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Business Model Innovation: What is it?

| On 08, Apr 2009

Rod King

Joey Bloggs was nervous. He paced the corridor as he waited for his turn. To Joey, it felt like the first time when he ventured into the ocean with his surfboard. A creative entrepreneur with big dreams, Joey was eager to pitch his business and prototype to the panel of seasoned Venture Capitalists. Joey was seeking an investment of $300,000 for his startup business in an economy plagued by global recession.


With only ten minutes to present his case, Joey focused on talking about his highly innovative ‘visual search engine’ which provides a brain-friendlier way to organize massive amounts of information. At the end of Joey’s presentation, Bob Rich, the chairman of the investment committee commented: “Joey, I’m impressed with your technology and I think that your innovation could positively change the way people organize information as well as help reduce the problem of information overload. But Joey, what is your business model? How do you intend to make money with your visual search engine?”


Joey replied, “I think my search engine is more visually appealing than Google’s. People will flock to my search engine. And we’ll make money by selling ads just like Google does.”


“Don’t you have a more innovative business model?” Bob asked.


Joey was familiar with methodologies of creative problem solving and innovation such as Lateral Thinking, TRIZ, and Value Engineering. However, Joey was struggling in coming up with ideas for developing an innovative business model for his visual search engine.


If we had access to Joey Bloggs, how would we help him? How would we help Joey innovate on his business model? How should Joey go about innovating on his business model?


——————


Hi, my name is Rod King. And I’ll be writing articles as a commentator on Real Innovation. I like collaborative approaches to creativity and innovation. And as a fan of open collaboration and “Wisdom of the Crowd,” I’d like to invite the community to contribute and join me in exploring ideas on how we can help Joey Bloggs generate ideas for an innovative business model. All ideas are welcomed.


A few points of clarification though.  Joey Bloggs and Bob Rich are figments of my imagination. The context of the above story is based on my experience as well as imagination. In short, I’ve used TRIZ Inventive Principle #5: I’ve merged bits of facts and fiction.  I just thought that the discussion would be livelier, if the topic of business model innovation is presented within the framework of a “factional” case study. I therefore look forward to hearing your feedback.


Did I mention that Joey was looking for a definition of a business model because he couldn’t find a satisfactory one? Joey’s working definition of a business model is as follows:


“A business model describes the way an enterprise functions as well as delivers on its value proposition for customers and investors.”


A wordy definition of a business model? But, what do you think?


Best, Rod.