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Business Model Innovation

By on 3rd March 2022

I have been following how ‘business design’ is becoming part of the toolkit of digital and service designers. At the heart of any sustainable business is a profitable business model. Business model innovation goes hand in hand with product innovation. Understanding business model archetypes, the profitability of each, and how components can be recombined to create new business models is a fascinating area of study.

From The Business Model Navigator:

Tomorrow’s competitive advantage companies will not be based on innovative products and processes, but on innovative business models.

Elements of a business model

  • The customer: Who are the target customers?
  • The value proposition: What is offered to customers?
  • The value chain: How is the offering made?
  • The profit mechanism: Why does it generate a profit (why does it work commercially?)

As a rule of thumb, business model innovation differs from product or process innovation in that it significantly affects at least two of the four components of the who-what-how-why of a business model.

Challenges of business model innovation

Michael Porter’s ‘Five Forces’, the traditional way of thinking:

‘Blue Ocean Strategy’ approach to beat the competition by not competing directly with them.

The Business Model Navigator identified three reasons why companies struggle with business model innovation:

  1. Thinking outside the dominant industry logic.
  2. The difficulty in thinking in terms of business models rather than technologies and products.
  3. The lack of systematic tools.

Innovation is not a chaotic process but like any other discipline it needs methods and tools. This is where business model innovation comes in.

Radical Mycology

By on 3rd March 2022

I really enjoyed Entangled Life by Merlin Sheldrake. The chapter Radical Mycology really jumped out at me. There is so much in it that I’d like to follow up on that I decided to pull out some points here. In no specific order.

What I find interesting is the role fungi plays in breaking down and building structures. With potential to disrupt polluting industries in both waste and manufacturing.

The potential of Mycology to help address the challenges we face

It is not great surprise that the mess humans have made might look like an opportunity from a fungal perspective. Fungi have persisted through Earth’s five major extinction events, each of which eliminated between seventy-five and ninety-five percent of species on the planet. Some fungi even thrived during these calamitous episodes.

The inefficiency of many industries is a blessing to mushroom growers. Agriculture is particularly wasteful: Palm and coconut oil plantations discard ninety-five percent of the total biomass produced.

https://embed.ted.com/talks/lang/en/paul_stamets_6_ways_mushrooms_can_save_the_world

Mycelium Running: How Mushrooms Can Help Save the World

DIY Mycology

Today, after a long period of specialization and profesionalization, there is an explosion of new ways of doing science. “Citizen science projects”, along with “hackerspaces” have grown increasingly popular since the 1990s, providing opportunities for dedicated nonspecialists to carry out research projects.

  • Peter McCoy: Radical Mycology – develop fungal solutions to the many technological and ecological problems we face.
  • Mycologos: online mycology school – Knowledge about fungi is often inaccessible and hard to understand.
  • Mycotopia mushroom growing forum.

Mycofabrication and mycoremediation

Whereas mycoremediation is all about decomposing the consequences of our actions, ‘mycofabrication’ is all about recomposing the types of material we choose to use in the first place.

Around the world, the idea that fungi can be used to build things as well as break them down is starting to catch on. A material made from the outer layers of portobello mushrooms shows promise in replacing graphite in lithium batteries. The mycelium of some species makes an effective skin substitute, used by surgeons to help wounds to heal. And in the United States, a company called Ecovative Design is growing building materials out of mycelium.

There are people and organizations licensed to use Ecovative’s Grow It Yourself (GIY) kits in thirty-one countries, producing everything from furniture to surfboards.

Neglected megascience

In 2009, the mycologist David Hawksworth referred to mycology as a “neglected megascience.”

I studied biochemstry and genetics, also a semester in microbiology, but don’t recall much contact with mycology, especially the practical applications of it. I’m keen to create a container where I can learn more about mycology. Especially the potential for co-design and business building in how we live and address the challenges facing us.

Parallel diversity as a problem solving method

By on 3rd March 2022

Dave Snowden talks about trios, a concept similar to pair programming where a small diverse team of three people explore ideas and make prototypes. A trio links roles in inter-threaded patterns to see what is possible. The trio needs to have diversity across specialisms and generations to increase the likelihood of novel ideas.

The idea is to have 15 – 20 trios working in parallel. The outcomes are then sorted and selected and put into a traditional design process (the example used in the talk is software design). The approach differs from a traditional consulting project where a small team of experts create prototypes within tight project plans. For the right problem it may make sense to have many people tackling the issue, but you would need willing clients to go with this approach. Nonetheless I’m becoming more interested in distributed problem solving vs. expert problem solving.

The topic is introduced at 25:13.

Revisiting JTBD

By on 23rd April 2021

Demand Side Sales by Bob Moesta is a great JTBD refresher. Traditionally businesses focus on product features, continually pushing new features to customers, this is supply-side thinking where the focus is on the product or service and its features and benefits. The flip-side is demand-side thinking where the focus is on understanding the buyer and user and what they are struggling with. Demand is created for a solution once you understand the struggling moment, that which is holding someone back from making progress. The central idea behind JTBD is that people hire solutions that solve their struggling moment.

The frameworks for demand-side selling:

  1. Three sources of energy or motivation.
  2. Four forces of progress.
  3. JBTD timeline.

Three sources of energy

  1. Functional motivation: how difficult is the process–time, effort, speed
  2. Emotional motivation: what internal emotions is driving–positive and negative
  3. Social motivation: how do other people think and feel–this is a very strong motivator to drive change

Four sources of progress

  1. Push of the situation: the reason why change is necessary
  2. Magnetism of the new solution: the realization that something better may solve the problem
  3. Anxiety of the new solution: anxiety for change–how complicated is the change, and will it really bring a benefit
  4. Habit of the present: you have learned to live with it, so why change now

The push of the situation and the magnetism of the new solution need to be stronger than their anxieties and habits before they will buy.

JTBD timeline

Through the years we’ve uncovered the six stages a buyer must walk through before making a purchase:

  1. First thought
  2. Passive looking
  3. Active looking
  4. Deciding
  5. Onboarding
  6. Ongoing use

…it all starts with understanding the customer’s JTBD, the triggers, and the micro-progress at each phase in the customer’s timeline.

Competing Against Luck: The Story of Innovation and Customer Choice is another great read on JTBD. My favorite take away from the book is the idea of focusing less on what your competitors are doing, instead relentlessly focusing on understanding what your customers are struggling with, and using the insight to drive innovation. In this way is is hard for competitors to copy you, because they lack the deep insight into your customers’ struggling moments.

Category Design

By on 7th August 2020

Increased choice among goods and services may contribute little or nothing to the kind of freedom that counts. Indeed, it may impair freedom by taking time and energy we’d be better off devoting to other matters.

Barry Schwartz The Paradox of Choice

Putting things swiftly in categories is a quirk of our minds to deal with complexity.

Our brains are governed by more that fifty different cognitive biases that push us toward decisions based not on facts and logic. It’s a shortcut system in our brain–a way to make decisions faster and easier, especially when overwhelmed by too much information.

Play Bigger: How Rebels and Innovators Create New Categories and dominate Markets

Category design is the mindful creation and development of a new market category, designed so the category will pull in customers who will then make the company its king.

Defining a new category, designing it will increase your chances of success. This includes defining and marketing the problem, then you can help people understand that you are best placed to solve the problem better than anyone else.
This is not about first mover advantage. This is about making it easy for customers to understand the category of problem that you are solving. If done successfully customers will come to associate you with the category, then due to our cognitive biases, it becomes very hard for competitors to replace you.