Stefan Gross-Selbeck: Business model innovation - beating yourself at your own game

Stefan Gross-Selbeck: Business model innovation – beating yourself at your own game

earlier this summer taxi drivers across Europe went on a strike they literally blocked the streets not only in Berlin but alonein Paris a few other places the reason they did so was they protested against uber calm now uber as many of you will know is putting together people looking for a ride with people offering a ride for a fee that's a pretty big change it's creating a whole new market so not surprisingly taxi drivers are unhappy it turned out however that the strike was a really bad idea because on the day of this strike because of all the awareness it created the usage of uber jumped by 800 percent in a single day there's a couple lessons in this build story one gets you're compared to the PR for you and you're in a good shape to one's disruption is underway there really is no stopping no strike in the world will keep people from using uber three Buber is yet another startup disrupting a global multi-billion dollar industry if you think about it that's actually interesting how come one of the global car companies didn't come up with the idea they certainly had the resources how come I started up consisting of just a few people and barely any resources can out-compete a big global company when it comes to digital innovation part of the answer lies in the economics of digital innovation it has never been as easy and as cheap as today to launch a digital product or service marketing platforms like Google and Facebook open source software frameworks like Ruby on Rails all of this has contributed to the it's never been as easy and Sheba's today to launch a digital product in other words size does not matter when it comes to digital innovation but there's a second reason to this I have personally worked with startups so many years as an investor as an advisor as a manager but I've also run a billion-dollar business myself and I'm a consultant to people running large organizations with tens of thousands of people and if there's one thing I've learned then that startups are not just small versions of big companies they're different the key difference between a startup and a big company is that a start-up does not have a business model it's in the process of discovering a business model and that's at the core of its disruptive force because the digital age disruption doesn't really come from technology it comes from companies being able to take one part of the value chain redefining it and on that basis rebuilding the business architecture of entire industries uber may have started as a little app to call a taxi today it's effectively a tool to manage access capacity in millions of cars across the world and tomorrow it may actually turn the global logistics industry upside down because it has a global city-by-city network to do blast apologetics in other words uber has discovered new business models that's what they were doing day and night it's what they had to do in order to survive in big companies life is different the companies are big for a reason they're big because they've done a really good job executing that isn't a small and as we all know executing a business model it's not easy right you have to which cause drive productivity do incremental improvements all of that and as a matter of fact management science and all these management books have provided us with all these tools for the last century really to help us execute business models budgets scorecard its operating plans KPIs processes hierarchies you name it all of these are tools to help us execute business models so big companies are execution machines but discovering a new business model is a whole different thing and requires a different skill executing is about optimizing a value chain but sort of taking it as a given but discovering means fundamentally questioning your value chain and putting it together in a whole different way and uber is just one example just think about what air bhindi Airbnb is doing to hotels or all the startups and the financial services space trying to just intermediate banks as we speak so the question then becomes can you do both can you execute a business model and just cover a new one at the same time well it turns out some companies can an example is Netflix Netflix started by disrupting the video rental business they replaced rental outlets through mail order and then they executed really well and built a multi-billion dollar business on that basis but then with the rise of broadband internet they took a radical decision they decided to disrupt themselves and they discovered the new business model of distributing video using streaming media and with a data-driven approach they may well be in the process of disrupting the television business next and who knows maybe one day the movie business so Netflix seems to be able to do both execution and discovery but if we're being honest most companies find it difficult and that's a problem it's a problem because in the digital age disruption can happen anytime anywhere do you think the taxi drivers saw it coming some American start-up disrupting the global taxi business without owning a single car not seriously so view a manager in a big company you should help your company improve their skills to discover new business models and the most obvious place to look is look at those companies who do this day and night to do this for a living who do this in order to survive so look at startups from the many years I've worked with startups I think there's numerous they companies can learn for example speed focus but the single most important thing a big company can learn from a start-up and should adopt from a start-up is mindset now let me tell you what I mean the first is an attacker mindset ask yourself what does it take to disrupt your business model take your value chain and cut it into pieces and put it together a different way Netflix will not have gone into streaming media had optimized the existing rental business to an agile mindset many of you will know the concept of HR from software development where it replaces the traditional waterfall process of software development but really agile means so much more it means acknowledging you don't have all the answers it means being willing to experiment it means taking a new product out to your customers as fast as you possibly can in order to get feedback into it write down the solution one of the most impressive examples I have seen of an a drug process recently is on this picture I don't know if you can see it I've took this picture of the summer in Belen at a little exhibition of prototypes and what this is is this is the original first prototype of Google glass and look how simple it is it's just a plastic frame it's got a phone glue to it and a a camera and a bunch of cables should go into laptops the guy who built this was in the room and showed me around so I asked him how long did it take you guys to build this and his answer was one afternoon so here's my challenge for you take a really big idea like Google glass and turn it into something you can take out your customers in less than one day three if failure is okay kind of a mindset typical corporate environments a really bad place for failure just think what happens you're gonna miss you but your KPI isn't going to look horrible you know right all these reports to controlling explaining why exactly you failed at what you're going to do to never fail again otherwise it's going to be really bad for cheap beer sounds familiar right in startups failure is sort of part of reality it's part of their DNA if it's part of what they expect to need to be doing for example a couple years ago there was a startup called OTO and they built as a product a platform to manage podcasts you could upload your podcasts you could manage them you could listen to them problem was it didn't really work users didn't care it didn't have any traction and so the team took a radical decision they decided to kill the old idea and build a whole new product from scratch and they called it Twitter and so they built the Twitter which you all know and love today but without their ability to acknowledge failure and to manage it there would be no Twitter my favorite quote sort of summarizing this whole digital transformation comes from Marc Andreessen who famously said software eats the world and so view our manager in a big company I think you have a choice you can either try to look and learn from startups and improve your ability to discover new business models or just sit back and relax and watch our software eats the world until someone made your lunch thank

6 thoughts on “Stefan Gross-Selbeck: Business model innovation – beating yourself at your own game

  1. Рассказываю, как легко получать пару раз в день до 60 долларов на свою банковскую карту. Смотрите видео на моём кaналe

  2. Excellent advice for managing in a world full of disruptive technological challenges. CEO's's need to selectively forget the past, and think of how they can lectively 'disrupt' their existing business models to meet future demands .

  3. He's correct Uber has redefined the whole taxi business model. Here in India, people used to use their private vehicles as cab because there were different tax structures on taxi registered vehicles. This made the whole market unorganised and it was hard to figure out which car was a taxi and which one a private vehicle. After coming up of companies like Uber, the industry has become more organised plus the usage of autorickshaw (or tuktuk) has decreased which not only a safety benefit but also environment benefit. Moreover, this has made price more structured in this industry and reliability over such vehicles has increased.

    Cheers to Uber!

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