Advanced Visual Business Modeling - or

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How to »Prototype« a Business Ecosystem?
Service Experience Camp Berlin, September
th 14

2013

n e g d e i m h c S _ n a J @

Everyone wants to become a “Platform Business”

Consumer

Business-to-Business

m e t s y s o c E s s e n i s u B ≠ s m e t s y s o c E e c i v r e S / t c u d o r P

Image Credit: © 2012 Subprint (http://subprint.com/blog/it%27s-the-ecosystem,-stupid)

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We all love the Business Model Canvas
… and it’s manifold derivates! But they all have the same problem ...

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Hardware OEM's: e.g. Foxconn

Other Stakeholders
Sponsoring / Discounts

Lowest Production Costs Manufacturing High Volume and Knowledge Planning Certainty

Service Contract Infrastructure Management IP royalties / Commission

Schools and Universities

Bulk Purchases Reputation and Awareness

Core Value Proposition
Media Delivery

Technical Backend Providers: e.g. SAP

???

Digital Sales Channel with DRM and wide Spread

Apple on Campus ??? New Business Ideas

IP royalties

Microsoft, Google, etc.

Personal Data

Price Premium (Hardware, Media and App Sales) Reputation

Apple

Comission App Purchases

Complementary Offerings
Media Industries Developer Community

Seamless User Experience

Sales Platform Technical and Sales Training

Apple Users
Enriched User Experience

Higher Margins : Apple Price Premium Broad Service Station Covering

Apple Communities

Software Developers: e.g. Adobe

Higher Margins via Apple Price Premium

Retail/Certified Partners: e.g. Gravis Official Accessory Manufacturers: e.g. Belkin

Supplying and Enabling Network

Goods & Services Money & Credits

Choices & Consequences

Activity Networks

Value Flow Mapping for Ecosystems
Information Intangible Value

Value Configuration Perspective: Chains/Shops/Networks

Tom Hulmes Canvas (IDEO)

Patrick Stählers Canvas (Fluidmind)

!

etc.
!

Other »Scientific Conceptualisations«

Fraunhofer IAO Canvas

Image Credits / Sources in order of appearance: Casadesus-Masanell, R., & Ricart, J. E. (2011). How to Design A Winning Business Model. Harvard Business Review, 89(1/2), 100–107. // Porter, M. E. (1996). What is Strategy? Harvard Business Review, (November - December). // Ouden, E. den. (2011). Innovation Design: Creating Value for People, Organizations and Society (1st ed.). Springer London. // Fjeldstad, Ø. D., & Stabell, C. B. (1998). Configuring Value for Competitive Advantage: On Chains, Shops, and Networks. Strategic Management Journal,, Vol 19, 413–437. // valuenetworksandcollaboration.com, 2011 // Tom Hulme (http://weijiblog.com/ startup-tools/) // Patrick Stähler (http://blog.business-model-innovation.com/tools/) // Johnson, M. W., Christensen, C. M., & Kagermann, H. (2008). Reinventing Your Business Model. Harvard Business Review, 86(12), 50–59. // Fraunhofer IAO (http://moby.iao.fraunhofer.de/)

Hardware OEM's: e.g. Foxconn

Other Stakeholders
Sponsoring / Discounts

Lowest Production Costs Manufacturing High Volume and Knowledge Planning Certainty

Service Contract Infrastructure Management IP royalties / Commission

Schools and Universities

Bulk Purchases Reputation and Awareness

Core Value Proposition
Media Delivery

Technical Backend Providers: e.g. SAP

???

Digital Sales Channel with DRM and wide Spread

Apple on Campus ??? New Business Ideas

IP royalties

Microsoft, Google, etc.

Personal Data

Price Premium (Hardware, Media and App Sales) Reputation

Apple

Comission App Purchases

Complementary Offerings
Media Industries Developer Community

Seamless User Experience

Sales Platform Technical and Sales Training

Apple Users
Enriched User Experience

Higher Margins : Apple Price Premium Broad Service Station Covering

Apple Communities

Software Developers: e.g. Adobe

Higher Margins via Apple Price Premium

Retail/Certified Partners: e.g. Gravis Official Accessory Manufacturers: e.g. Belkin

Supplying and Enabling Network

Goods & Services Money & Credits

Choices & Consequences

Activity Networks

Value Flow Mapping for Ecosystems
Information Intangible Value

Value Configuration Perspective: Chains/Shops/Networks

}
Systemic representations
Tom Hulmes Canvas (IDEO) Patrick Stählers Canvas (Fluidmind)
!

etc.
!

Other »Scientific Conceptualisations«

Fraunhofer IAO Canvas

Image Credits / Sources in order of appearance: Casadesus-Masanell, R., & Ricart, J. E. (2011). How to Design A Winning Business Model. Harvard Business Review, 89(1/2), 100–107. // Porter, M. E. (1996). What is Strategy? Harvard Business Review, (November - December). // Ouden, E. den. (2011). Innovation Design: Creating Value for People, Organizations and Society (1st ed.). Springer London. // Fjeldstad, Ø. D., & Stabell, C. B. (1998). Configuring Value for Competitive Advantage: On Chains, Shops, and Networks. Strategic Management Journal,, Vol 19, 413–437. // valuenetworksandcollaboration.com, 2011 // Tom Hulme (http://weijiblog.com/ startup-tools/) // Patrick Stähler (http://blog.business-model-innovation.com/tools/) // Johnson, M. W., Christensen, C. M., & Kagermann, H. (2008). Reinventing Your Business Model. Harvard Business Review, 86(12), 50–59. // Fraunhofer IAO (http://moby.iao.fraunhofer.de/)

Hardware OEM's: e.g. Foxconn

Other Stakeholders
Sponsoring / Discounts

Lowest Production Costs Manufacturing High Volume and Knowledge Planning Certainty

Service Contract Infrastructure Management IP royalties / Commission

Schools and Universities

Bulk Purchases Reputation and Awareness

Core Value Proposition
Media Delivery

Technical Backend Providers: e.g. SAP

???

Digital Sales Channel with DRM and wide Spread

Apple on Campus ??? New Business Ideas

IP royalties

Microsoft, Google, etc.

Personal Data

Price Premium (Hardware, Media and App Sales) Reputation

Apple

Comission App Purchases

Complementary Offerings
Media Industries Developer Community

Seamless User Experience

Sales Platform Technical and Sales Training

Apple Users
Enriched User Experience

Higher Margins : Apple Price Premium Broad Service Station Covering

Apple Communities

Software Developers: e.g. Adobe

Higher Margins via Apple Price Premium

Retail/Certified Partners: e.g. Gravis Official Accessory Manufacturers: e.g. Belkin

Supplying and Enabling Network

Goods & Services Money & Credits

Choices & Consequences

Activity Networks

Value Flow Mapping for Ecosystems
Information Intangible Value

Value Configuration Perspective: Chains/Shops/Networks

Tom Hulmes Canvas (IDEO)

Patrick Stählers Canvas (Fluidmind)

!

etc.
!

Other »Scientific Conceptualisations«

Fraunhofer IAO Canvas

Image Credits / Sources in order of appearance: Casadesus-Masanell, R., & Ricart, J. E. (2011). How to Design A Winning Business Model. Harvard Business Review, 89(1/2), 100–107. // Porter, M. E. (1996). What is Strategy? Harvard Business Review, (November - December). // Ouden, E. den. (2011). Innovation Design: Creating Value for People, Organizations and Society (1st ed.). Springer London. // Fjeldstad, Ø. D., & Stabell, C. B. (1998). Configuring Value for Competitive Advantage: On Chains, Shops, and Networks. Strategic Management Journal,, Vol 19, 413–437. // valuenetworksandcollaboration.com, 2011 // Tom Hulme (http://weijiblog.com/ startup-tools/) // Patrick Stähler (http://blog.business-model-innovation.com/tools/) // Johnson, M. W., Christensen, C. M., & Kagermann, H. (2008). Reinventing Your Business Model. Harvard Business Review, 86(12), 50–59. // Fraunhofer IAO (http://moby.iao.fraunhofer.de/)

Apple’s Business Ecosystem (Excerpt)
®

Other Stakeholders
Lowest Production Costs Sponsoring / Discounts High Volume and Planning Certainty Manufacturing Knowledge Service Contract Infrastructure Management IP royalties / Commission

Bulk Purchases Reputation and Awareness

Core Value Proposition
??? Media Delivery Digital Sales Channel with DRM and wide Spread

Apple on Campus ??? New Business Ideas

IP royalties Personal Data

Price Premium (Hardware, Media and App Sales) Reputation

Apple Platform

Comission App Purchases

Complementary Offerings

Seamless User Experience

Sales Platform Technical and Sales Training Higher Margins : Apple Price Premium

Enriched User Experience

Broad Service Station Covering

Higher Margins via Apple Price Premium
TM

Supplying and Enabling Network

Goods & Services Money & Credits Information Intangible Value

9

It is not like …

It is more like ...

Service Ecology Map

Value Network Analysis (VNA)

COMPANY

DATE

COMPANY

DATE

STAKEHOLDER MAPPING
WHO ARE THE STAKEHOLDERS?

VALUE NETWORK MAPPING
THE KEY RELATIONSHIPS BETWEEN STAKEHOLDERS

EXAMPLE

EXAMPLE

VALUES
MONEY LOVE ATTENTION INFORMATION POWER REPUTATION TRUST CREDITS EXPOSURE EXPERIENCE RIGHTS SERVICE PRODUCT

EXAMPLE

EXAMPLE

VALUES
MONEY LOVE POWER REPUTATION TRUST CREDITS EXPOSURE EXPERIENCE RIGHTS SERVICE PRODUCT

EXAMPLES OF STAKEHOLDER
ATTENTION
EMPLOYEES GOVERNMENT SUPPLIERS COMMUNITY
$

CREDITORS

INFORMATION
CUSTOMERS

Process Map, Net Map, Actors Map

Value Network/Ecosystem Mapping
10

Image Credit (in order of appearance): Allee, V. (2008). Value network analysis and value conversion of tangible and intangible assets. Journal of Intellectual Capital, 9(1), 5–24.; Design Thinkers Academy

Your Challenge
Ready for some action?
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Your Challenge: Call-a-Drone
Other Stakeholders

Core Value Proposition

FLY ME
TO

Just-at-time!
s l a c i t u e c a m r a h p y c emergen g n i l u d e h c s l e c r a p P 2 P last m ile par rier u o c r i a cel del ivery

pizza

Airspeed transportation: delivered to your window - when you want it and where you want it.

Image Credit: CC-licensed “Quadrocopter” from kaffeeringe → http://www.flickr.com/photos/kaffeeringe/8722017781/

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Exercise I: Collect Actors/Stakeholders

EX IS C ER E

Title/Function of Actor Compatibilty with VP (positive, neutral, negative) Influence (size of indicator)

Primary Motivations

Time Horizon (throughput time) Actors Role Investment

1 0 MI :0 NU 0 T
ES
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Exercise II: Group Actors
Other Stakeholders

EX IS C ER E

Core Value Proposition

Complementary Offerings

0 5 MI :0 NU 0 T
Supplying and Enabling Network

ES

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Exercise III: Define Value Flows

EX IS C ER E

Goods & Services Money & Credits Information Intangible Value

Goods & Services Money & Credits Information

Intangible Value

1 5 MI :0 NU 0 T
ES

Economic community supported by a foundation of interacting organizations and individuals - the 'organisms' of the business world. [...] Over time they co-evolve in their capabilities and roles, and tend to align themselves with the directions set by one or more central companies.
James F. Moore (1997)

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The Rise of Ecosystems
New Rules for Value Creation

Contemporary Understanding of Value Propositions

Value propositions should be crafted: as a reciprocal exchange of value; described in terms of perceived benefits or reduced costs; transparent about to whom that value should flow and how; perceived as a fair exchange of value; delivered over a time frame longer than a single transaction; often co-created through interaction between two or more parties; and, congruent with the relationship objectives set for a particular market.
Ballantyne, Frow, Varey & Payne (2011)

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Business Ecosystem?

“A value network model visualizes specific interactions within the network to provide a perspective for understanding value-creating roles and relationships, and to offer a dynamic view of how both financial and non-financial assets are converted into negotiable forms of value.”
Elke den Ouden, Phillips Industry Consulting (2011)

Image Credit: http://www.elkedenouden.com/AboutElke.html

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Customer

Supplier

Godfather

Competitor

Intermediary

Enabler

Financier

Provider of Content

Provider of Services

Provider of Systems

Provider of Goods

Marketing & Communications

Align and Balance Value Flows

Goods & Services Money & Credits Information Intangible Value

Goods & Services Money & Credits Information Intangible Value

Apple’s Business Ecosystem (Excerpt)
Other Stakeholders
Lowest Production Costs Sponsoring / Discounts Manufacturing High Volume Orders Knowledge and Planning Certainty Service Contract Infrastructure Management IP royalties / Commission

Hardware OEM's: e.g. Foxconn

Schools and Universities

Bulk Purchases Reputation and Awareness Content Apple on Campus ???

Core Value Proposition
??? Media Delivery

Technical Backend Providers: e.g. SAP

Digital Sales Channel with DRM and wide Spread

IT-Infrastructure Partners: e.g. Akamai

New Business Ideas

IP royalties

Microsoft, Google, etc. Premium Services/
Software Purchases

SaS Solutions

Personal Data

Price Premium (Hardware, Media and App Sales) Reputation

Apple Platform

Comission App Purchases

Complementary Offerings
Media Industries Developer Community

Seamless User Experience

Sales Platform Technical and Sales Training

Personal Data

Apple Users

Personal Data

Higher Margins : Apple Price Premium Broad Service Station Covering

Enriched User Experience

Apple Communities

Software Developers: e.g. Adobe

Higher Margins via Apple Price Premium

Retail/Certified Partners: e.g. Gravis Official Accessory Manufacturers: e.g. Belkin Inofficial Accessory Manufacturers

Supplying and Enabling Network

Goods & Services Money & Credits Information Intangible Value

Apple Store Logistic Partners: e.g. TNT, UPS

22

Layers of a Value Web
Other Stakeholders
Lowest Production Costs Sponsoring / Discounts High Volume and Planning Certainty Manufacturing Knowledge Service Contract Infrastructure Management IP royalties / Commission

Hardware OEM's: e.g. Foxconn

Schools and Universities

Bulk Purchases Reputation and Awareness

Core Value Proposition
??? Media Delivery

Technical Backend Providers: e.g. SAP

Digital Sales Channel with DRM and wide Spread

Apple on Campus ??? New Business Ideas

IP royalties

Microsoft, Google, etc.

Personal Data

Price Premium (Hardware, Media and App Sales) Reputation

Apple Platform

Comission App Purchases

Complementary Offerings
Media Industries Developer Community

Seamless User Experience

Sales Platform Technical and Sales Training

Apple Users
Enriched User Experience

Higher Margins : Apple Price Premium Broad Service Station Covering

Apple Communities

Software Developers: e.g. Adobe

Higher Margins via Apple Price Premium

Retail/Certified Partners: e.g. Gravis Official Accessory Manufacturers: e.g. Belkin

Supplying and Enabling Network

Goods & Services Money & Credits Information Intangible Value

23

Apple’s Business Ecosystem (Excerpt)
®

Other Stakeholders
Lowest Production Costs Sponsoring / Discounts High Volume and Planning Certainty Manufacturing Knowledge Service Contract Infrastructure Management IP royalties / Commission

Bulk Purchases Reputation and Awareness

Core Value Proposition
??? Media Delivery Digital Sales Channel with DRM and wide Spread

Apple on Campus ??? New Business Ideas

IP royalties Personal Data

Price Premium (Hardware, Media and App Sales) Reputation

Apple Platform

Comission App Purchases

Complementary Offerings

Seamless User Experience

Sales Platform Technical and Sales Training Higher Margins : Apple Price Premium

Enriched User Experience

Broad Service Station Covering

Higher Margins via Apple Price Premium
TM

Supplying and Enabling Network

Goods & Services Money & Credits Information Intangible Value

24

Virtuous Cycles
Hardware OEM's: e.g. Foxconn

Lowest Production Costs Sponsoring / Discounts Manufacturing High Volume Orders Knowledge and Planning Certainty

Service Contract Infrastructure Management IP royalties / Commission

Schools and Universities

Technical Backend Providers: e.g. SAP

Bulk Purchases Reputation and Awareness Content Apple on Campus ??? New Business Ideas

??? Media Delivery

Digital Sales Channel with DRM and wide Spread

IT-Infrastructure Partners: e.g. Akama

IP royalties

Microsoft, Google, etc. Premium Services/
Software Purchases

SaS Solutions

Personal Data

Price Premium (Hardware, Media and App Sales) Reputation

Apple Platform

Comission App Purchases

Media Industries Developer Community

Seamless User Experience

Sales Platform Technical and Sales Training

Personal Data

Apple Users

Personal Data

Higher Margins : Apple Price Premium Broad Service Station Covering

Enriched User Experience

Apple Communities

Software Developers: e.g. Adobe

Higher Margins via Apple Price Premium

Retail/Certified Partners: e.g. Gravis Official Accessory Manufacturers: e.g. Belkin Inofficial Accessory Manufacturers Apple Store Logistic Partners: e.g. TNT, UPS

Goods & Services Money & Credits Information Intangible Value

25

Virtuous Cycles
Lowest Production Costs Manufacturing High Volume Orders Knowledge and Planning Certainty Service Contract Infrastructure Management

Hardware OEM's: e.g. Foxconn

ponsoring / Discounts

IP royalties / Commission

Bulk Purchases Reputation and Awareness Content Apple on Campus ??? New Business Ideas

??? Media Delivery

Digital Sales Channel DRM and wide Spre

IP royalties SaS Solutions Personal Data

Price Premium (Hardware, Media and App Sales) Reputation

Apple Platform

Comission App Purchases

ices/ hases

Seamless User Experience

Sales Platform Technical and Sales Training

Personal Data

Developer Community

Apple Users

Personal Data

Higher Margins : Apple Price Premium Broad Service Station Covering

Enriched User Experience

26

Virtuous Cycles
Lowest Production Costs Manufacturing High Volume Orders Knowledge and Planning Certainty Service Contract Infrastructure Management

Hardware OEM's: e.g. Foxconn

ponsoring / Discounts

Value of the core offer

IP royalties / Commission

Bulk Purchases Reputation and Awareness Content Apple on Campus ???

Sales Value of the total offer Investment in the core innovation and capacity
Apple Platform Investment in
Media Delivery

???

Digital Sales Channel DRM and wide Spre

New Business Ideas Comission App Purchases

Profits

IP royalties SaS Solutions Personal Data

Price Premium (Hardware, Media and App Sales) Reputation

the business ecosystem

ices/ hases

Personal Data

Generic virtuous loop ofTechnical a business ecosystem and
Sales Training Personal Data Higher Margins : Apple Price Premium Broad Service Station Covering

Seamless User Experience

Sales Platform

Developer Community

Apple Users

Enriched User Experience

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Value Flow Mapping in the Design Process
Abstract: Modeled World
PRINCIPLES

5 2
Analysis (Think)
OBSERVATIONS

6
PLANS

3 7 4

Synthesis (Make)

1

TESTS

Concrete: Real World

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Q&A /// Feedback

STAY TUNED!

@Jan_Sc hmiedge n

www.uservalue.de
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Attributions “Gears” symbol by Dima Yagnyuk // "Type Desgin" symbol by Andrew J. Young // “Compass” symbol by Adam Whitcroft // “Refresh” symbol by Joris Hoogendoorn // “Pointer” symbol by ___Lo // “Speaker” symbol by Harold Kim // “Book” symbol by Ahmed Hamzawy // “Unlock” symbol by Ugur Akdemir // “Heart” symbol by John Caserta // “Like” symbol by Marwa Boukarim // “Letter” symbol by John Caserta // “Lock” symbol by Dave Tappy // “Cess” symbol by Alessandro Suraci // “Social Services” by Jack Biesek, Gladys Brenner, Margaret Faye, Healther Merrifield, Kate Keating, Wendy Olmstead, Todd Pierce, Jamie Cowgill, Jim Bolek // “Building” symbol by Antonis Makriyannis // “Brain” symbol by Arjun Adamson // “Building Block” symbol by Michael Rowe // “City” by inna belenkey // “Basket” symbol by Roman J. Sokolov // “Unlock” symbol by Ugur Akdemir // “Hand” symbol by Jakob Vogel as well as "Home" and "Umbrella" from The Noun Project collection. -----------------------------------------------------------------------------------------------------------------------------------------------------------Some References this Workshop/Presentation was based on: Adner, R. Amazon vs. Apple: Competing Ecosystem Strategies. Harvard Business Review. Retrieved August 11, 2013, from http://blogs.hbr.org/cs/2012/03/amazon_vs_apple_competing_ecos.html. Brandenburger, A., & Nalebuff, B. (1996). Co-Opetition. New York: Doubleday. Caulfield, B. Apple’s Ecosystem. Forbes. Retrieved August 11, 2013, from http://www.forbes.com/2010/02/09/intel-nvidia-htc-technology-business-intelligence-apple.html. Dachis, J. Apple, a Love Note: The Power of an Ecosystem - Dachis Group. Dachis Group. Retrieved August 11, 2013, from http://dachisgroup.com/2010/01/apple-a-love-note-the-power-of-an-ecosystem/. McCann, J. It’s The Ecosystem, Stupid. subPrint Interactive. Blog, . Retrieved August 11, 2013, from http://subprint.com. Moore, J. F. (1997). The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems. New York: HarperBusiness. Moore, J. F. (2013). Shared Purpose: A thousand Business Ecosystems, a connected Community, and the Future. Ng, I. C. (2012). Value & Worth: Creating New Markets in the Digital Economy. Ng, I. C. L., & Smith, L. A. (2012). An Integrative Framework of Value. Review of Marketing Research, 9, 207–243. Ouden, E. den. (2011). Innovation Design: Creating Value for People, Organizations and Society (1st Edition.). Springer London. Senge, P. M. (2006). The Fifth Discipline: The Art and Practice of the Learning Organization. New York: Doubleday/Currency. and many more …

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About me …
I am a Berlin-based innovation facilitator who helps organizations in strategically implementing service design, business model innovation and (branded) Ux methodologies, processes and tools. My work is mainly based on the discovery of shared value which I researched at Berlin University of Arts and Zeppelin University Friedrichshafen. Besides my advisory practice I am a »HPDTRP« research fellow at the Hasso-Plattner-Institute Potsdam, examining Design Thinkings level of diffusion in organizations worldwide. I’m also co-developing GlobalWasteIdeas.org, an ideasharing and collective intelligence platform dedicated to catalyze innovative ways to deal with waste. @Jan_Schmiedgen
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Design-driven strategic business planning
Jan Schmiedgen // Fidicinstr. 41 // 10965 Berlin // GERMANY // +49 173 3 83 15 26 // kontakt@schmiedgen.eu

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