Index

Action Tank, 140–141, 144, 148, 149

adaptive organizations, 62

affinity clubs, 34

agile development, 91, 93, 94

agility, 62, 70

Airbnb, 60–61, 101, 102, 114, 119, 121, 124

airline industry, 16, 46–47, 80, 83, 84, 127–137

Aldi, 139

Alibaba, 102, 114, 118

Alphabet, 101

Altman, Elizabeth J., 101–111

Amazon, 44–46, 51–53, 101, 119

Amazon Web Services, 97

American Airlines, 47

American Express, 2–3

Anderson, Gary, 31

Apple, 15–17, 36, 101, 113–115, 120, 124

App Store, 115, 124

asset sharing, 62, 69, 70

assumptions, reexamining, 40

Auction House, 107

auto industry, 26, 28, 139

automation-enabled services, 34

Avon, 39–40

Banco Santander-Chile, 127

Banefe, 127

banks, 81, 127

BBureau, 49–50

Benzac, 85

Berger, Jacques, 140

Best Data, 15

beta tests, 92

Better Place, 81

big data, 62, 64, 65, 87

Blackbox, 108

blades-and-razor model, 15–16, 35

Blank, Steve, 87–100

Blizzard Entertainment, 107

blockchain technology, 121

Blue River Technology, 91

Blyk, 81

Bose, 41

Bouygues, 140, 144

break-even load factor (BELF), 131

breakthrough innovation, 145–146

brokerage, 34

Bronner, Michael, 4–5

Bryce, David J., 73–86

Build-a-Bear, 37

bundling, 34, 81

business model canvas, 89–91

business model innovation

challenge of, 43

importance of, 36

interest in, 37

need for, 18–19, 27–29

paths to, 43–57

success of, 15–17, 30–36

business models

adjusting, 6

advantageous, 38–39

analogies, 34–35

to avoid, 39

building, 21–27

complements versus substitutes, 135–137

declining, 38

definition of, 18–21, 59–60

dominant, 60

elements of, 18–21, 22, 29

features of, 59–61, 66–68

flawed, 1, 6–8

focused, 44–45, 53

“free,” 73–86

importance of, 1–13

keys to successful, 61–64

lean start-ups, 87–100

low-cost, 141–145, 147

multiple, 127–137

need for new, 18–19, 27–29

as planning tools, 8

platform, 101–111, 113–126

problems with, 37–42

reinventing, 15–36

social, 139–150

spreadsheets and, 5–6

staying with current, 31

as stories, 1–5, 12–13

strategy and, 3, 9–13

tests for, 6–8

transformative, 59–71

transition between, 41

understanding current, 18–19

business plans, 88–89

business schools, 87, 89, 98

business spillovers, 123, 144–145, 148

Caesars Entertainment, 47

call centers, 45, 48–49

Cards Against Humanity, 108

Casadesus-Masanell, Ramon, 127–137

Cavalli, Benjamin, 143–144

Celulosa Arauco, 127

Chatroulette, 124, 125

Choudary, Sangeet Paul, 113–126

Christensen, Clayton M., 15–36

Clark, Maxine, 37

classified ads, 79

Cliffe, Sarah, 37–42

closed-loop processes, 62

cloud services, 97

collaboration, 62, 65, 145–146

collaborative ecosystem, 69, 70

commonalities, 45–46

Compaq, 127

competencies, identifying new, 32–36

competition

destructive, 9

free-product, 73–86

inter-industry, 37

in platform model, 117, 119–122

shifting basis of, 29

strategy and, 9

competitive advantage, 25, 101–102, 137

competitive strategy, 9–13

complements, 135–137

consumer-centered innovation, 145

consumers. See customers

continuous learning, 88

corporations

lean start-up practices and, 98–99

reputation of, 146–148

cost accounting system, 84–85

cost structure, 20, 22

Craigslist, 79

credit bureaus, 108–109

Credit Karma, 108

cross-selling, 80

crowdsourcing, 34, 97, 121

customer development, 91, 92, 94

customer exclusivity, 142

customer loyalty, 38–39

customers

connecting with, 102, 106–107

defection by, to free offerings, 75–77

feedback from, 93, 94

interactions with, 104

needs of, 17, 48, 104

poor, 139–150

customer value, 117

customer value proposition (CVP), 18–26, 31

Cyc Fitness, 103, 105

Dalsace, Frédéric, 139–150

Danone, 140–146, 148, 149

data-into-assets, 34

data sensors, 62, 64

data sets, 121–122

decision makers

best-informed, 50–51, 52

choices by, 54–57

selecting, 50–54

decision making

algorithms, 50–51

timing of, 47–50

decision risk, 51–53

decisions

order of, 48–49

postponing, 47, 52

splitting up key, 49–50

delayed threats, 76–77

Dell, Michael, 11, 12

Dell Computer, 11–13, 127

demand, uncertain, 44–45

demand-side economies of scale, 118

Department of Defense (US) (DoD), 54–55

Deseret Media, 79

design cycles, 37

destructive competition, 9

developing countries. See emerging markets

Diablo video game, 107

Diamond Multimedia, 15

Diapers.com, 44, 53

digital platforms, 34

discount retailing, 9–11

disintermediation, 34

disruptive innovation, 28, 38

Dow Corning, 30–36

Drucker, Peter, 2

Dyer, Jeffrey H., 73–86

Eastern Exclusives, 5

eBay, 8, 80

economies of scale, 117–118

ecosystem value, 117

embedded services, 39

emerging markets, 64, 127, 140

Emmaüs, 142, 149

employees

empowerment of, 50

flexibility of, 134

motivation of, 146

engagement, 125

entrepreneurial economy, 95, 97–98

Epiduo, 85

Essilor, 140–142, 145–146, 149

EuroDisney, 6

external interaction, 117

external networks, 120–121

Faber, Emmanuel, 140, 145

Facebook, 101, 102, 118, 119, 122, 124, 125

factor prices, 64

failing fast, 88, 89

Faivre-Tavignot, Bénédicte, 139–150

family-controlled businesses, 41–42

Fargo, J. C., 2

FarmVille, 124

fear, 101

FedEx, 28

finance, 121

financing, access to, 97

Fitbit, 121

five forces model, 118, 119

five-year plans, 89

Flickr, 80

focused business models, 44–45, 53

Forum Athletic Club, 103, 105

fractionalization, 34

free business model, 73–86

free competitors

assessing threat from, 74–77

responding to, 73–74, 76–83

rethinking profit centers and, 83–86

freemium, 34

Galderma, 80, 85–86

Garmin, 106

General Electric (GE), 99

Gillette, 15

Girotra, Karan, 43–57

GitHub, 97

GlaxoSmithKline, 85

globalization, 95

Gmail, 82

Google, 50, 79, 81–82, 84, 113, 118, 120–121, 124, 125

Google Docs, 78

Google Play, 124

Hagiu, Andrei, 101–111

Harvard Business School, 98

Harvey, Will, 94

Hatch, Nile W., 73–86

health care, 56, 121–122

health clubs, 103, 105

Healx, 69–71

hedged portfolios, 46, 53

Heraud, Jorge, 91

Hewlett-Packard, 81

Higgins, Bob, 36

Hilti, 23, 24, 26–27, 29

Hirsch, Martin, 140

Honeywell, 120

human resources, 121

Hypios, 48

IBM, 39, 127

incentives, integration of, 56

industrial economy, 117–118

information

availability of, 97

unfiltered, 40

information technology, 120

ingredient suppliers, 110

InnoCentive, 48

innovation

breakthrough, 145–146

consumer-centered, 145

disruptive, 28, 38

in large corporations, 99

market, 27

permissionless, 124

process, 4

technological, 28, 36, 62–64

See also business model innovation

innovation-based economy, 95, 97–98

Innovation Corps, 98

integration of operations, 56

Intel, 110

interaction failure, 125

intermediaries, 56

internal optimization, 117

internet economy, 118

Intuit, 24, 77, 82, 99, 101, 103–107

inversion, 120

investments, 40–42

iPad, 37

iPhone, 113–114

iPhone apps, 80

iPod, 15, 17, 36

iTunes, 15–16

job losses, 95

job to be done, 18–20, 22–24, 28

Johnson, Mark W., 15–36

Jung, Andrea, 39–40

just-in-time inventory, 121

Kagermann, Henning, 15–36

Kanter, Rosabeth Moss, 145

Kavadias, Stelios, 59–71

key processes, 18, 21, 22, 25–27

key resources, 18, 20–22, 25–27

Kickstarter, 97

Kmart, 9, 11

Ladas, Kostas, 59–71

LAN Airlines, 46, 128–137

large corporations, innovation processes of, 99

Lawson convenience stores, 104

lean manufacturing, 94

lean start-ups, 87–100

agile development and, 91, 93, 94

business model canvas and, 89–91

business schools and, 98

corporations and, 98–99

customer development and, 91, 92, 94

decision making in, 49–50

pivoting by, 87, 92

principles for, 89, 91

small business and, 98

versus traditional start-ups, 96, 97

leasing, 34

Lendio, 108

Lewis, Michael, 1

Li & Fung, 55–56

Lidl, 139

LinkedIn, 122

LiveOps, 45, 48–49

Loch, Christoph, 59–71

Logan, Prescott, 99

logistics, 121

Lore, Marc, 44

low-cost business model, 141–145, 147

low-cost products, 139–140

low-end disrupters, 28

low-touch model, 35

Lyft, 125

Magretta, Joan, 1–13

margin model, 20, 22

Market Basket, 139

marketing, 120

market innovations, 27

Marriott, 101

Martin, Claire, 146

match quality, 125

McGrath, Rita Gunther, 37–42

Menascé, David, 139–150

metrics, 22, 27, 33, 124–125

Microsoft, 39, 101

Office software, 77, 78

minimum viable product, 87, 89, 93

Mint.com, 77, 82

MinuteClinics, 18, 24

Mobiliz, 143, 145, 146

Model T, 121, 139, 148

monopolies, 118

multiple business models, 127–137

multisided platforms (MSPs), 101–111. See also platform businesses

Murdoch, Rupert, 126

Muse, 50–51

Myspace, 126

Nano, 18, 26, 28

narratives, business models as, 1–5, 12–13

narrative test, 6–8

National Jewish Health, 26

NBC, 121

negative network effects, 125–126

negative operating cycle, 35

Netafim, 53

Netessine, Serguei, 43–57

Netflix, 119, 127

network effects, 79

barriers to entry and, 102

multisided platforms and, 104, 109, 114, 120, 123

negative, 125–126

power of, 117–118

Nielsen, 109

noise, 124

Nokia, 113

norms, 22, 27, 33

not-even-mine inventory, 121

Not Your Average Joe’s, 50–51

numbers test, 6–8

Nutriset, 146–147

Objective Logistics, 51

offerings, 22, 30

free, 73–86

mix of, 44–46

See also products; services

Office software (Microsoft), 77, 78

online grocers, 6–7

open architecture, 123

open governance, 123

Open Office, 78

open source software, 97

operations, 121

opportunities

identifying, 43

investing in, 40–41

turning threats into, 42

Optique Solidaire, 141, 143, 149

organizational skills, 134

Osterwalder, Alexander, 94

outsourcing, 120–121

overseas sourcing, 55–56

Pandora, 83

Parker, Geoffrey G., 113–126

patience, 35–36

pay-as-you-go model, 35

permissionless innovation, 124

personal computers, 5, 11–13

personalization, 64, 65, 69–70

personalized products and services, 61

pharmaceutical industry, 69–71, 80, 85–86

physical assets, 131

Pigneur, Yves, 94

pipeline businesses, 114–117, 120–126

pivoting, 87, 92

platform businesses

access and, 122–124

characteristics of, 114–115

communities and, 120–121

competition for, 119–122

ecosystems in, 119–122

focus of, 122

governance, 122–124

metrics for, 124–125

move from pipelines to, 114–117

network effects and, 117–118, 125–126

players in, 116, 119

rise of, 115

strategies of, 115, 119–126

varieties of, 114

platform models, 39, 65, 101–111, 113–126

platform technology, 60–61

poor consumers, 139–150

Porter, Michael, 9, 117

poverty, 139, 140, 141, 150

Priceline.com, 7

Priceline Webhouse Club, 7

pricing, usage-based, 62, 65

private equity firms, 41

processes, 18, 21, 22

process innovations, 4

Procter & Gamble, 27, 31, 50

product development managers, 84

product life cycles, 37, 39

products

bundling, 81

commonalities across, 45–46

connecting, 108–109

cross-selling, 80

development of, 48, 88, 91, 93, 94

free, 73–86

low-cost, 139–140

minimum viable, 87, 89, 93

mix of, 44–46

personalized, 61

in social business model, 142–143

third-party, 102–105

turning into platforms, 101–111

up-selling, 80

product-to-service model, 35

profit centers, 83–86

profit formula, 18, 20, 22, 24–25, 131–132

Projet Malin, 143–144, 149

Quad/Graphics, 56

Qualcomm, 99

QuickBooks, 24, 103–107

Quicken, 77, 82

Quidsi, 44

razors/blades model, 15–16, 35

Redden, Lee, 91

regulation, 64, 95

Renault, 140, 142, 143, 145, 146

resource control, 116–117

resource orchestration, 116–117

resource velocity, 20, 22

revenue diversification, 131–132

revenue managers, 84

revenue model, 20, 22, 39

revenue stream, 54–55

reverse razors/blades model, 35

ride sharing, 123

Ries, Eric, 94

Roominate, 97

Rouvier, François, 145

Rovio, 124

rules and metrics, 22, 27, 33

Ryanair, 80, 83

SABRE, 47

Samsung, 119

SAP, 121

Schneider Electric, 149

Sears, 8

seekers, 48

Seidenberg, Ivan, 40

services

bundling, 81

connecting, 108–109

free, 73–86

low-cost, 139–140

mix of, 44–46

personalized, 61

in social business model, 142–143

third-party, 102–105

turning into platforms, 101–111

SFR, 140, 142, 143, 149

shareholders, 41

Sheets, Don, 31, 32, 33

Shopify, 110

Siemens, 120, 121

Silicon Graphics, 8

SiriusXM, 83

skills barrier, 24

Skype, 75, 80

small businesses, 98

social business models, 139–150

concept of, 140–141

corporate reputation and, 146–148

customer exclusivity and, 142

hidden payoffs of, 144–148

innovation by, 145–146

versus low-cost model, 147

motivation in, 146

partners and, 149

products and services in, 142–143

solutions provided by, 143–144

succeeding with, 148–149

value propositions of, 142–144

social goals, 148

Soliris, 69

solvers, 48

specialization, 26

spillover effects, 123, 144–145, 148

spreadsheets, 5–6

standardization, 35

start-ups

characteristics of, 89

constraints on, 95, 97

failure rate of, 87, 95

growth of, 95

information access for, 97

lean, 87–100

lean versus traditional, 96, 97

standard model for, 88–89

stealth mode for, 92, 94

Startup Weekend, 94

stealth mode, 92, 94

strategy

business models and, 3, 9–13

platforms and, 119–126

subscription clubs, 35

substitutes, 135–137

super angel funds, 97

supermarkets, 9–10

suppliers, to multisided platforms, 110–111

supply economics, 117–118

Swatch, 120

Swiffer, 27, 31

Target, 11, 16

Tarziján, Jorge, 127–137

TaskRabbit, 123

Tata Group, 18, 23, 26, 28

technological innovations, 28, 35, 62–64

TechStars, 97

third parties, 81, 102–105, 120–121

Threadless, 120

threat assessment, of free offerings, 74–77

time barrier, 24

time horizons, 55–56

Toyota Production System, 94

transformative business models, 59–71

transitions, 41

traveler’s checks, 2–4

Twitter, 124

Uber, 47, 65, 102, 114, 119, 121, 123–126

uncertain demand, 44–45

up-selling, 80

usage-based pricing, 62, 65

user communities, 35

value-chain model, 115

value creation, 18–20, 118, 122–123

Van Alstyne, Marshall W., 113–126

venture capital, 95, 97

Verizon, 40–41

VideoWave, 41

Vignaud, Emmanuelle, 148

Volkswagen, 45

Walgreens, 121

Walker, Jay, 7

Walmart, 9–11, 16, 50

Walton, Sam, 9, 10

Warby Parker, 120

waterfall development, 94

wealth barrier, 24–25

Webvan, 6–7

Whitman, Meg, 8

Xiameter, 32–36

Xmarks, 81

Yahoo, 79, 82

Y Combinator, 97

Yellow Cab, 121

YouTube, 121

Yunus, Muhammad, 139–150

Zappos, 44, 53

Zynga, 119, 124