Business Ecosystem Design

Advanced Visual Business Modeling - or -

How to »Prototype« a Business Ecosystem? Service Experience Camp Berlin, September

th 14

2013

n e g d e i m h c S _ n a J @

Everyone wants to become a “Platform Business”

Consumer

Business-to-Business

m e t s y s o c E s s e n i s u B ≠ s m e t s y s o c E e c i v r e S / t c u d o r P

Image Credit: © 2012 Subprint (http://subprint.com/blog/it%27s-the-ecosystem,-stupid)

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We all love the Business Model Canvas … and it’s manifold derivates! But they all have the same problem ...

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Hardware OEM's: e.g. Foxconn

Other Stakeholders

Lowest Production Costs

Sponsoring / Discounts Manufacturing High Volume and Knowledge Planning Certainty

Schools and Universities

Service Contract Infrastructure Management

Core Value Proposition

Bulk Purchases

Technical Backend Providers: e.g. SAP

IP royalties / Commission

???

Reputation and Awareness

Digital Sales Channel with DRM and wide Spread

Media Delivery

Apple on Campus ???

IP royalties

Microsoft, Google, etc.

Complementary Offerings

New Business Ideas

Personal Data

Apple

Price Premium (Hardware, Media and App Sales) Reputation

Comission App Purchases

Media Industries

Sales Platform

Seamless User Experience

Developer Community

Technical and Sales Training

Apple Users

Higher Margins : Apple Price Premium Enriched User Experience

Apple Communities

Goods & Services

Software Developers: e.g. Adobe

Broad Service Station Covering

Higher Margins via Apple Price Premium

Retail/Certified Partners: e.g. Gravis Official Accessory Manufacturers: e.g. Belkin

Supplying and Enabling Network

Money & Credits

Choices & Consequences

Value Configuration Perspective: Chains/Shops/Networks

Activity Networks

Value Flow Mapping for Ecosystems Information

Intangible Value

Tom Hulmes Canvas (IDEO)

Patrick Stählers Canvas (Fluidmind)

!

etc. !

Other »Scientific Conceptualisations«

Fraunhofer IAO Canvas

Image Credits / Sources in order of appearance: Casadesus-Masanell, R., & Ricart, J. E. (2011). How to Design A Winning Business Model. Harvard Business Review, 89(1/2), 100–107. // Porter, M. E. (1996). What is Strategy? Harvard Business Review, (November - December). // Ouden, E. den. (2011). Innovation Design: Creating Value for People, Organizations and Society (1st ed.). Springer London. // Fjeldstad, Ø. D., & Stabell, C. B. (1998). Configuring Value for Competitive Advantage: On Chains, Shops, and Networks. Strategic Management Journal,, Vol 19, 413–437. // valuenetworksandcollaboration.com, 2011 // Tom Hulme (http://weijiblog.com/ startup-tools/) // Patrick Stähler (http://blog.business-model-innovation.com/tools/) // Johnson, M. W., Christensen, C. M., & Kagermann, H. (2008). Reinventing Your Business Model. Harvard Business Review, 86(12), 50–59. // Fraunhofer IAO (http://moby.iao.fraunhofer.de/)


Other Stakeholders






Bulk Purchases



???



Media Delivery

Apple on Campus ???

IP royalties



New Business Ideas

Personal Data

Apple



Media Industries

Sales Platform


Developer Community


Apple Users


Apple Communities

Goods & Services






Money & Credits

Activity Networks

Value Flow Mapping for Ecosystems Intangible Value

}


Information

Systemic representations




!

etc. !





Other Stakeholders






Bulk Purchases



???



Media Delivery

Apple on Campus ???

IP royalties



New Business Ideas

Personal Data

Apple



Media Industries

Sales Platform


Developer Community


Apple Users


Apple Communities

Goods & Services






Money & Credits



Activity Networks

Value Flow Mapping for Ecosystems Information

Intangible Value



!

etc. !




Apple’s Business Ecosystem (Excerpt) ®

Other Stakeholders Lowest Production Costs Sponsoring / Discounts High Volume and Planning Certainty

Manufacturing Knowledge

Service Contract Infrastructure Management IP royalties / Commission


Bulk Purchases

???



Media Delivery

Apple on Campus ???

New Business Ideas

IP royalties Personal Data

Apple Platform


Comission


App Purchases Sales Platform


Technical and Sales Training Higher Margins : Apple Price Premium Enriched User Experience



Higher Margins via Apple Price Premium TM

Goods & Services Money & Credits Information Intangible Value

9

It is not like …

It is more like ...

Service Ecology Map

COMPANY

DATE

STAKEHOLDER MAPPING WHO ARE THE STAKEHOLDERS?

Value Network Analysis (VNA)

COMPANY

DATE

VALUE NETWORK MAPPING THE KEY RELATIONSHIPS BETWEEN STAKEHOLDERS

EXAMPLE

EXAMPLE

VALUES MONEY LOVE

POWER

EXPOSURE

REPUTATION

ATTENTION INFORMATION

TRUST

EXPERIENCE

RIGHTS SERVICE

PRODUCT

CREDITS

EXAMPLE

EXAMPLE

VALUES MONEY LOVE

POWER

EXPOSURE

REPUTATION

EXPERIENCE

RIGHTS

EXAMPLES OF STAKEHOLDER ATTENTION EMPLOYEES

SUPPLIERS

GOVERNMENT

COMMUNITY

$

TRUST

SERVICE

PRODUCT

CREDITORS

INFORMATION

CREDITS

CUSTOMERS

Process Map, Net Map, Actors Map

Value Network/Ecosystem Mapping

Image Credit (in order of appearance): Allee, V. (2008). Value network analysis and value conversion of tangible and intangible assets. Journal of Intellectual Capital, 9(1), 5–24.; Design Thinkers Academy

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Your Challenge Ready for some action?

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Your Challenge: Call-a-Drone Other Stakeholders


FLY TO

ME

Just-at-time! pizza

s l a c i t u e c a m r a h p y c emergen g n i l u d e h c s l e c r a p P 2 P last m ile par rier u o c r i a cel del ivery

Airspeed transportation: delivered to your window - when you want it and where you want it.

Image Credit: CC-licensed “Quadrocopter” from kaffeeringe → http://www.flickr.com/photos/kaffeeringe/8722017781/

12

EX

Exercise I: Collect Actors/Stakeholders

IS C ER E

Title/Function of Actor Compatibilty with VP (positive, neutral, negative) Influence (size of indicator)

Primary Motivations

1 0 MI :0 NU 0 T

Time Horizon (throughput time) Actors Role

ES

Investment

13

EX

Exercise II: Group Actors

IS C ER E

Other Stakeholders



0 5 MI :0 NU 0 T Supplying and Enabling Network

ES

14

EX

Exercise III: Define Value Flows

IS C ER E

Goods & Services

Goods & Services

Money & Credits

Money & Credits

Information

Information

Intangible Value

Intangible Value

1 5 MI :0 NU 0 T ES

“

Economic community supported by a foundation of interacting organizations and individuals - the 'organisms' of the business world. [...] Over time they co-evolve in their capabilities and roles, and tend to align themselves with the directions set by one or more central companies. James F. Moore (1997)

„

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The Rise of Ecosystems New Rules for Value Creation

Contemporary Understanding of Value Propositions

“

Value propositions should be crafted: as a reciprocal exchange of value; described in terms of perceived benefits or reduced costs; transparent about to whom that value should flow and how; perceived as a fair exchange of value; delivered over a time frame longer than a single transaction; often co-created through interaction between two or more parties; and, congruent with the relationship objectives set for a particular market. Ballantyne, Frow, Varey & Payne (2011)

„

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Business Ecosystem?

“A value network model visualizes specific interactions within the network to provide a perspective for understanding value-creating roles and relationships, and to offer a dynamic view of how both financial and non-financial assets are converted into negotiable forms of value.” Elke den Ouden, Phillips Industry Consulting (2011)

Image Credit: http://www.elkedenouden.com/AboutElke.html

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Customer

Supplier

Godfather

Competitor

Intermediary

Enabler

Financier

Provider of Content

Provider of Goods

Marketing & Communications

Provider of Services

Provider of Systems

Align and Balance Value Flows

Goods & Services

Goods & Services

Money & Credits

Money & Credits

Information

Information

Intangible Value

Intangible Value

Apple’s Business Ecosystem (Excerpt) Hardware OEM's: e.g. Foxconn

Other Stakeholders Lowest Production Costs Sponsoring / Discounts Manufacturing High Volume Orders Knowledge and Planning Certainty






Bulk Purchases

???



Media Delivery

Content

IT-Infrastructure Partners: e.g. Akamai

Apple on Campus ???

New Business Ideas

IP royalties

Microsoft, Google, etc. Premium Services/

SaS Solutions

Software Purchases

Personal Data

Apple Platform



Personal Data


Higher Margins : Apple Price Premium Broad Service Station Covering

Retail/Certified Partners: e.g. Gravis


Official Accessory Manufacturers: e.g. Belkin

Goods & Services

Information Intangible Value

Developer Community


Enriched User Experience

Money & Credits

Media Industries

Sales Platform


Personal Data

Apple Users

Apple Communities


Inofficial Accessory Manufacturers


Apple Store Logistic Partners: e.g. TNT, UPS

22

Layers of a Value Web Hardware OEM's: e.g. Foxconn








Bulk Purchases

???



Media Delivery

Apple on Campus ???

New Business Ideas

IP royalties



Personal Data

Apple Platform



Media Industries

Sales Platform


Developer Community


Apple Users


Apple Communities

Goods & Services






Money & Credits Information Intangible Value

23

Apple’s Business Ecosystem (Excerpt) ®





Bulk Purchases

???



Media Delivery

Apple on Campus ???

New Business Ideas

IP royalties Personal Data

Apple Platform


Comission


App Purchases Sales Platform


Technical and Sales Training Higher Margins : Apple Price Premium Enriched User Experience



Higher Margins via Apple Price Premium TM


24

Virtuous Cycles Hardware OEM's: e.g. Foxconn

Lowest Production Costs Sponsoring / Discounts Manufacturing High Volume Orders Knowledge and Planning Certainty





Bulk Purchases

???



Media Delivery

Content

IT-Infrastructure Partners: e.g. Akama

Apple on Campus ???

New Business Ideas

IP royalties

Microsoft, Google, etc. Premium Services/

SaS Solutions

Software Purchases

Personal Data

Apple Platform


App Purchases

Personal Data



Retail/Certified Partners: e.g. Gravis


Official Accessory Manufacturers: e.g. Belkin


Developer Community



Apple Communities

Media Industries

Sales Platform


Personal Data

Apple Users

Comission

Inofficial Accessory Manufacturers

Apple Store Logistic Partners: e.g. TNT, UPS

25


Virtuous Cycles Lowest Production Costs

ponsoring / Discounts Manufacturing High Volume Orders Knowledge and Planning Certainty


Bulk Purchases

???


Digital Sales Channel DRM and wide Spre

Media Delivery

Content Apple on Campus ???

New Business Ideas

IP royalties

ices/ hases

SaS Solutions

Personal Data

Apple Platform


App Purchases Seamless User Experience

Personal Data

Apple Users

Comission

Sales Platform Technical and Sales Training

Personal Data


Developer Community


26


Virtuous Cycles Lowest Production Costs


ponsoring / Discounts Manufacturing High Volume Orders Knowledge and Planning Certainty


Value of the core offer

Bulk Purchases

Sales


Value of the total offer

Content

???

Profits

New Business Ideas

IP royalties

ices/ hases

Digital Sales Channel DRM and wide Spre

Media Delivery

Investment in the core innovation and capacity

Apple on Campus

???

SaS Solutions

Personal Data


Personal Data

Apple Platform Investment in

the business ecosystem



Sales Platform

Generic virtuous loop ofTechnical a business ecosystem and

Apple Users

Developer Community

Sales Training Personal Data



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Value Flow Mapping in the Design Process Abstract: Modeled World PRINCIPLES

5

6 PLANS

2

3

OBSERVATIONS

Analysis (Think)

Synthesis (Make)

7

1 4

TESTS

Concrete: Real World

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Q&A /// Feedback

STAY TUNED!

@Jan_Sc hmiedge n

www.uservalue.de 29

Attributions “Gears” symbol by Dima Yagnyuk // "Type Desgin" symbol by Andrew J. Young // “Compass” symbol by Adam Whitcroft // “Refresh” symbol by Joris Hoogendoorn // “Pointer” symbol by ___Lo // “Speaker” symbol by Harold Kim // “Book” symbol by Ahmed Hamzawy // “Unlock” symbol by Ugur Akdemir // “Heart” symbol by John Caserta // “Like” symbol by Marwa Boukarim // “Letter” symbol by John Caserta // “Lock” symbol by Dave Tappy // “Cess” symbol by Alessandro Suraci // “Social Services” by Jack Biesek, Gladys Brenner, Margaret Faye, Healther Merrifield, Kate Keating, Wendy Olmstead, Todd Pierce, Jamie Cowgill, Jim Bolek // “Building” symbol by Antonis Makriyannis // “Brain” symbol by Arjun Adamson // “Building Block” symbol by Michael Rowe // “City” by inna belenkey // “Basket” symbol by Roman J. Sokolov // “Unlock” symbol by Ugur Akdemir // “Hand” symbol by Jakob Vogel as well as "Home" and "Umbrella" from The Noun Project collection. -----------------------------------------------------------------------------------------------------------------------------------------------------------Some References this Workshop/Presentation was based on: Adner, R. Amazon vs. Apple: Competing Ecosystem Strategies. Harvard Business Review. Retrieved August 11, 2013, from http://blogs.hbr.org/cs/2012/03/amazon_vs_apple_competing_ecos.html. Brandenburger, A., & Nalebuff, B. (1996). Co-Opetition. New York: Doubleday. Caulfield, B. Apple’s Ecosystem. Forbes. Retrieved August 11, 2013, from http://www.forbes.com/2010/02/09/intel-nvidia-htc-technology-business-intelligence-apple.html. Dachis, J. Apple, a Love Note: The Power of an Ecosystem - Dachis Group. Dachis Group. Retrieved August 11, 2013, from http://dachisgroup.com/2010/01/apple-a-love-note-the-power-of-an-ecosystem/. McCann, J. It’s The Ecosystem, Stupid. subPrint Interactive. Blog, . Retrieved August 11, 2013, from http://subprint.com. Moore, J. F. (1997). The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems. New York: HarperBusiness. Moore, J. F. (2013). Shared Purpose: A thousand Business Ecosystems, a connected Community, and the Future. Ng, I. C. (2012). Value & Worth: Creating New Markets in the Digital Economy. Ng, I. C. L., & Smith, L. A. (2012). An Integrative Framework of Value. Review of Marketing Research, 9, 207–243. Ouden, E. den. (2011). Innovation Design: Creating Value for People, Organizations and Society (1st Edition.). Springer London. Senge, P. M. (2006). The Fifth Discipline: The Art and Practice of the Learning Organization. New York: Doubleday/Currency. and many more …

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About me … I am a Berlin-based innovation facilitator who helps organizations in strategically implementing service design, business model innovation and (branded) Ux methodologies, processes and tools.

Besides my advisory practice I am a »HPDTRP« research fellow at the Hasso-Plattner-Institute Potsdam, examining Design Thinkings level of diffusion in organizations worldwide.

My work is mainly based on the discovery of shared value which I researched at Berlin University of Arts and Zeppelin University Friedrichshafen.

I’m also co-developing GlobalWasteIdeas.org, an ideasharing and collective intelligence platform dedicated to catalyze innovative ways to deal with waste. @Jan_Schmiedgen 38

Design-driven strategic business planning Jan Schmiedgen // Fidicinstr. 41 // 10965 Berlin // GERMANY // +49 173 3 83 15 26 // [email protected]

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Business Ecosystem Design

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