Standing still is not an option as the rate of change of business increases so must your business models. Your business model is the system that enables your company to grow and profit sustainably. As the business environment, trends and competitors evolve business model innovation must be one of your core competencies to maintain the firm profitable and sustainable.
As new market trends drive your business, your team should be experimenting with new business ideas and concepts to explore different scenarios in a risk free environment prior to putting them in practice. You will never release your latest product in the market without any type of testing, nor will you believe that last year’s product will serve your customer forever. So why do we accept that the current business model does not require change or innovation?
The objective of business model prototyping is to explore the consequences of a new or alternative business model before implementing them in practice. Different techniques such as storytelling, game playing, visual modeling and business model simulation can be used test the different options.
We use a simple 3-step process to design and prototype business models.
- Map Current Business Model
We usually start by mapping our current state business model. There are multiple tools to map business models. We use Alex Osterwalder, business model canvas. The canvas allows us to visualize the business model, identifying segmentation, value proposition and how we capture value, and its cost structure, etc. in a simple visual instrument.
- New Value Creation Choices
Once we have built a basic model, we should identify new value creation choices. We could identify innovative and breakthrough business models in other industries. Exploring different successful models will help identify new choices, such as new value proposition, segmentation, channels, partnerships, revenue streams, etc. to innovate our model.
- Test and Learn
With the new choices sketched on the business model prototype, we must validate these choices. Talking to prospective customers and testing how the business model solves their problem and how they perceive your value proposition allows you to fine-tune the model. Test you model hypothesis quickly to learn and adapt your business model to create value for you firm while solving the customer pains.
By continuously prototyping your business model, it will mature helping your company capture more value and potentially help you develop a unique breakthrough business model in your industry.
Technology & Business Innovation
Tel: +1 248.924.5436