Two authors that I enjoy reading are talking today about Business Model innovation – a subject that I’m passionate about and often write about. Idris Mootee wrote What Do You Know About Business Model Innovation?, and Stefan Lindegaard wrote about Business Model Innovation – Big Risk, Big Rewards. Both articles note the confusion that people have when trying to define “business model” in the context of innovation and whether it is different from your “strategy”. In my experience, if you disagree with someone’s definition of “business model”, the disagreement will typically come down to a question of scope – how narrow or broad you definition is. I personally take a very broad view and am partial to this more “fun” definition: “How to do I separate my customers from their money?” For me, this definition excludes product or service innovation, but includes most everything else in the goal …

People are confused about the difference between Business Model, Strategy and Innovation. by Idris Mootee Most people think they know what a business model is. But when you ask them about the “strategy’ then they wondered what they’re talking about. Most of the time they mean business strategy (what a company does and how to make money) and use the words interchangeably. That’s fine. Then some people even get more confused when they apply that in innovation context. They mean changing or rethinking the business itself, including its core, boundaries, activities and capabilities. That’s strategic innovation. Business model innovation could be part of the outcome. But let’s face it, how many companies out there need to (and can afford to) rethink their business models? A company can innovate strategically but with no need to change its business models. After all, there are only less than 10 business models out there, … Continue reading →

There is a lot of talk about business model innovation these days. Psion, the maker of mobile handheld computers has joined in and they aim high. They want to no less than revolutionize the rugged mobile computing market with its move to an open innovation business model in which Psion will co-create mobile hardware, software and services, bringing together customers, partners and developers within the Psion eco-system. They call this approach for “Open Source Mobility”. Psion has set some very ambitious objectives for this initiative. One is to dramatically reduce customer’s total cost of ownership and do this 30-50% better than their competitors over a five to ten year span. Such ambitious objectives are not unusual when companies began to work with business model innovation. Dell became an 800-pound gorilla by changing how to order and build your own computer and more importantly by getting payments upfront while paying their … Continue reading →