This post is an extract of my forthcoming book on business model innovation. The innovation book looks at why business model innovation is needed and how it works. You can read more about it here. These posts are early drafts of planned content and I’m putting them out to get feedback. Please do comment below, or subscribe to these pages to get each new section as it is published. In today’s post, we will be looking at finding opportunities in this new world.
The other major error in business model innovation, other than not starting at all, is thinking too small.
This comes back to some of what we said about the difference between incrementalism and step changes in performance.
Years ago, I did the Everest Marathon. We flew into Lukla on a small plane, over the crash site of the plane that had tried to land the previous week. The Everest marathon starts at Everest Base Camp, 19,000 feet or so. It then covers 42 km back down the valley to Namche Bazaar.
Everest Trekking
To get to the start took us 10 days of trekking. It wasn’t fast because our bodies needed to acclimatise to the lower levels of oxygen. Even with this, I foolishly decided to do a 100m spring at Everest base camp. I was about as fast as normal – which was good, given the rocks and ice – but then I ran out of oxygen. If you’ve seen some of the Mafiosi films where the victim has his face wrapped in cling film and desperately tries to breathe, you have some idea of what I was feeling. Red hot lungs, shuddering gasps, and no oxygen coming into my chest.
It took almost 30 minutes for my breathing to return to normal after a twelve to fifteen-second exertion. Horrific.
As we walked up to the start line, we kept reaching new crests, new vantage points, and there were so many points where I said to myself – this is perfect. One was the corner as we walked up past Namche Bazaar and caught sight of Ama Dablam set against a deep blue sky in icy pointed splendor.
It would have been easy to stop right there, thinking that I didn’t really need to go higher.
There’s a tendency to think that because we can make something better with business model innovation that we can be disruptive that we have finished the work.
All it means is that we have found a local maxima. We have found a mountain peak that fits our needs that solve the problem, that is certainly higher than anything else that we have seen so far.
Temptation
There is a temptation to stop here and not climb higher, not push further. Isn’t it good enough, you may ask? For some, it will be but think back to why we are doing this.
We are committing ourselves to business model innovation to escape from competition for a while. The further up we go, the longer it takes for people to catch us.
Why don’t we launch the exercise, get ahead, wait for them to catch up, then repeat?
You can, but most people who know the parable of the tortoise and the hare know how that turned out for the hare.
When you race triathlons, there are some interesting psychological effects at play. In a triathlon, you swim, then run to your bike, jump on it, then cycle for a long time. Then you quickly get changed and start running. The entire process is designed to push you to the limited of your endurance.
Once you are on the marathon, often 6 – 8 hours after you left the start line, there are aid stations every few kilometers. They supply ice, candies, bananas. All the useful stuff to keep you moving forward. Studies have shown that if you stop at these aid stations, it is far harder psychologically and physiologically to pick your speed back up again. The less you slow down, the faster you are able to keep going.
This same psychology applies to when you are searching for business model innovations. The cost of getting started is so huge that losing momentum comes at a significant cost. It is better to keep going, to say, “Yes, this small peak is nice, but Everest is around the corner if we just keep going.”
And for me, it was.
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