One of the keys to successful business model innovation is to find the hidden assumptions in your industry and then change them. When you are doing this, it is useful to remember this quote from Will Rogers:
It isn’t what we don’t know that gives us trouble, it’s what we know that ain’t so.
It used to be that everyone knew that to make any money in office equipment, you had to sell it outright and make the profit on consumables. Then Xerox showed that ain’t so – they started selling photocopiers on leases that included consumables and service, and they blew the industry wide open.
Right now, everyone knows that to make any money in automobiles, you sell those outright too. Better Place is making a bet that this ain’t so – that you can sell cars like you do mobile phones, with a low up-front costs and usage charges.
If you are trying to enter an established market, the most dangerous thing you can do is simply recycle the business model that everyone else in the industry is currently using.
You’re much better off innovating the business model. To do this, try to find the hidden assumptions. What does everyone else in the industry assume to be try that ain’t so? Change that, and you’ve got a chance.
Why should you bother with this? I’ll let Will Rogers explain that too:
Even if you are on the right track, you’ll get run over if you just sit there.
If one assumes that we leave in an eco-system that is constantly evolving, one should always be on the alert for the next thing and what the next thing could mean to an established order. Business model Innovation follows the same logic: what is the next thing and how can the next thing shape or reshape the established business model, how to embrace the ‘new thing’ instead of ‘building temporary barriers’ thus delaying the inevitable or as per Will Rogers comment ‘recycling the current business model. As part of the Deloitte growth framework, we used a technique call ‘strategic radar’ conversations. We applied it to our own business and it is quite interesting to be experiencing the process of ‘business model transformation’ from the inside, experimenting with new business model prototypes whilst extracting value from the business model of today. Better get used to it: it is messy but who wants to be the next Kodak who famously misread the digital trend!