The social life of a business model ?

This thorough article points to the diverse audiences for business models and and argues that they are “devices” which enable the exploration of a market (through receiving feedback on a presented model)  and that through such display, models contribute to constructing the networks of an innovation.

It is obviously encouraging to hear their arguments concerning how models are not pure abstractions but have some kind of existence in the world. The article is not freely available so I will quote liberally:

Like demonstrations, business models aim at providing evidence for the feasibility of an innovative project and at gaining the interest of third parties by mobilizing the repertoires of both proof and persuasion, and the logic and rhetoric elements that they include.

In this perspective, understanding what business models do requires considering not only the object that they represent (a new venture), but also the audience, for which this object is made visible and put into words, and which is “constructed contemporaneously with the demonstration”.

Business models are performances – encounters in which an entity is materialized in a particular form (often a Powerpoint presentation) and displayed, exhibited to an audience.  They are also relational tools, for they enable such encounters and thus a mutual adjustment between the artefact that is being demonstrated and the public to which the demonstration is offered.

Liliana Doganova & Marie Eyquem-Renault,Research Policy  (2009): What do business models do?  Innovation devices in technology entrepeneurship

Demonstration of making a big bubble with a hula hoop
Another kind of demonstration... relational and persausive too. Image by eclectic echoes (Flickr) some rights reserved.

Three dimensional, dynamic Business Model Canvas

Is it helpful to suspend a mobile version of the Business Model Canvas?

exploded business model canvas hanging on string

If a canvas is three dimensional,  what should be the relative heights of the nine blocks?

exploded business model canvas hanging on string

In this mockup, it is “uphill” all the way from Key Partners to Customer Segments?    Is this more true for some companies?

exploded business model canvas hanging on string

These blocks are hanging independently, so that they twist and turn. Is this distracting or is such instability appropriate?

exploded business model canvas hanging on string

Apologies for forgetting to hang up the section that featured the creative commons license information in relation to Osterwalder‘s canvas.

Suggested qualities of a “tangible business model sketch”

Here are five guidelines for developing artefacts for opening up and provoking about business logic (as Jacob Buur and I set out in this publication):

(1) It must be possible to establish a good alignment between real business variables and the physical entities of the model.

(2) The model must be dynamic; things should move and change to allow for experimentation.

Four castors on a table decorated with Play-doh
These wheels could be spun and repositioned. The Play-Doh decorations could also be adjusted.

(3) Tangible business model sketches should allow a variety of interactions that will alter the outcome.

(4) The fact that the model allows for unexpected and unforeseen ways of functioning should be seen as a strength, as it fuels engagement and discussion. In a sense one needs to design for the unexpected.

Adjusting balancing bags, hooked on a large mobile
This mobile by Magdolna Puskás and Soila Paivikki Oinonen challenged participants to balance different resources within a company

(5) The model should offer a tricky challenge to overcome in collaboration between participants (e.g. finding the balance, or guiding most customer marbles in the right direction).

Marbles about to be released to roll down through pinball machine like obstacles
What will happen when these marbles are released? (model by Jessen, Santos & Mitchell)

(6) What else?  Should a tangible business model sketch look serious and professional? Or playful and creative?

Some of the talented graduate students that have been making some of these artefacts have interesting blogs in which you can hear their perspectives on this approach to business modeling, have a look at these posts from Smaranda Calin and Raitis Linde.

Tangible business model canvas (ready-made)

SPIRE has developed an activity for provoking richer shared understandings of, and new perspectives on an organisation’s business model. The activity was tested succesfully in a workshop for Danish industrialists and innovation consultants.

industrialists interacting with tangibles on a business model canvas

industrialists interacting with tangibles on a business model canvas

Shortly, we will report in more detail on participants’ views of the activity – watch this space or subscribe to this blog for updates. In the meantime, here are some instructions if you would like to experiment with tangible business modeling on a canvas yourself:

metal objects on a business model canvas

The method:

  • Arrange a variety of bric-a-brac objects on a worksurface which depicts the Business Model Canvas*. Place at least one object in each ”cell” and use thinner/longer items (e.g. wire, string, straws etc) to connect some of the different cells.
  • Ask participants how appropriate the objects you have placed are (as representations of aspects of their business).
  • Encourage them to make and explain adjustments so that the tangible model describes their business better. This could mean swapping objects between cells, altering or combining artefacts in some way or using any available additional objects.

*The Business Model Canvas was developed by Alexander Osterwalder. It is currently the leading template for describing the different aspects of a business. It is used under a Creative Commons license and may be downloaded here