particularly challenging task for large companies who will have to become more agile, rapid and open.

Alex Osterwalder

Business Model Innovator
OSF (CH)
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Laurent Haug: What has changed in the way we design our business models?

Alex Osterwalder: Historically, business models would "grow" organically in a long and an-adhoc process, organized around a specific product, product innovation or new market segment. Now we have to go beyond that. We need to be able to systematically search and design powerful business models. Product innovation or technology innovation is not sufficient anymore. What is going to differentiate you and give you a competitive advantage is the combination of a great product and a great business model. Apple is one of the best example: the iPhone is a piece of hardware, but there is a whole ecosystem behind it. This shows that product innovation is not enough anymore. Competitors like Samsung have a hard time to catch up, because they are product focused.

What is the process of creating new business models?

I like to compare it to the process of creating new products. It has changed a lot under the influence of web startups. Before we would build a product and launch it once it was ready. Now we do it in a different way. We build a "quick and dirty" prototype, then we start learning as we go. The evolution is based on iterations, starting very lean, with a viable but minimal product for testing and refining. This movement is called the "lean start-up". We need to do exactly the same for business models. Create prototypes and iterate until we can prove it works. Only then should we start start hiring and building the company.

Start-ups are quickly learning how to do this, but it is also happening inside large companies. In these larger structures, crisis has forced a change in attitude, so they are slowly becoming more proactive, and they create processes to identify and test business models continuously and in a more efficient way. That's one of the reasons why Silicon Valley start-up guru, Steve Blank, and I are working together. We are combining our methods, the Customer Development process and the Business Model Canvas, to help companies search, design and test business models rapidly and cost effectively without taking on too much risk. That's the big challenge: build innovative business models without taking on too much risk.

An example is Daimler, which is in the business of building and selling vehicules. Their potential for growth is limited in that market, so they setup a business innovation team to search for new business models. One of the concepts they came up with is the car2go concept, basically a form of car sharing on steroids, which they are testing in Germany and the US. This is very different from what they do in their core business.

Nestlé is another example. Nespresso is the fastest growing business inside the company. But they are experimenting with new models like Dolce Gusto. Nespresso sells only through their own channels, Dolce Gusto is present in the major retail outlets, focusing on cappuccino lovers. Then there is the long-established Nescafé brand. That shows that Nestlé has a different business model for each segment, and that they are moving from a product based portfolio to a business model portfolio.

Does it mean companies are reorganizing around "business model" based business lines rather than product based lines?

There is no clear answer yet, both models will always be present. But large companies have a challenge in their hands. If they don't allow new models to emerge internally, these will reach the market as startups. That is why there is a need to radically rethink how the markets should be approached. Also, the smartest and brightest people inside large companies are increasingly willing to leave large corporations to launch their own start-ups when the organizational structures don't accommodate their ideas.

Time to muse a bit here on this corner of the blogosphere, this corner of Switzerland. I am sitting here and pondering a few embryonic ideas for an interactive workshop at lift08. Here are some of these ideas:

- The Art of Digital Identity
- The Business of Freedom
- Speed, Time, Money and Sex (I can not be serious about this, can I?)
- Waiting for Godot on the Matrix
- What happens when a Transhumanist meets Calvin?

What do you think?
What is it that as a lift08 participant you want to spend a few hours exploring?