Business with a purpose: Building sustainable business models

• 1. What is the purpose of a business?Dr. Patrick Sthler | 1

2. Businesses with a purposeBuilding sustainable business modelsOIKOS Conference, St. GallenDecember 2nd, 2010Dr. oec. Patrick SthlerPartner fluidminds GmbH 3. Business is seen as theopposite of not-for-profit non-profit for profit Source: Inspired by Alexander Osterwalders presentation: BusinessDr. Patrick Sthler | 3models beyond profits 4. Lets look at the impact Sustainability& sustainability:& ImpactThe traditional view+old schoolnon-profitdo-gooders non-profitfor profit old school companiesSource: Inspired by AlexanderOsterwalders presentation: BusinessDr. Patrick Sthler | 4 models beyond profits 5. How Can you call aidto Africa aid if after50 years of aid, Africais still dependenton aid?Mathematician, Ph.D. from CameroonDr. Patrick Sthler | 5 6. Business Models with a Sustainabilitypurpose: Profit && ImpactImpact & Sustainability +old school Business Modelsnon-profit with a purposedo-gooders non-profitfor profit old school companiesSource: Inspired by AlexanderOsterwalders presentation: BusinessDr. Patrick Sthler | 6 models beyond profits 7. Self-help, self-responsibilityand self-administrationthe basic idea of Friedrich Wilhelm Raiffeisen &Hermann Schulze-Delitzsch: Founder of thecooperative movement in Germany in the mid1850sCooperative banks for low-priced loans andadvantageous investment opportunities forfarmers to enable farmers to purchase agriculturalequipment, fertilizers and livestock.The members then provided each other withmutual assistance.Dr. Patrick Sthler | 7 8. Micro creditsHelp for Self-help:the basic idea of Muhammad YunusYunus set up the Grameen Bank in 1976 togive credit to the very poorest in his country,particularly women, in order to let them setup tiny businesses without collateral. Themembers then provided each other withmutual assistance.Dr. Patrick Sthler | 8 9. What types ofinnovation are there? 10. Technological Innovation 11. Process Innovation 12. Process Innovation 13. Product Innovation 14. Business ModelInnovation 15. Customer utility customer + value price company + profit costsDr. Patrick Sthler | 16 16. Well, I know we are in a commodity market where the price is key, but I believe we can sell the good for 10x as much as before.Dr. Patrick Sthler | 17 17. Dr. Patrick Sthler | 18 18. The importanceTransistor was invented at of business the end of the 1940s model thinkingDr. Patrick Sthler | 19 19. But SONY made in 1955 a successful product out of the transistor and developed a successful business model out of it for the next 50 years.Dr. Patrick Sthler | 20 20. Do you know this man?Hans Rausing = Inventor ofthe Tetra Pack SystemsDr. Patrick Sthler | 21 21. He could have sold his packaging machines, butDr. Patrick Sthler | 22 22. But he sold packagedservicesDr. Patrick Sthler | 23 23. Which innovation expanded the global addressable market for mobile communication the most?* *After the invention of mobile telefony itselfDr. Patrick Sthler | 24 24. Which innovation made this possible?Dr. Patrick Sthler | 25 25. PrepaidDr. Patrick Sthler | 26 26. Business Modelinnovation Beats Technology Beats Product Beats Process 27. Dr. Patrick Sthler | 28 28. The business model creates value not technology or a product itselftechnology X value / utility creates enablesbusiness model defines business strategy 29. To develop a business model with apurpose, isTo Do the rightthings And not todo things right 30. What is a business model?Dr. Patrick Sthler | 31 31. The business model is theDNA of your businessDr. Patrick Sthler | 32 32. The business model givesmeaning to youremployees and customersDr. Patrick Sthler | 33 33. Mountain Rescue in the Swiss Alps by volunteers the basic idea behind alpinerettung Schweiz Volunteers from the Swiss Alpine Club and the REGA (Swiss Air Rescue) are responsible for rescue in the Swiss alps. The operation are financed by patrons or members of the clubs in exchange of free services Highly professional non-profit organization also on the revenue sideDr. Patrick Sthler | 34 34. The purpose of a business is to create customers. Peter DruckerDr. Patrick Sthler | 35 35. To refresh the worldDr. Patrick Sthler | 36 36. To put a computer on every desk and in every homeDr. Patrick Sthler | 37 37. To organize the worlds information and make it universally accessibleDr. Patrick Sthler | 38 38. Contribution based on sales support cultural & social purposes the idea behind Migros Culture Percentage Migros, the largest Swiss retailer, is organized as a cooperative that bans alcohol and tobacco from its product range A share of its revenues are devoted to social or cultural projects Migros runs Migros Klubschule (Migros Club School) with 500.000 people attending trainings every year Migros is runs the language school Eurocentres with 13.000 students a year in 8 languages and 30 locationsDr. Patrick Sthler | 39 39. 1. What value/ benefit do we create for whom?2. How do we do it?3. How do we earn money?Dr. Patrick Sthler | 40 40. Now, we need a common language for describing a business modelDr. Patrick Sthler | 41 41. Components of abusiness model Value Proposition What value or benfit do we create for our customers and partners? Value Architecture How do we create the value? Revenue Model How and with what do we earn money?Dr. Patrick Sthler | 42 42. What industryare we in?Who are ourcompetitors? Dr. Patrick Sthler | 43 43. In whichindustry arewe in? Dr. Patrick Sthler | 44 44. That was the jobthe customerwanted to do.Dr. Patrick Sthler | 45 45. Value Proposition/ customerWertschpfungsarchitekturcustomers Value Proposition/ Kunden AngebotDistributionskanle Kunden Wie sieht mein WhoWie erreicht dasare ourWer ist mein Angebot aus?Angebot meine Kunde?customers? Kunden? Welchen JobWhat job do we solve bernehme ich fr meinen Kunden?Wertschpfungskette for our customers? Was sind die Kunden wichtigsten Schritte Aktivitt 1 Aktivitt 2 Aktivitt 3Aktivitt 4Aktivitt 1 Nutzen der Welchen Nutzen Wertschpfung? stifte ich fr meinenvalue propositionKunden? KernfhigkeitenPartner Welchen Nutzen WelcheWhat value do weWelche Partner stifte ich fr meine Kernfhigkeitenbentige ich?Partner? brauche ich?create for our customers? What value do weErtragsmodell Kostenstruktur Ertragsquellen create for our Die Kostenstruktur wird Womit verdiene ich durch die partners? Geld? Wertschpfungs- architektur festgelegt.Kultur/ WerteFhrungsstilBeziehungskultur WerthaltungWelchen Fhrungsstil Wie gehen wirWelche Werte prgenpflege ich?miteinander um?uns? Dr. Patrick Sthler | 46 46. Wertschpfungsarchitektur Value architectureValue Proposition/ KundenAngebot Distributionskanle Kunden Wie sieht mein offerWie erreicht das distribution architecture mein Wer ist Angebot aus? Angebot meine Kunde? What is ourKunden?How do we reachWelchen Job ourbernehme ich fr offering? customers? meinen Kunden?WertschpfungsketteHow do we Was sind diecommunicate with our Kunden wichtigsten Schritte Aktivitt 1 Aktivitt 2 Aktivitt 3Aktivitt 4 customers?Aktivitt 1Nutzen dervalue chainWelchen Nutzen Wertschpfung?stifte ich fr meinen What areKernfhigkeitenour valuePartnercustoKunden?activitactivit activit activitmer Welchen Nutzen Welche creating steps? Welche Partnery 2 y1 y3y4 activitstifte ich fr meine Kernfhigkeiten is our value bentige ich?y Partner? What brauche ich? chain?core capabilitiespartnerErtragsmodellKostenstrukturErtragsquellen What are theKostenstruktur wirdDie core Which partners do ich Womit verdiene capabilities wediedurchWertschpfungs-we need?Geld? need?architektur festgelegt.Kultur/ WerteFhrungsstilBeziehungskulturWerthaltung Welchen FhrungsstilWie gehen wirWelche Werte prgen pflege ich? miteinander um?uns? 47. Wertschpfungsarchitektur Value Proposition/ Kunden Angebot DistributionskanleKunden Wie sieht meinWie erreicht dasWer ist meinRevenue model Angebot aus?Angebot meine Kunde? Kunden? Welchen Job< bernehme ich frcost structuresources of revenue meinen Kunden?Wertschpfungskette Cost structure is With what do we Was sind dieKostenstrukturdefined by the valueAktivitt 3 ErtragsquellenErtragsmodell wichtigsten Schritte Aktivitt 1 Aktivitt 2Aktivitt 4 KundenAktivitt 1 earn money? Nutzenarchitecture der Wertschpfung?Die Womit Welchen Nutzenstifte ich fr meinen KernfhigkeitenKostenstrukt PartnerverdieneKunden?Welchen Nutzen Welche ur wirdFhrungsstil Welche Partner ich Geld?ich fr meine Beziehungskultur stifte Werthaltung Kernfhigkeiten bentige ich?Partner? brauche ich? durch dieWertschpfungs-architekturfestgelegt.Kultur/ WerteWelchenWie gehen Welche Dr. Patrick Sthler | 48Fhrungsswir Wertetil pflege miteinandeprgen 48. What business are we in? Our business modelValue architecture Value Proposition/ customerofferdistribution architecture customers What is our How do we reach ourWho are our offering? customers? customers?What job do wesolve for ourcustomers?value chain What are our value creating steps? value proposition customer activity 1 activity 2 activity 3 activity 4 What is our valueactivityWhat value do we chain?create for ourcustomers?core capabilities partnerWhat value do we What are the core Which partners docreate for our capabilities we we need? partners? need?Revenue model cost structure sources of revenue Cost structure is defined With what do we by the value architecture earn money?Culture/ values leadership stylerelationship style valuesWhat leadership styleHow do we interactWhat values do wedo we have?with each other and pursue? the customer? 49. What business are we in? Our business modelValue architecture Value Proposition/ customerofferdistribution architecture customers What is our How do we reach ourWho are our offering? customers? customers?What job do wesolve for ourcustomers?value chain What are our value creating steps? value proposition customer activity 1 activity 2 activity 3 activity 4 What is our valueactivityWhat value do we chain?create for ourcustomers?core capabilities partnerWhat value do we What are the core Which partners docreate for our capabilities we we need? partners? need?Revenue model cost structure sources of revenue Cost structure is defined With what do we by the value architecture < earn money?Culture/ values leadership stylerelationship style valuesWhat leadership styleHow do we interactWhat values do wedo we have?with each other and pursue? the customer? 50. Everybody wants to be innovativ: But what is an innovation? 51. 80 devices in GermanyDr. Patrick Sthler | 52 52. 1 deviceDr. Patrick Sthler | 53 53. Innovation is all aboutbeing different 54. But if everybody is doinghe same, you have to findsomething else 55. Optimal is when differentbusiness models existsand all have devotedcustomers 56. How do I do this?Dr. Patrick Sthler | 57 57. If you are in a market forgiants... 58. .. and you play with theirrules you will getnowhere 59. but if you can create your own rules of engagement than you can compete even in a market for giants. 60. Business model innovation1. Value Innovation (We offer a better value proposition for an existing or new problem)2. Architectural innovation (We reconfigure the value chain so that a better value proposition emerges)3. Revenue model innovation (We change the revenue mix and thereby creating a better value proposition) 61. Fight eye diseases in India with mass production processes for low costs the basic idea behind Aravind Eye Hospitals The network of not-for-profit hospitals and vision centers performs 300,000 eye surgeries each year -- 70% for free -- using broadband connections to on-call doctors in city hospitals for instant diagnosis. Camps in rural areas screen thousands of patients weekly. "We are going from village to village to provide eye care to the unreached," says Aravinds chairman, Dr. P. Namperumalsamy. Aravind won the 2008 Gates Award for Global Health.Dr. Patrick Sthler | 62 62. A deliberate change of a business model is a good strategyStarting points ofbusiness modelinnovationAll components of a businessmodel are starting points forinnovationValue InnovationArchitectural InnovationRevenue Model InnovationAt the end, all business modelinnovation must create morevalue to the customers Dr. Patrick Sthler | 63 63. The fluidminds way of business model innovationUnderstandUnlearn & mobilize Ideate Find customer insights Unveil tacit assumptions Generate via jobs-to-be-doneabout the industry value ideas Describe current Create discomfort with architectural ideas business model current situation revenue ideas Understand market trendsDesignSelect & Prototype Build & Learn Design new business Select business models Execute business model models Prototype & customer Gather customer Check interdependen- Development feedback & data cies in business model Write Business Case Adapt business model Select new businessmodel 64. The peepoo bag. Short brainstorming what business models are possible? peepoo bag is a single-use, self- sanatising toilet bagsSource: Idea taken from AlexanderOsterwalderDr. Patrick Sthler | 65 65. Dr. Patrick Sthler | 66 66. Dr. Patrick Sthler | 67 67. Business Model Innovation is an analyticaland creative process. There is a reasonwhy God gave us two brain spheres. 68. Weitere Informationenhttp://blog.business-model-http://blog.business-model-innovation.comDr. oec. Patrick Sthlerfluidminds GmbHSeefeldstrasse 5aCH-8008 ZrichPatrick.Staehler@fluidminds.chwww.fluidminds.chblog.business-model-innovation.com