Data Insights Driven Business Model Innovation

Sights ConferenceDr. Patrick Stähler, fluidminds

Follow the white rabbit: Data Insight Driven Business Model Innovation

Who do you want to be in the data insight game? The prey or the hunter?

That’s me, Patrick Stähler, innovator by chance of the concept of business model innovation, entrepreneur, blogger, book author and digital since 1995

Something special on this picture? Who took this picture? Actually, was this picture ever taken? If not, who created it?

An algorithm from Google created automatically this picture from these originals

What do the colors mean?

Beyond optimization of the past

We have to unlearn the past and rethink our business from the customer perspective.

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Is Kodak innovative? What were the tacit assumptions behind Kodak’s innovations? Take 5 min and discuss it with your neighbors.

Take-aways are in red

Exercises and questions for you

Who knows more about temperature, humidity and pressure than anybody else in the world? But company does not even know it

Bosch is world market leader of engine control system that measures temperature, humidity, etc. However, the date is trapped in the car. However, that is changing..

2017. The German car manufacturers want to use the data from sensors to make driving safer but there are more use cases…

However, who does even know more about the world?

Connecting the dots of data. Who thought that a digital calendar is great business aka data source if connected with other data

Place

Map

Calendar

Mail

Google understood that a phone is a not a phone anymore but a location and travel sensor

Google maps is the central for mapping location-based data including real-time data of movement

Picture search allows Google to understand what is on the picture

With Google Streetviewthey even know how the streets look and even have pictures form the inside

With the existing data, they can create 3D models of the real world

What would happen if we have the real-time data from 20% of the fields?

Agricircle, a Swiss Startup founded 2012, is helping farmers to better manage their fields. It‘s state of the art for data aggregation, collection and analytics, but with little support…

Monsanto is doing it. It paid 2013 1.1bn for The Climate Corporation. In 2014, it has the data of 20% of corn and soybean acreage in the US

Pretty scary, if one company controls the seeds, the herbicide and now also the data like Monsanto

Mr Blofeld would have loved to have this information on food on his way to world domination

Data Economics have a strong tendency to natural monopolies due to network effects on the demand side and economies of scale on supply side. So there is a strong ethical side to data driven businesses

Who will go for the race of audio data? Who will understand the content of audio?

Will the hearing aid industry be the master of audio data? Currently, they just amplify audio and filter frequencies. However, they do not understand the content of audio

Or will it be Google, the master of text understanding with Google home?

Or Amazon with Amazon Echo and Alexa

The fight is who will dominate the voice interface aka voice data to the world. Amazon, Google, Microsoft or Apple?

Image you had the portfolio data from 10% of all global assets under management. What would you do?

BlackRock has the data of USD 15 trillion Assets under Management of which 10trillion are from 25.000 external portfolio managers

3.1

15

GDP Germany BlackRock Aladdin AUM

BlackRocks gets the data because it offers a superior service in providing better risk and portfolio management

data/ technology value

creates

Xenables

business model

Your data or technology does not create value. It is the business model

Erlang is a 31 year old programming language developed by Ericsson and widely used to program telco switches. However, you can do more…

Any idea for which disruptive business model Erlang was the foundation?

WhatsApp used Erlang to build its backbone messaging system. 1 bn users (2016), acquired by Facebook for 19 bn USD (2014), when it had 55 employees

Not the data/ technology itself is valuable, but what business model we can base on it is decisive for value creation

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Business Model InnovationWürth - from C-parts reseller to C-parts management for customers based on data

Value PropositionReducing the excessive procurement costs compared to C-parts value by delivering the right parts, at the right place, right time, right quantity, right quality and right price that means lower total costs of procurement

amadeus – the travel data companyAmadeus provides travel technology solutions to help travel professionals (travel agencies, hotels, airlines, airports, etc.) to serve their customers better.Originally owned by Airlines like Lufthansa Market Cap. €23 billion, 27.1% EBIT margin, Lufthansa Market cap €5.8 billion, 7.8% EBIT margin*

Business Model InnovationIt concentrates on the data about travel and has no assets in travel infrastructure like hotels, planes, etc. *2016 data, stock price per 23.June 17

Kodak invented the digital camera in 1973 …

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

…invented an app so you can seamlessly print your pictures…

So you can easily hold your pictures in your hand.

Was Kodak innovative? What were the tacit assumptions behind Kodak’s innovations?

Kodak was highly innovative, but did not understand that digital is more than product innovation.

Digital was not about the best quality that traditional customersof Kodak loved

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

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

Tradition is not a strategy.* A transfer of the current business model in the digital world is not enough

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Innovation can come with very different horizons depending on the closeness to current business and time

Value

TimeHorizon 1 extend the current business

Horizon 2Business builders develop new opportunities

Horizon 3Visionaries create viable options

1

2

3

Competition is changing. New competitors do not care for the past and compete on Horizon 2 and 3, TODAY!

Value

Time

H1

H2

H3

Value

Time

Hotels battle the data war on all 3 horizons already today

The future is today in the hotel industry driven by new-comers!

H1

H2

H3

product & process innovation are not sufficient

Innovation is not a guarantee for survival in a hypercompetitive world. The right innovation is

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You had an answer in the past, how about the future?

Why should your business exist?

The Purpose of a Company Is to Create a Customer(Peter Drucker) and not to have low costs or products nobody needs

Why should I listen to you as a customer?

Why should I engage with you as a customer?

Do you have something relevant to say?

Where do you create your WOW?

Customer job to be doneWe have to learn to unlearn.

We have to learn to see beyond the product and understand what the customer really wants.

Customer needs are to imprecise. Let’s talk about jobs-to-be-done.

Do we need trucks and truck drivers?

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

Do we need accountants?

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

Do we need taxis?

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

Beyond optimization of the past

We have to unlearn the past and rethink our business from the customer perspective

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Do we need hotels?

Or do we just need a bed like at Formule 1?

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

Customer job to be doneWe do not need a hotel. We need an accommodation plus extras like connecting to people. That are the jobs-to-be-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.

Value PropositionThe 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 lives in the city

product/services happy customers

creates

X

value proposition

solves

delivered by

business model

The customer perspective: Technology does not create value. It is the value proposition the customer loves

customer’s job-to-be-done

addressed by

Start dreaming from badly solved jobs-to-be-done of your customers. Use technology to build new business models upon and create a Wow!

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The laws of the data game:1. Understand what data you have

today2. Understand what data do you want to

have from others3. Create a value proposition that is so

convincing that customers share their data

4. Analyze the meta data and give insights and value back to your customers

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JUST DO IT.

More Information onhttp://blog.business-model-innovation.com

Dr. oec. Patrick Stählerfluidminds GmbHKreuzstrasse 2CH-8008 ZürichPatrick.Staehler@fluidminds.chwww.fluidminds.chblog.business-model-innovation.com

Slides are based on the Book „Das Richtige gründen: Werkzeugkasten für Unternehmer“

Available at any bookstore or at Amazon.de

More on blog.business-model-innovation.com

1) What data do you have in or are triggered by your company’s activities which you do not use today and which might be valuable? (10min)

2) a) What jobs can you solve with this data for your customers? b) What value can you extract from the data for your company? (totally 20 min)