The Ultimate Guide on Business Model Hacking · So why hack your business model? Benefits of Hacking Your Business Model Increases sales and market share through competitive offering,
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Senior leaders and stakeholders of organization who are responsible for setting business strategy or individuals in a company who are accountable to shareholders.
This is not the typical strategy guide. We designed it to convey the essentials of what you need to know, quickly, simply and in a visual format. Sanitized client examples are presented periodically. We included the latest tools1, frameworks, processes, checklists that were actually used in conducting over 1,000 successful for you to use in your organization.
What useful content is in this guide?
You can use this guide as a step-by-step guide to run a Do-It-Yourself (DYI) Business Model HackathonTM at your organization. We are standing by to assist and guide to make this successful, if you choose to reach out to us.
How can I use this guide?
Who can benefit from this guide?
1 Note that we included all standard tools, as other tools and specifically canvases are tailored for specific program and may not be useful to you
Increases sales and market share through competitive offering, improved value proposition,
and widening of addressable market and customer targeting capability
Achieves positive ROI on project (whether internally or externally) in less than 8 months, as
evident in 85% of more than 1,000 projects conducted to date
Increases revenues and margins through premium pricing in new underserved (or unserved)
markets
Deploys fast when enabled through readily available and accessible technology, leading to a
first-mover and commercial launch possible within months and not years
Turns long-term science projects into real go-to-market business strategies, ensuring both
short-term and long-term superior monetization
Potentially disrupts and introduce new products and services that in many instances achieve
extreme order of magnitude IRRs, leaving most competitors behind
Identifies “White Spaces” where competitors do not exist, enabling companies to have a first-
mover advantage so that late copycats would find it difficult to enter
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Helps your company become disruption-proof, and enable companies to thrive in good and
favorable economic times while remaining competitive during recessions8
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Mark Zuckerberg Letter to Shareholders
about the “Hacker Way”…In Facebook's regulatory filing for an initial public offering of stock, CEO Mark Zuckerberg included a letter to potential investors about
the company's thinking. Source: Facebook S1 - Page 69
…. The Hacker Way is an approach to building that
involves continuous improvement and iteration. Hackers believe that something can always be
better, and that nothing is ever complete. They just
have to go fix it — often in the face of people who
say it's impossible or are content with the status
quo….
… To encourage this approach, every
few months we have a hackathon, where everyone builds prototypes for new ideas they have. At the end, the
whole team gets together and looks at everything that has been built. Many of our most successful products came out
of hackathons, including Timeline, chat, video, our mobile development framework and some of our most
important infrastructure like the HipHop compiler. …
Business model hacking is not a new concept and can be traced to the fifteenth century, when Gutenberg sought applications for the mechanical printing device he had invented.
What is a business model you may ask? We will explain this in examples and introduce the different types of business models before we dive into the actual process.
Over the past two decades countless innovative business models emerged and in the past decade alone, entirely new industries were formed based on business model innovation as old ones crumbled.
While only 60 companies remain in the S&P500 since 1955, the speed at which new companies are replacing legacy companies is accelerating and the majority of companies to be replaced over the next decade. Therefore, it does not come a surprise that a CEOs that were surveyed by by EY last year identified the biggest threats to their organization are new business models enabled through technology.
if you don’t see the value and benefits of rethinking and evaluating your business model, you may ask yourself: How do you imagine your company’s business model should look like in the near future? How about 2, 5 or 10 years years out? Will your company be among the thriving players or trying to survive? What are your concerns for the future of your business?
Ultimately, business model hacking is about creating value, for companies, customers, and society. This guide is a step-by-step guide that will give you the ability to do it yourself. If you follow the steps outlined in the guide, you should be able to reach 1-3 initiatives and opportunities that are immediately feasible at a very low cost of entry.
Having completed over 1,000 projects to-date, we have seen 85% of organizations achieve ROI within less than 8 months on such programs, this without accounting for all the other benefits such as turning visionary ideas into game-changing business models that challenge and disrupt the establishment or rejuvenate, and with it achieve double and triple digit IRR while fueling intrinsic company value growth and shareholder return.
Typically 3-22 Weeks Depending on number of dedicated resources assigned to the project and the complexity of the company’s business model
• The aim of the work conducted during this phase is to enable and facilitate a very effective, productive and fruitful Phase II
• Development of relevant material and tools that will be a prerequisite to conduct the next phase
• A three-step process is required to complete this phase – described in detail on next page
Baseline
(1-10 weeks*)
Hackathon
(1 Week)
Development
(1-10 Weeks)
I II III
A three-phased process should be adopted when undertaking a business model hacking initiative
• To further the analysis conducted during Phase I, Phase II consists of 2-3 day sprint style hackathon that engages key stakeholders of the organization, during which opportunities are identified
• Workshop should be facilitated by the Phase I Team and should involve internal stakeholder the organization as well as external SMEs (see Methodology section)
• Shortlist and select key opportunities and phase them according to prioritized roadmap
• Design and conceptualize the priority opportunities business model
• Development of a high-level business case for selected opportunities
• Incorporate plan into corporate/company strategy
At the very least, three aspects of analysis would need to be conducted as part of the baseline and prior to a hackathon
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New
Business
Opportunities
Internal/Existing
Capabilities and
Intellectual Capital
of Company
Technology
Universe and Case
Studies
1
3
“The best way to
anticipate future trends is
to be the first to set them
yourself”
Industry and
Sector Deep-Dive and
Trend Analysis
2
• In the dynamics of this phase, it is imperative to develop an unbiased (free of cognitive biases), deep understanding of the sector and the company’s positioning within the sector as well as the competitive landscape
• A deep dive into the company’s business, the industry and the sector would help ensure that the opportunities identified are most relevant and help reduce the effort required in selection (discussed later)
• In the next few pages, we will show examples of the type of analysis that would be conducted. While we try and maintain as generic requirements as possible, the analysis required would ultimately depend on the industry and company situation
…while deep dives across the value chain can reveal business model insights
By harnessing unprecedented leverage on behalf of huge buying groups to further drive down brand
prices, top PBMs had revenues that exceeded those of the top pharmaceutical manufacturers
Source: 2017, Kevin A. Schulman, Dept of Medicine, Duke University and Harvard Business School, The Evolving Pharmaceutical Benefits Market; EGNYT analysis
In conducting case studies and reviewing the technology universe, the following checklist should be covered
qIdentify (based on previous analysis) and profile relevant case studies from the industry
qIdentify (based on previous analysis) and profile relevant case studies not from the industry, and highlight was is relevant. These cases are as important as industry relevant case studies
qFor all case studies identified, conduct analysis in line with the elements of this remainder of this checklist
qUse and leverage of accessible technology to gain competitive edge and other technologies in use
qFunding (If startup) and obtainable financials
qPrice positioning
qTargets and objective
qValue proposition by product/service offering
qOperating model
qBusiness model
qPrice positioning
qRevenue streams
qCustomer segments
qKey success factors
qProduct and service delivery models
qCustomer targeting models
qMarket share
qCompetitive positioning
qSpecial niches and brands
qProduct category and customer segmentation
qGeographical footprint
qIdentify and shortlist 5-10 case studies deep-dive and more detailed analysis along specific and relevant areas
qDerive applicable best practices and lessons learned for shortlisted case
studies
qOrganization structure and key resources
qOutsourcing strategy
qCost structure
qPartnership models
qValue chain analysis
qMarketing, sales and customer acquisition strategy
qHistory and growth ramp-up
qTransactions and valuation drivers
qFuture outlook
qLatest pitch decks and investor prospectus
qCustomer relationship and customer/market perception
qBusiness risks, threat and weaknesses
qChannels and channel building blocks
Technology and Case Studies ChecklistNON-EXHAUSTIVE