Previous
¶ Business Model Evolution
¶ What it is
The business model is vital to the trajectory of our product. A business model that strongly aligns with customer value, operational capacity, and capability will propel us forward. As such, the business model will need to change and evolve as the product evolves and we target new customer problems and target audiences.
¶ Why it is useful
Good product strategy contributes to business goals, offers explicit business models, and creates a strong comparative advantage. Operations also help differentiate companies, but products set the preliminary foundation of strong business models. Thus, whether our products fit or set up a robust business model is one criterion for determining future steps.
¶ When to use it
Business models should be reviewed regularly and need to evolve when the old model stops performing well or when we significantly develop products or strategies requiring a new foundation.
¶ How is it done
- Refer to your Business Model Canvas and Business Model Design (covered in the Validation chapter).
- Regularly review and map out how each part of your business model is performing, how synergetic they are together, and what changes you see in each area of the business model as the product develops.
- Once significant discrepancies appear, either within an area of the business model canvas or between several areas, it is time to review and redesign the business model as the system of operations for the business.
- Run through the relevant vital exercises (covered in the Validation chapter) and find a new Status Quo that can support your continued growth and development.
¶ Do's & Don't
Do's
- Regularly (e.g., quarterly) run a comprehensive business model review.
- Deep dive to understand which aspects are changing.
- Try to diagnose change early when the first signals appear. Analyse weak signals to understand in which direction they might point.
Don't
- Don’t change aspects of the business model in isolation. Always holistically review the implications of changes on the whole system of action.
¶ Tools needed
- Business Model Canvas
- Whiteboard(Virtual)
¶ Example
