From the 3rd till the 14th of December the United Nations Climat Change Conference was held in Bali. Again loads of attention were given to the subjects of sustainability. Nowadays the topic has really found grounds in society; it is even fashionable to concentrate on environmentally friendly goods and services.
In this light there is a new way of designing goods, called cradle-to-cradle. The concept is launched by Wiliam McDonough & Michael Braungart in their book Cradle to Cradle: Remaking the Way We Make Things. They advocate in favour of uncycling, not recycling. Why settle for the least harmful alternative when we could have something that is better–say, edible grocery bags! They offer several compelling examples of corporations that are not just doing less harm–they’re actually doing some good for the environment and their neighborhoods, and making more money in the process.
The basic idea behind the book is that we should eliminate our environmental footprint as much as possible. The book itself is a great example of the concept. It is designed in a different way than we are used to. It is printed on material which can be fully uncycled; the pages can be cleaned so that the ink can be re-used, the pages itself can be re-printed and fully re-used. In essence it is all about design.
Cradle to cradle requires re-thinking each part of the design, and the design as a whole. Using it as the new standard for design will lead to a necessity for innovating our business models as well. Firms core capabilities need to change, possibly also the partner network, leading to a re-newed value configuration. Companies applying the cradle-to-cradle philosophy will be able to create different, more intense, relations with their customers. Applying cradle-to cradle brings maximum benefits combining it with a new business model.
[pro-player]http://www.youtube.com/watch?v=IoRjz8iTVoo[/pro-player]
Recently, perhaps in a reaction to the iPhone, buzz started to spread that Google was also working on a mobile phone. Many different blogs showed pictures that were leaked to the press. Of course Google’s Business Model is all about generating traffic, and more important offering adds to this traffic. The PC Internet market is pretty covered… and where to find a new source for traffic… the mobile phone!
Let’s start with a small rectification on the buzz: the is not going to be a Google Phone, but a Google Mobile Phone Operating System called Android.
Since a couple of years the so-called smart phone is becoming increasingly popular. HTC has set the standard with their Windows Mobile operated phones. Companies like Nokia are also trying to get a piece of the pie with their Symbian operating system based phone, such as the E-series from Nokia.
So the market is quite mature so why would we consumers go for this latest gadget by Google?
First it will probably be the must have gadget for 2008 (launching Google Android enabled phones in Europe probably mid 2008). Second, the thing Google is great at, and what we users like, is that the company is able to integrate the whole lot into a new experience. And the best thing is that with running Google Android as an operating system on your mobile, when you need an additional tool, this tool will available free of charge. Google Android is open source. The software development kit is free of charge. And at the moment you read this someone somewhere is already building the killer app you want on your mobile. Google has reserved 10 million dollars, in chunks varying in amount from 25,000 till 275,000 for people that develop applications that are picked up by their panels of experts. Doing so will stimulate to formation of a community, and boost innovation.
[pro-player]http://www.youtube.com/watch?v=g4m73NXn7hY[/pro-player]
For their latest album the band all bands want to be, Radiohead, has taken a totally different approach for bringing it to market with a new business model. Artist linke Prince and the Belgian singer Sarah Bettens have experimented with including their latest CD with the Saturday’s newspaper, respectively the Daily Mail in the UK for Prince and De Morgen in Belgium. The number of newspapers sold almost doubled in Belgium.
Radiohead’s In Rainbows can now be obtained in two ways; downloading the CD and a Discbox, which includes a vinyl album, bonus CD, and assortment of other trinkets, both ways only available through the In Rainbows site. Radiohead is able to do so because it is not tied to any record label at the moment. The new CD is offered on a “it’s up to you” basis, letting the fan downloading determining what to pay.
comScore, Inc. has released a study of the online sales of In Rainbows. Their study is on the first 29 days the album was available. In this period 1.2 million people visited the In Rainbows site. A significant portion of them downloaded the album. Off all people that downloaded the album 38% was willing to pay, with an average of 6.00 USD. Further the study showed that in percentages fans from the USA are more willing to pay for the download and also a higher amount.
Looking at it from a Business Model perspective Radiohead innovated it both from the Client Perception side (choosing a different distribution channel), as well as from the Eco System side (not working with a record label, changed their partner network, and their core capabilities from making great album to also publishing them). This all has resulted in different cost and revenue streams still with financial success.
For more info please see one of my previous posts about a generic business model.
As mentioned in the former post this blog focuses on new ways of delivering value. In delivering value there has to be an understanding of what value is and moreover how it is created. On the creation of a generic business model, suitable for discussion on how to innovate it, Alexander Osterwalder PhD has done great work. He has done his PhD research at the University of Lausanne in Switzerland. His work can be used as a starting point for innovation in the heart of business itself, the business model. The ways in which new value can be achieved is very much dependent on the ambition level of a company and the phase it is in in the innovation growth model.
Please find a high-level graph of a generic business model below (adapted from Alexander Osterwalder).
