Business modelling — Do you have the narrative to your numbers?
If you’re operating under increasing demand to deliver value and innovation within a tight budget, or trying to find the best way to evolve to create a robust future then business modelling is an excellent place to start. I’ve been using technology to create new business models for more than 20 years now — it’s why constant change is something I’m very comfortable with and consider essential to creating a robust business. Indeed, this is the principle behind my company tagline : ‘Making it work in an evolving world’ and one of my key areas of work with startups and large corporates.
Throughout my career in media the business model rug has routinely been pulled out from under our feet, usually by technology. In the mid-90’s it was the arrival of chat forums, advertising boards and the first websites. Then again in 2004 when web 2.0 brought us dynamic pages, display advertising, user generated content, blogs, vlogs, etc … The products and services we’d been successfully selling for years became redundant as all our customers (readers, subscribers and advertisers) moved away from print and embraced digital. Our business model had to evolve in order for us to survive.
I’ve come to embrace business modelling as something that you must be good at in order to proactively drive your business rather than reacting to new waves of technology and the sometimes fickle winds of markets. Just as with trees, it’s better to be supple and be able to move with the breeze than be rigid and risk being snapped in a storm.
Joan Magretta, at the Institute for Strategy and Competitiveness at Harvard Business School describes a business model as “a good story that explains how a company works.” It is “the narrative to the numbers.” Joan Margretta makes it sound easy, but as the financial journalist, Michael Lewis, says, “Like art, many people recognize it when they see it, but can’t quite define it.” I often share these descriptions when business modelling with clients, but I like to evolve them a little in our work.
Business modelling is a skill — one that can be learned and can also help envisage ALL the possible ways and combinations a company can generate value and revenues. That’s why I often ask people to view their business model as a Rubik’s cube — not a flat or single-story narrative that the Osterwalder business model canvas can sometimes lead to.
Your business model should be seen as a multi-faceted tool that you can get good at learning to play and be creative with; to twist and turn to find the right way of organising your business, based on where you want to take it (your vision & goals) and the context in which you’re doing it (the market), your customers, partners and your competitors moves. This is far more complicated than solving a Rubik’s cube because there is no one solution. The aim is to get really good at playing it and finding the right configuration for the right time, and have other options in your pocket for when things suddenly change.
When I started at The New York Times in 2000 the business model was primarily advertising revenue driven. When I left 16 years later we’d introduced the first paywall for subscribers in international markets (today digital subscriptions is the Times’ primary revenue model) and created many new ways to use technology to unlock value and revenues from existing content, assets and communities.
Pulling on my experience of evolving business models I’ve twice been asked by Google’s Digital News Innovation (DNI) program to help them identify funding applicants that are using technology to create or to diversify business models and build robust futures for themselves or their customers. Having reviewed hundreds of proposals I can tell you I know probably just about every possible model to date: Freemium, Fractionalization, Bricks & Clicks, Crowdsourcing, Low Touch, …. but that’s just it, with technology and customer needs forever changing there is always the possibility and need to create new models.
Business modelling can also help startups and large organisations determine where to focus their budgets; something that is essential when you’re operating with minimal funding, or having to manage in tough economic circumstances.
Choosing where to invest resources and when to stop investing, or shift them elsewhere is a common audit/report request from my corporate C-suite clients. For startups the challenge is often trying to decide which of your many ideas to focus on first. Determining which will bring customers and revenues helps support the decision-making process. This is why accelerators bring me in to run business modelling workshops. I’ve mentored multiple cohorts at the Superangel & Storytek accelerators in Estonia, Katapult in Norway and for Media House, the Media Maker and ESSEC accelerator in France. At a corporate innovation level I’ve coached Total’s 50 female entrepreneurs in their Startupper Challenge and supported the Inside LVMH’s programme.
“Having worked with numerous business model mentors over the years, Kristen is by far one of the most thorough and methodical ones. She really takes the time to get to know the teams and addresses their specific challenges, speeding the progress almost visibly. She was one of the few mentors who visited teams twice during the Storytek programme — first in the beginning and then at the end and was always at hand in the interim when they had any questions or hesitations.” Maarja Pehk, CEO @ Latitude59
If you’re facing the challenge of an increasing demand to deliver value and innovation within a tight budget, or trying to find the best way to evolve to ensure a robust future then your business model is an excellent place to start. If you would like to learn more about how we can work together on your business model and make it work for you in an evolving world get in touch via the contact form on cinqc.co or reach out via LinkedIn.
To learn more about my work check out my article on Coaching, Mentoring and making great mistakes.
