What is the purpose of a business? If you think it is earning money, think again. Where is the money coming from? The money comes from paying customers and therefore the main task of a company is to create customers as Peter Drucker once said.

1. What is the
purpose of
a business?
Dr. Patrick Stähler | 1

2. Businesses with a purpose
Building sustainable business models
OIKOS Conference, St. Gallen
December 2nd, 2010
Dr. oec. Patrick Stähler
Partner fluidminds GmbH

3. Business is seen as the
opposite of not-for-profit
non-profit for profit
Source: Inspired by Alexander
Osterwalder’s presentation: Business
Dr. Patrick Stähler | 3 models beyond profits

4. Let’s look at the impact Sustainability
& sustainability: & Impact
The traditional view +
old school
non-profit
do-gooders
non-profit for profit
old school
companies
Source: Inspired by Alexander
Osterwalder’s presentation: Business
Dr. Patrick Stähler | 4 models beyond profits

5. How Can you call aid
to Africa aid if after
50 years of “aid”, Africa
is still dependent
on aid?
Mathematician, Ph.D. from Cameroon
Dr. Patrick Stähler | 5

6. Business Models with a Sustainability
purpose: Profit & & Impact
Impact & Sustainability +
old school Business Models
non-profit with a purpose
do-gooders
non-profit for profit
old school
companies
Source: Inspired by Alexander
Osterwalder’s presentation: Business
Dr. Patrick Stähler | 6 models beyond profits

7. Self-help, self-responsibility
and self-administration
the basic idea of Friedrich Wilhelm Raiffeisen &
Hermann Schulze-Delitzsch: Founder of the
cooperative movement in Germany in the mid
1850s
Cooperative banks for low-priced loans and
advantageous investment opportunities for
farmers to enable farmers to purchase agricultural
equipment, fertilizers and livestock.
The members then provided each other with
mutual assistance.
Dr. Patrick Stähler | 7

8. Micro credits
Help for Self-help:
the basic idea of Muhammad Yunus
Yunus set up the Grameen Bank in 1976 to
give credit to the very poorest in his country,
particularly women, in order to let them set
up tiny businesses without collateral. The
members then provided each other with
mutual assistance.
Dr. Patrick Stähler | 8

9. «What types of
innovation are
there?»

10. Technological Innovation

11. Process Innovation

12. Process Innovation

13. Product Innovation

15. Business Model
Innovation

16. Customer
utility
customer
+ value
price
company
+ profit
costs
Dr. Patrick Stähler | 16

17. “Well, I know we are in a
commodity market where
the price is key, but I believe
we can sell the good for 10x
as much as before.”
Dr. Patrick Stähler | 17

18. Dr. Patrick Stähler | 18

19. The importance Transistor was invented at
of business the end of the 1940s
model thinking
Dr. Patrick Stähler | 19

20. But SONY made in 1955 a
successful product out of the
transistor and developed a
successful business model out
of it for the next 50 years.
Dr. Patrick Stähler | 20

21. Do you know this man?
Hans Rausing = Inventor of
the Tetra Pack Systems
Dr. Patrick Stähler | 21

22. He could have sold his
packaging machines,
but…
Dr. Patrick Stähler | 22

23. But he sold packaged
services
Dr. Patrick Stähler | 23

24. „Which innovation expanded
the global addressable
market for mobile
communication the most?*“
*After the invention of mobile telefony itself
Dr. Patrick Stähler | 24

25. Which
innovation made
this possible?
Dr. Patrick Stähler | 25

26. Prepaid
Dr. Patrick Stähler | 26

27. Business Model
innovation
» Beats Technology
» Beats Product
» Beats Process

28. Dr. Patrick Stähler | 28

29. The business model creates value not technology or a product itself
technology
X value / utility
creates
enables business model
defines
business strategy

30. To develop a business model with a
purpose, is
To Do the right
things And not to
do things right

31. „What is a
business
model?“
Dr. Patrick Stähler | 31

32. The business model is the
DNA of your business
Dr. Patrick Stähler | 32

33. The business model gives
meaning to your
employees and customers
Dr. Patrick Stähler | 33

34. Mountain Rescue in the
Swiss Alps by volunteers
the basic idea behind alpinerettung
Schweiz
Volunteers from the Swiss Alpine Club and the
REGA (Swiss Air Rescue) are responsible for
rescue in the Swiss alps.
The operation are financed by patrons or
members of the clubs in exchange of free
services
Highly professional non-profit organization also
on the revenue side
Dr. Patrick Stähler | 34

35. The purpose of a
business is to
create customers.
Peter Drucker
Dr. Patrick Stähler | 35

36. “To refresh the world”
Dr. Patrick Stähler | 36

37. “To put a computer on
every desk and in every
home”
Dr. Patrick Stähler | 37

38. “To organize the world’s
information and make it
universally accessible”
Dr. Patrick Stähler | 38

39. Contribution based on
sales support cultural &
social purposes
the idea behind Migros Culture Percentage
Migros, the largest Swiss retailer, is organized as a
cooperative that bans alcohol and tobacco from its
product range
A share of its revenues are devoted to social or
cultural projects
Migros runs Migros Klubschule (Migros Club
School) with 500.000 people attending trainings
every year
Migros is runs the language school Eurocentres
with 13.000 students a year in 8 languages and 30
locations
Dr. Patrick Stähler | 39

40. 1. What value/ benefit do
we create for whom?
2. How do we do it?
3. How do we earn money?
Dr. Patrick Stähler | 40

41. Now, we need a common
language for describing a
business model
Dr. Patrick Stähler | 41

42. Components of a
business model Value Proposition
What value or benfit do we create for our
customers and partners?
Value Architecture
How do we create the value?
Revenue Model
How and with what do we earn money?
Dr. Patrick Stähler | 42

43. „ What industry
are we in?
Who are our
competitors? “
Dr. Patrick Stähler | 43

44. „ In which
industry are
we in? “
Dr. Patrick Stähler | 44

45. „That was the job
the customer
wanted to do.“
Dr. Patrick Stähler | 45

46. Value Proposition/ customer
Wertschöpfungsarchitektur customers Value Proposition/ Kunden
Angebot Distributionskanäle Kunden
Wie sieht mein WhoWie erreicht das
are our Wer ist mein
Angebot aus? Angebot meine Kunde?
customers?
Kunden? Welchen „Job“
What job do we solve übernehme ich für
meinen Kunden?
Wertschöpfungskette for our customers?
Was sind die
Kunden
wichtigsten Schritte Aktivität 1 Aktivität 2 Aktivität 3 Aktivität 4
Aktivität 1 Nutzen
der
Welchen Nutzen
Wertschöpfung?
stifte ich für meinen
value proposition Kunden?
Kernfähigkeiten Partner
Welchen Nutzen
Welche What value do we
Welche Partner stifte ich für meine
Kernfähigkeiten benötige ich? Partner?
brauche ich? create for our
customers?
What value do we
Ertragsmodell Kostenstruktur Ertragsquellen
create for our
Die Kostenstruktur wird Womit verdiene ich
durch die partners? Geld?
Wertschöpfungs-
architektur festgelegt.
Kultur/ Werte Führungsstil Beziehungskultur Werthaltung
Welchen Führungsstil Wie gehen wir Welche Werte prägen
pflege ich? miteinander um? uns?
Dr. Patrick Stähler | 46

47. Wertschöpfungsarchitektur
Value architecture Value Proposition/ Kunden
Angebot Distributionskanäle Kunden
Wie sieht mein
offer Wie erreicht das
distribution architecture mein
Wer ist
Angebot aus? Angebot meine Kunde?
What is our Kunden? How do we reachWelchen „Job“
our
übernehme ich für
offering? customers? meinen Kunden?
Wertschöpfungskette How do we
Was sind die communicate with our
Kunden
wichtigsten Schritte Aktivität 1 Aktivität 2 Aktivität 3 Aktivität 4
customers?
Aktivität 1 Nutzen
der value chain
Welchen Nutzen
Wertschöpfung?
stifte ich für meinen
What are
Kernfähigkeiten our value Partner custoKunden?
activit activit activit activit mer Welchen Nutzen
Welche creating steps? Welche Partnery 2
y1 y3 y4 activitstifte ich für meine
Kernfähigkeiten is our value benötige ich? y Partner?
What
brauche ich?
chain?
core capabilities partner
Ertragsmodell Kostenstruktur Ertragsquellen
What are theKostenstruktur wird
Die core Which partners do ich
Womit verdiene
capabilities wedie
durch
Wertschöpfungs- we need?Geld?
need? architektur festgelegt.
Kultur/ Werte Führungsstil Beziehungskultur Werthaltung
Welchen Führungsstil Wie gehen wir Welche Werte prägen
pflege ich? miteinander um? uns?

48. Wertschöpfungsarchitektur Value Proposition/ Kunden
Angebot Distributionskanäle Kunden
Wie sieht mein Wie erreicht das Wer ist mein
Revenue model
Angebot aus? Angebot meine Kunde?
Kunden? Welchen „Job“
<
übernehme ich für
cost structure sources of revenue
meinen Kunden?
Wertschöpfungskette
Cost structure is With what do we
Was sind die Kostenstruktur
defined by the valueAktivität 3 Ertragsquellen
Ertragsmodell
wichtigsten Schritte Aktivität 1 Aktivität 2 Aktivität 4
Kunden
Aktivität 1
earn money? Nutzen
architecture
der
Wertschöpfung?
Die Womit Welchen Nutzen
stifte ich für meinen
Kernfähigkeiten
Kostenstrukt Partner verdiene
Kunden?
Welchen Nutzen
Welche ur wird
Führungsstil Welche Partner ich Geld?ich für meine
Beziehungskultur stifte Werthaltung
Kernfähigkeiten benötige ich? Partner?
brauche ich? durch die
Wertschöpfu
ngs-
architektur
festgelegt.
Kultur/ Werte
Welchen Wie gehen Welche
Dr. Patrick Stähler | 48
Führungss wir Werte
til pflege miteinande prägen

49. What business are we in? Our business model
Value architecture Value Proposition/ customer
offer distribution architecture customers
What is our How do we reach our Who are our
offering? customers? customers?
What job do we
solve for our
customers?
value chain
What are our value
creating steps? value proposition
customer
activity 1 activity 2 activity 3 activity 4
What is our value activity
What value do we
chain?
create for our
customers?
core capabilities partner
What value do we
What are the core Which partners do create for our
capabilities we we need? partners?
need?
Revenue model cost structure sources of revenue
Cost structure is defined With what do we
by the value architecture earn money?
Culture/ values leadership style relationship style values
What leadership style How do we interact What values do we
do we have? with each other and pursue?
the customer?

50. What business are we in? Our business model
Value architecture Value Proposition/ customer
offer distribution architecture customers
What is our How do we reach our Who are our
offering? customers? customers?
What job do we
solve for our
customers?
value chain
What are our value
creating steps? value proposition
customer
activity 1 activity 2 activity 3 activity 4
What is our value activity
What value do we
chain?
create for our
customers?
core capabilities partner
What value do we
What are the core Which partners do create for our
capabilities we we need? partners?
need?
Revenue model cost structure sources of revenue
Cost structure is defined With what do we
by the value architecture
< earn money?
Culture/ values leadership style relationship style values
What leadership style How do we interact What values do we
do we have? with each other and pursue?
the customer?

51. «Everybody wants to be
innovativ:
But what is an
innovation?»

52. 80 devices in Germany
Dr. Patrick Stähler | 52

53. 1 device
Dr. Patrick Stähler | 53

54. Innovation is all about
being different

55. But if everybody is doing
he same, you have to find
something else

56. Optimal is when different
business models exists
and all have devoted
customers

57. „ How do I do
this?“
“
Dr. Patrick Stähler | 57

58. If you are in a market for
giants...

59. .. and you play with their
rules you will get
nowhere…

60. „…but if you can create your own
rules of engagement than you can
compete even in a market for
giants. “

61. Business model innovation
1. Value Innovation
(We offer a better value proposition for an
existing or new problem)
2. Architectural innovation
(We reconfigure the value chain so that a better
value proposition emerges)
3. Revenue model innovation
(We change the revenue mix and thereby
creating a better value proposition)

62. Fight eye diseases in India
with mass production
processes for low costs
the basic idea behind Aravind Eye
Hospitals
The network of not-for-profit hospitals and vision
centers performs 300,000 eye surgeries each
year -- 70% for free -- using broadband
connections to on-call doctors in city hospitals for
instant diagnosis.
Camps in rural areas screen thousands of
patients weekly. "We are going from village to
village to provide eye care to the unreached,"
says Aravind's chairman, Dr. P.
Namperumalsamy.
Aravind won the 2008 Gates Award for Global
Health.
Dr. Patrick Stähler | 62

63. A deliberate change of a business model is a good strategy
Starting points of
business model
innovation
All components of a business
model are starting points for
innovation
Value Innovation
Architectural Innovation
Revenue Model Innovation
At the end, all business model
innovation must create more
value to the customers
Dr. Patrick Stähler | 63

64. The fluidminds way of business model innovation
Understand Unlearn & mobilize Ideate
• Find customer insights • Unveil tacit assumptions • Generate
via jobs-to-be-done about the industry • value ideas
• Describe current • Create discomfort with • architectural ideas
business model current situation • revenue ideas
• Understand market
trends
Design Select & Prototype Build & Learn
• Design new business • Select business models • Execute business model
models • Prototype & customer • Gather customer
• Check interdependen- Development feedback & data
cies in business model • Write Business Case • Adapt business model
• Select new business
model

65. The peepoo bag. Short
brainstorming what
business models are
possible?
peepoo bag is a single-use, self-
sanatising toilet bags
Source: Idea taken from Alexander
Osterwalder
Dr. Patrick Stähler | 65

66. Dr. Patrick Stähler | 66

67. Dr. Patrick Stähler | 67

68. Business Model Innovation is an analytical
and creative process. There is a reason
why God gave us two brain spheres.

69. Weitere Informationen
http://blog.business-model-
http://blog.business-model-innovation.com
Dr. oec. Patrick Stähler
fluidminds GmbH
Seefeldstrasse 5a
CH-8008 Zürich
Patrick.Staehler@fluidminds.ch
www.fluidminds.ch
blog.business-model-innovation.com