Business Models sour when your client's world changes, & you keep doing what you (always) do.

So, how do you know if your business model is still relevant?.

The answer to that question is usually tied to your answer to this question:

“has your Customer (experience) changed in any way?

Has their reality, their needs or fears changed?

Have you seen innovative competitive solutions or substitutes enter the market?

Has technology or how we use it changed?”

If you consider that today is as slow as it is ever going to get for us, then chances are this degree of speed has caused a few changes for your customers.

Plastic Business Models flex and adapt more easily!

When we take on a business design or innovation effort, we don’t set out to build a relevant business model.

The goal is to build a sustainable one which means we build in plasticity and triggers that allow continuous adjustment as the external and internal economic and social factors change.

1. We build in scalability without risking returns,

2. We check for differentiation and competitiveness,

3. We validate access to network effects to multiply value,

4. We scan the business ecosystem in search for advantages,

5. We bulletproof against sudden change and

6. We check for purpose and positive effect on shareholder and stakeholders

Is your business model at risk?

To get a quick sense of whether it is or isn't, consider answering these 7 questions for an indication either way:

1. Are my Customers locked in my solution for years or nothing stops them from leaving?

2. How big of a portion of my revenue is recurring versus transactional? Could I generate more recurring revenue?

3. Where do I incur the cost? Before or after I generate revenue?

4. Are my costs 30% lower/higher than competitors?

5. How much of the value created in my business model is created for free by external parties? (i.e. Facebook’s value is 100% created by its users)

6. How much of exponential growth can I achieve before I need to add resources to my business?

7. Is my business competition resistant due to its features and design or am I vulnerable to competition?

I will give you a hint

This is not a YES/NO exercise. The answers are probably somewhere in the middle and that gives room for making your business model (more) relevant now and sustainable for the long term.

Business Models sour when your client's world changes, & you keep doing what you (always) do.-

Kasia Nowaczyk, Business. Model Innovation, NB3