Business modeling in innovation, Bengt Järrehult, SCA
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Bengt Järrehult, Keynote: Affärsmodellering inom innovation, den felande länken till kundnyttan!? På Camp Digital innovation kommer Bengt prata om vikten av att inte bara satsa på tekniska innovationer utan också samtidigt se på affärsmodellen bakom samt att använda detta för att bygga upp nya affären. Bengts föredrag baseras delvis på det IT-multimiljardären Steven Gary Blank gjorde när han byggde upp sina företag, och kopplar dessa principer till lokala erfarenheter från SCA.
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Business modeling in innovation, Bengt Järrehult, SCA
- 1. Business Modeling in innovation - the missing link to customer value!? Prof. Bengt Järrehult, SCA & LU at Campdigital by Sigma 1
- 2. ”De som vinner i längden är inte de som är snabbast, effektivast eller billigast. Vinnarna finns i stället bland dem som ser innovation och kontinuerliga genombrott som en naturlig del av verksamheten” Håkan Karlsson 2
- 3. Managing your Innovation Portfolio , Harvard Business review May 22, 2012 Products & Services Improve existing Create&targetnew Develop newAdd adjacent Markets&Customers ServeexistingEnteradjacent Upgrades/Core Optimizing existing products for existing customers Next Generation/Adjacent Expanding from existing business into “new to the company” business Breakthroughs/Transformational Developing new products and services and/or aiming for markets that don’t yet exist 3
- 4. Managing your Innovation Portfolio , Harvard Business review May 22, 2012 Products & Services Improve existing Create&targetnew Develop newAdd adjacent Markets&Customers ServeexistingEnteradjacent 4
- 5. Is it real? Can we win? Is it worth doing? , Professor George Day at Wharton School, , Harvard Business review December, 2007 5-25% 25-40% 40-55% 50-60% 60-75% Products & Services Improve existing Create&targetnew Develop newAdd adjacent Markets&Customers ServeexistingEnteradjacent 5
- 6. Managing your Innovation Portfolio , Harvard Business review May 22, 2012 Products & Services Improve existing Create&targetnew Develop newAdd adjacent Markets&Customers ServeexistingEnteradjacent 6
- 7. Good Lead Innovator -general biz 45% 30% 25% A diversified industrials company Managing your Innovation Portfolio , Harvard Business review May 22, 2012 + RTEC on Portfolio Management, 2008 70% 20% 10% A leading consumer goods company 80% 18% 2% A midstream technology company 45% 40% 15% This is the optimal balance for short term rewards… 10% Good Lead Innovator - general biz 20% 70% …whereas long term rewards come as this! 7 Breakthroughs (Genombrott) New generations Upgrades Good Fast Follower - general biz
- 8. ”De som vinner i längden är inte de som är snabbast, effektivast eller billigast. Vinnarna finns i stället bland dem som ser innovation och kontinuerliga genombrott som en naturlig del av verksamheten” Håkan Karlsson 8
- 9. 9 Breakthroughs (Genombrott) Next generations Upgrades 1st shipment to customers FEASIBILITY DEVELOPMENT LAUNCHCAPABILITY PRE- CONCEPT Gate 2 Gate 3 Gate 4 Gate 5 Gate 1 Robert C. Cooper, Stagegate Inc. + SCA Innovation Funnel9
- 10. Steven Gary Blank (“The entrepreneurs’ guide to start-ups”) + HBR May 2013, Page 54 Breakthroughs (Genombrott) Next generations Upgrades Customer Discovery Customer Validation Company Building Customer Creation 10
- 11. SCA’s two “Stone plates” from its Innovation Framework11 Breakthroughs (Genombrott) Next generations Upgrades
- 12. 12 SCA 2013, Linear and iterative ways of working
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- 17. My sweat problem deprives me of joy in life Fitting auxiliaries to my clothes Sweat pads with dating success guarantee A reliable product I trust do perform 17 BusinessModelGeneration.com
- 18. BusinessModelGeneration.com My sweat problem deprives me of joy in life Fitting auxiliaries to my clothes A reliable product I trust do perform Sweat pads with dating success guarantee 18
- 19. BusinessModelGeneration.com19 Sweat pads with dating success guarantee Fashion shop sales minus 30% Advertising in Amelia 19
- 20. 20
- 21. BusinessModelGeneration.com21 Monthly deliveries Sweat pads with dating success guarantee Fashion shop sales B2B Advertising in Amelia 21
- 22. Customer segments: Revenues year 3: Costs year 3: Place your Post-Its here Total # customers Actual year 3 Place your Post-Its here Scroll down % of Cust. Revenue 1 Total Costs segm. 1 Total Costs segm. 2 0 - Please scroll 0% €0 €0 €0 Make your own notes Scroll down % of Cust. Revenue 2 Make your own notes Make your own notes Please scroll 0% €0 Scroll down % of Cust. Revenue 3 Please scroll 0% €0 Scroll down % of Cust. Revenue 3 Please scroll 0% €0 Place your Post-Its here Place your Post-Its here Total # customers Actual year 3 Scroll down % of Cust. Revenue 1 Scroll down Scroll down Scroll down Scroll down 0 - Please scroll 0% €0 Please scroll Annual costs Please scroll Please scroll Annual costs Please scroll Scroll down % of Cust. Revenue 2 Costs 1 Fixed costs Var.costs Costs 1 Fixed costs Var.costs Make your own notes Please scroll 0% €0 €0 €0 €0.00 €0 €0 €0.00 Scroll down % of Cust. Revenue 3 Scroll down Scroll down Scroll down Scroll down Please scroll 0% €0 Production Annual costs Please scroll Please scroll Annual costs Please scroll Scroll down % of Cust. Revenue 4 Costs 2 Fixed costs Var.costs Costs 2 Fixed costs Var.costs Please scroll 0% €0 €0 €0 €0.00 €0 €0 €0.00 Scroll down Scroll down Scroll down Scroll down Fill in Fill in Please scroll Annual costs Please scroll Please scroll Annual costs Please scroll €0 €0 Costs 3 Fixed costs Var.costs Costs 3 Fixed costs Var.costs Comments Comments €0 €0 €0.00 €0 €0 €0.00 This is … Scroll down Scroll down Scroll down Scroll down Please scroll Annual costs Please scroll Please scroll Annual costs Please scroll Costs 4 Fixed costs Var.costs Costs 4 Fixed costs Var.costs €0 €0 €0.00 €0 €0 €0.00 Scroll down Scroll down Scroll down Scroll down Fill in Fill in Please scroll Annual costs Please scroll Please scroll Annual costs Please scroll 0% Year 1 0% Costs 5 Fixed costs Var.costs Costs 5 Fixed costs Var.costs 0% Year 2 0% €0 €0 €0.00 €0 €0 €0.00 0% Year 3 0% Scroll down Scroll down Scroll down Scroll down Please scroll Annual costs Please scroll Please scroll Annual costs Please scroll Fill in Fill in Costs 6 Fixed costs Var.costs Costs 6 Fixed costs Var.costs 0 0 €0 €0 €0.00 €0 €0 €0.00 Scroll down Scroll down Scroll down Scroll down Please scroll Annual costs Please scroll Please scroll Annual costs Please scroll Fill in Fill in Costs 7 Fixed costs Var.costs Costs 7 Fixed costs Var.costs €0 €0 €0 €0 €0.00 €0 €0 €0.00 Scroll down Scroll down Scroll down Scroll down Please scroll Annual costs Please scroll Please scroll Annual costs Please scroll Fill in Fill in Costs 8 Fixed costs Var.costs Costs 8 Fixed costs Var.costs €0.00 €0 €0 €0.00 €0 €0 €0.00 Scroll down Scroll down Scroll down Scroll down Please scroll Annual costs Please scroll Please scroll Annual costs Please scroll Fill in Fill in Costs 9 Fixed costs Var.costs Costs 9 Fixed costs Var.costs 0% 0% €0 €0 €0.00 €0 €0 €0.00 Scroll down Scroll down Scroll down Scroll down Please scroll Annual costs Please scroll Please scroll Annual costs Please scroll Fill in Fill in Costs 10 Fixed costs Var.costs Costs 10 Fixed costs Var.costs €0 €0 €0 €0 €0.00 €0 €0 €0.00 Scroll down Scroll down Scroll down Scroll down Please scroll Annual costs Please scroll Please scroll Annual costs Please scroll Fill in Fill in Costs 11 Fixed costs Var.costs Costs 11 Fixed costs Var.costs €0.00 €0.00 €0 €0 €0.00 €0 €0 €0.00 Scroll down Scroll down Scroll down Scroll down Please scroll Annual costs Please scroll Please scroll Annual costs Please scroll Fill in Fill in Costs 12 Fixed costs Var.costs Costs 12 Fixed costs Var.costs 0 0 €0 €0 €0.00 €0 €0 €0.00 Number of Units used /customer, year Fixed price/customer,year [€] Average sales price per unit [€] Number of visits/customer, year Rebate given to retailer per unit [%] Fixed commission fee/customer, year [€] Variable commission fee/unit [€] Market share [%] Notes Notes Extraordinary annual side-effect revenue This is … Comments €0 €0 €0 €1 €1 €1 Costs Customer 1 €0 €0 €0 €1 €1 €1 Costs Customer 2 €0 €0 €0 €1 €1 €1 Revenues Cust. 1 €0 €0 €0 €1 €1 €1 Revenues Cust. 2 Do you have any extraordinary side effects on the revenue stemming from your Value Proposition Copyright: BengtJärrehult, SCA €0 €0 €0 €1 €1 €1 1 2 3 Costs Revenues Year €0 €0 €0 €1 €1 €1 1 2 3 Costs Revenues Year Customer segments: Revenues year 3: Costs year 3: Place your Post-Its here Total # consumers Actual year 3 Place your Post-Its here Scroll down % of Cust. Revenue 1 Total Costs segm. 1 Total Costs segm. 2 500 50 Retailer sales 100% €2,193,750 €257,101 €3,399,567 Make your own notes Scroll down % of Cust. Revenue 2 Make your own notes Make your own notes Please scroll 0% €0 Scroll down % of Cust. Revenue 3 Please scroll 0% €0 Scroll down % of Cust. Revenue 3 Please scroll 0% €0 Place your Post-Its here Place your Post-Its here Total # consumers Actual year 3 Scroll down % of Cust. Revenue 1 Scroll down Scroll down Scroll down Scroll down 700,000 42,000 eCommerce 100% €5,292,000 Legal & Brand Annual costs Cost/unit Transport Annual costs Please scroll Scroll down % of Cust. Revenue 2 Costs 1 Fixed costs Var.costs Costs 1 Fixed costs Var.costs Make your own notes Please scroll 0% €0 €187,500 €0 €0.05 €250,000 €250,000 €0.04 Scroll down % of Cust. Revenue 3 Scroll down Scroll down Scroll down Scroll down Please scroll 0% €0 Other Annual costs No var. costs Please scroll Annual costs No var. costs Scroll down % of Cust. Revenue 4 Costs 2 Fixed costs Var.costs Costs 2 Fixed costs Var.costs Please scroll 0% €0 €2,000 €2,000 €0.00 €15,567 €15,567 €0.00 Scroll down Scroll down Scroll down Scroll down Fill in Fill in Legal & Brand Annual costs Cost/unit Please scroll Annual costs No var. costs €0 €0 Costs 3 Fixed costs Var.costs Costs 3 Fixed costs Var.costs Comments Comments €20,000 €20,000 €0.00 €0 €0 €0.00 This is … Scroll down Scroll down Scroll down Scroll down Production Annual costs Cost/unit Other Annual costs Cost/unit Costs 4 Fixed costs Var.costs Costs 4 Fixed costs Var.costs €2,562,500 €2,000,000 €0.15 €351,200 €200,000 €0.02 Scroll down Scroll down Scroll down Scroll down Fill in Fill in Legal & Brand Annual costs No var. costs Other Annual costs Please scroll 2% Year 1 1% Costs 5 Fixed costs Var.costs Costs 5 Fixed costs Var.costs 6% Year 2 3% €101 €20,000 €0.00 €0 €0 €0.00 10% Year 3 6% Scroll down Scroll down Scroll down Scroll down Legal & Brand Annual costs No var. costs Other Annual costs No var. costs Fill in Fill in Costs 6 Fixed costs Var.costs Costs 6 Fixed costs Var.costs 75000 180 €0 €5,000 €0.00 €0 €0 €0.00 Scroll down Scroll down Scroll down Scroll down Transport Annual costs Cost/unit Legal & Brand Annual costs Please scroll Fill in Fill in Costs 7 Fixed costs Var.costs Costs 7 Fixed costs Var.costs €0 €0 €37,500 €0 €0.01 €0 €0 €0.00 Scroll down Scroll down Scroll down Scroll down Personnel Annual costs Cost/visit Production Annual costs Cost/unit Fill in Fill in Costs 8 Fixed costs Var.costs Costs 8 Fixed costs Var.costs €0.90 €0.70 €10,000 €0 €100.00 €3,134,000 €2,000,000 €0.15 Scroll down Scroll down Scroll down Scroll down Please scroll Annual costs Please scroll Please scroll Annual costs Please scroll Fill in Fill in Costs 9 Fixed costs Var.costs Costs 9 Fixed costs Var.costs 35% 0% €0 €0 €0.00 €0 €0 €0.00 Scroll down Scroll down Scroll down Scroll down Please scroll Annual costs Please scroll Please scroll Annual costs Please scroll Fill in Fill in Costs 10 Fixed costs Var.costs Costs 10 Fixed costs Var.costs €0 €0 €0 €0 €0.00 €0 €0 €0.00 Scroll down Scroll down Scroll down Scroll down Please scroll Annual costs Please scroll Please scroll Annual costs Please scroll Fill in Fill in Costs 11 Fixed costs Var.costs Costs 11 Fixed costs Var.costs €0.00 €0.00 €0 €0 €0.00 €0 €0 €0.00 Scroll down Scroll down Scroll down Scroll down Please scroll Annual costs Please scroll Please scroll Annual costs Please scroll Fill in Fill in Costs 12 Fixed costs Var.costs Costs 12 Fixed costs Var.costs 2 0 €0 €0 €0.00 €0 €0 €0.00 Number of Units used /customer, year Fixed price/customer,year [€] Average sales price per unit [€] Number of visits/customer, year Rebate given to retailer per unit [%] Fixed commission fee/customer, year [€] Variable commission fee/unit [€] Market share [%] Notes Notes Extraordinary annual side-effect revenue This is … Comments €0 €500,000 €1,000,000 €1,500,000 €2,000,000 €2,500,000 €3,000,000 Legal&… Legal&… Legal&… Transport Pleasescroll Pleasescroll Costs Customer 1 €0 €500,000 €1,000,000 €1,500,000 €2,000,000 €2,500,000 €3,000,000 €3,500,000 Transport Pleasescroll Other Legal&… Pleasescroll Pleasescroll Costs Customer 2 €0 €500,000 €1,000,000 €1,500,000 €2,000,000 €2,500,000 Retailersales Pleasescroll Pleasescroll Pleasescroll Sideeffects Revenues Cust. 1 €0 €1,000,000 €2,000,000 €3,000,000 €4,000,000 €5,000,000 €6,000,000 eCommerce Pleasescroll Pleasescroll Pleasescroll Sideeffects Revenues Cust. 2 Do you have any extraordinary side effects on the revenue stemming from your Value Proposition Copyright: BengtJärrehult, SCA €0 €500,000 €1,000,000 €1,500,000 €2,000,000 €2,500,000 €3,000,000 1 2 3 Costs Revenues Year €0 €1,000,000 €2,000,000 €3,000,000 €4,000,000 €5,000,000 €6,000,000 1 2 3 Costs Revenues Year Monthly deliveries Advertising in Amelia 22
- 23. Monthly deliveries Fashion shop sales B2B Advertising in Amelia #Act.Cust. 50 #Act.Cust. 42,000 Revenue tot €438,750 €1,316,250 €2,193,750 Revenue tot €882,000 €2,646,000 €5,292,000 Costs tot €2,201,520 €2,510,561 €257,101 Costs tot €2,679,767 €3,108,167 €3,399,567 €0 €500,000 €1,000,000 €1,500,000 €2,000,000 €2,500,000 €3,000,000 Legal&… Other Legal&… Production Legal&… Legal&… Transport Personnel Please… Please… Please… Costs year 3 for customer 1 €0 €1,000,000 €2,000,000 €3,000,000 €4,000,000 Transport Please… Please… Other Other Other Legal&… Production Please… Please… Please… Costs year 3 for customer 2 €0 €500,000 €1,000,000 €1,500,000 €2,000,000 €2,500,000 Revenues year 3 for customer 1 €0 €2,000,000 €4,000,000 €6,000,000 Revenues year 3 for customer 2 €0 €500,000 €1,000,000 €1,500,000 €2,000,000 €2,500,000 €3,000,000 1 2 3Year Customer1 €0 €1,000,000 €2,000,000 €3,000,000 €4,000,000 €5,000,000 €6,000,000 1 2 3Year Customer2 -100% -50% 0% 50% 1 2 3 Year Profit [%] €0 €2,000,000 €4,000,000 €6,000,000 €8,000,000 1 2 3Year Both customers 23
- 24. Lead Customers 24 Geoffrey A. Moore (“Crossing the Chasm”)
- 25. Company Building Customer Discovery Customer Validation Customer Creation The Chasm Lead Customers 1. Find the customer’s gains & pains 2. Find the gain creators & pain relievers = Offer 3. Find many different BMs 4. Test them by asking customers, iterate Steven Gary Blank (“The entrepreneurs’ guide to start-ups”)25
- 26. Company Building Customer Discovery Customer Validation Customer Creation Persevering The Chasm Acceleration Lead Customers Pivoting 1. Set the “final” Business Model 2. Get first sales to Lead Customer/Early adopter 3. If negative - pivot 4. If positive - persevere Steven Gary Blank (“The entrepreneurs’ guide to start-ups”)26
- 27. Company Building Customer Discovery Customer Validation Customer Creation The Chasm 1. Cross the Chasm the big Early Majority 2. Position the value proposition 3. Launch the value proposition large scale 4. Create demand for non-customers Steven Gary Blank (“The entrepreneurs’ guide to start-ups”)27
- 28. Company Building Customer Discovery Customer Validation Customer Creation The Chasm 1. Reach out for the Late Majority & Laggards 2. Review mission/culture 3. Review organization - venture in the existing company or in a new? 4. Focus on efficiency 28 Steven Gary Blank (“The entrepreneurs’ guide to start-ups”)
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