Business Model Generation by Alexander Osterwalder & Yves Pigneur

Author:Alexander Osterwalder & Yves Pigneur [Alexander Osterwalder]
Language: eng
Format: epub
Tags: Business
Publisher: John Wiley & Sons
Published: 2012-08-07T04:00:00+00:00

Where do you want to be? At the top of the game, because you’ve taken the time to prototype powerful new business models? Or on the sidelines, because you were too busy sustaining your existing model? We’re convinced that new, game-changing business models emerge from deep and relentless inquiry.

Design Attitude

“If you freeze an idea too quickly, you fall in love with it. If you refine it too quickly, you become attached to it and it becomes very hard to keep exploring, to keep looking for better. The crudeness of the early models in particular is very deliberate.”

Jim Glymph, Gehry Partners

As businesspeople, when we see a prototype we tend to focus on its physical form or its representation, viewing it as something that models, or encapsulates the essence of, what we eventually intend to do. We perceive a prototype as something that simply needs to be refined. In the design profession, prototypes do play a role in pre-implementation visualization and testing. But they also play another very important role: that of a tool of inquiry. In this sense they serve as thinking aids for exploring new possibilities. They help us develop a better understanding of what could be.

This same design attitude can be applied to business model innovation. By making a prototype of a business model we can explore particular aspects of an idea: novel Revenue Streams, for example. Participants learn about the elements of a prototype as they construct and discuss it. As previously discussed , business model prototypes vary in terms of scale and level of refinement. We believe it is important to think through a number of basic business model possibilities before developing a business case for a specific model. This spirit of inquiry is called design attitude, because it is so central to the design professions, as Professor Boland discovered. The attributes of design attitude include a willingness to explore crude ideas, rapidly discard them, then take the time to examine multiple possibilities before choosing to refine a few—and accepting uncertainty until a design direction matures. These things don’t come naturally to businesspeople, but they are requirements for generating new business models. Design attitude demands changing one’s orientation from making decisions to creating options from which to choose.

Prototypes at Different Scales

In architecture or product design, it is easy to understand what is meant by prototyping at different scales, because we are talking about physical artifacts. Architect Frank Gehry and product designer Philippe Starck construct countless prototypes during a project, ranging from sketches and rough models to elaborate, full-featured prototypes. We can apply the same scale and size variations when prototyping business models, but in a more conceptual way. A business model prototype can be anything from a rough sketch of an idea on a napkin to a detailed Business Model Canvas to a field-testable business model. You may wonder how all of this is any different from simply sketching out business ideas, something any businessperson or entrepreneur does. Why do we need to call it “prototyping”?

There are two answers.

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