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I’m reading Simon Sinek on Infinite Games at the moment. If you haven’t read it he draws on the idea of finite versus infinite games. A finite game is one where the rules are clear and it’s easy to tell if you are winning. An infinite game is one where the game itself changes over time.

That’s where I’m going to leave Simon and go off in a different direction.

I was working with a manufacturer of commercial vehicles yesterday. He was moaning about he was being out competed by lower cost Chinese manufacturers. We’d been talking about the problems of industry assumptions and it was a small jump to the idea of the infinite game.

His company has been playing a finite game for the last few decades. Do X, do Y and sales grow and shareholders are happy.

The Chinese, in this case, are playing a different kind of game It’s a low cost finite game. Imagine the confusion that happens on the pitch when one team is playing football and the other is playing rugby (I’d put my money on the rugby players – they can pick up the ball and run with it. The football players can’t tackle then without fouling).

We didn’t find an answer in the session to my truck manufacturer’s problems. The strategic direction was clear though. Either start playing an infinite game so that whatever game the competitors are playing becomes irrelevant, or come up with a new game that makes them as vulnerable and as helpless.

What I do know is that when you need to change the game looking at the business models is a great way to start understanding the rules of the game. No, not understanding, making them explicit so that they can be challenged. 

That is the first step in the process of getting out there and screwing with their heads as we start to play a new game.

A couple of things – I’m now doing my webinar series in house for corporations and business groups. If you’d like me to come and speak let me know. (At a recent talk for Vistage.com CEOs 100% of attendees took away valuable insights and I got a 9.2/10 rating for the quality of my content!)

Secondly – I’m mulling ideas for a book. Here are my two ideas – but welcome to hear other suggestions

1. Strategy for beginners – a step by step guide to making better business decisions
2. Strategy for start-ups – how to build a start-up on the basis of sound strategy and validated assumptions

What do you think?

Finally I always come back to the amazing quote by Nietzsche “We must have chaos within us to give birth to a dancing star!”. Hold your chaos close but don’t let it overwhelm you 

Denis

If you haven’t already been to one of our business model innovation webinars do come and join us.

Every other Tuesday (next is on 27th October)
New York 8 am;
London 12 pm;
Singapore 8 pm.

• Digitalise Your Business For Explosive Growth
• What is the Tencent Business Model?
• An Entrepreneurial Start to The Day: Morning Routine
• What Are The Key Resources Needed To Deliver The Value Proposition?
• What is the Apple Business Model Canvas?

What’s it like to be burned at the stake? If you were lucky it didn’t hurt much because you’d already been strangled before the first faggots were lit. (And no, faggots here are a bundle of wood, not a pejorative term.)
 
This is the fate that Galileo faced when he declared that the Earth moved. I think that there is an awful lot of nonsense about Galileo being a hero. What his story does show us is that at that time the old idea of the sun and stars being encased in crystal spheres was starting to lose a lot of its storytelling power.

(Though for the true believers it’s worth pointing out that the old system was still a lot better at predicting the motion of the stars for decades after Galileo.)

Thomas Kuhn was fascinated by the process of how we (Western Europeans) changed the way that we saw the world in these decades. How did science take us from one view of the world to another? 

It certainly wasn’t an orderly transition based on logic (if so you’d be going, “So who is QAnon?“)

It’s a transition based on emotion and belief. We see that same process happening with business models.

Most business models are like a five-dollar note. They have value because people believe that they have value. Think of the value of the triangle trade in slaves and the opium trade to China after people stopped believing in them.

We see the same things today as big oil and the automobile industry struggle with the fact that the weltanschauung is changing and their old business models are not included in the new world view.

So when we look at business models it’s worth considering what are the beliefs that give them power? How are those beliefs changing? What will replace those beliefs?

What are some truths that support industries worth billions of dollars? How are they changing? How can you hasten that change?

If you haven’t already been to one of our business model innovation webinars do come and join us.

Every other Tuesday
New York 8 am;
London 12 pm;
Singapore 8 pm. 

• How Do World Views Changes?
• How A Business Model Is A Social Construct?
• The World is Changing
• Why Do Some Entrepreneurs Succeed? Part 2 – The Execution
• Joy Killerz Kill Change So Execute Them

I was always a big fan of Conan The Barbarian – The Robert Jordan books were better than the films.

If you haven’t read them, Conan smashes things with his big axe in sprays of blood and is rewarded with success, gold, princesses, whatever.

I’ve been doing startups for twenty years now. One of the things that I see entrepreneurs do is focus on the problem and create wonderful, wonderful products services and value propositions to solve it and create customer value.

It’s beautiful and still, they fail.

Certainly, it’s better than building pointless solutions to problems that no one has, but it is still grossly inefficient. 

Larger corporations are no better…

The creativity in the entrepreneurial process often remains in the design of the value proposition. 95% of the startups and models I’ve looked at over the years have that problem.

Where it should lie is in the business model. There are two reasons for this.

In most opening markets there is a vast amount of competition. Like Conan, you have to kill them if you want to be market leader. Luck, big muscles and some talent definitely help. But when you make your business model into an axe designed to dismember it’s so much easier.

Secondly, In competitive markets, everyone else has the same access to capital and talent as you do. So having clever folks working for you is a temporary advantage as everything reverts to the mean – look at how investment banks lost their brightest to tech!

This is why we focus on helping companies design weaponised business models. A weaponised business model creates market space and disrupts the attempts of competitors to follow.

What could be better? Conan the rose giver? I’d agree with that – but that’s for a very different market.

Which do you think are the best weaponised business models?

If you haven’t already been to one of our business model innovation webinars do come and join us.

Every other Tuesday (next is on 13th October)
New York 8 am;
London 12 pm;
Singapore 8 pm.

• The Ultimate Guide to Creating Powerful Business Models
• Rubber Sheet Theory of Business Models
• Business Model Lifecycle – Innovation
• The Business of Giant Killing (and Using Business Models as the Axe)
• Business Model Design & Customer Value

I don’t know if you remember the story of Jack and the Beanstalk. 

In it Jack climbs up into the clouds, he meets the giant in his house, gets chased by him. Then as the giant cambered down the beanstalk he chops it down whilst the giant is vulnerable.

Boom! Jack gets the gold and the sobriquet of giant-killer (Sobriquet being a word I’ve never written in polite company before).

What does that story tell us?

1. Don’t fight a giant in his own house,
2. Fight him when he is vulnerable.

This ties back to the maturity model of a company. From my research, the innovation cycle goes like this:

1. The market opens up;
2. Thousands of new entrants crowd in with a variety of business models;
3. The market coalesces around a small number of business models that maximise value;
4. It stays like this for a long time until the external environment starts to show weaknesses in business models;
5. The industry tries to change; or 
6. More likely a company comes from outside and exploits the market changes to create a new business model and opens up the market.

I’m not going to go into lots of case studies here, but as I wrote the above I was thinking about the automobile, airline, legal and advertising industries.

So when do you come up with a new business model – or set out as a giant-killer,

It’s at points 2 or 5.

At 3, what you want to do has probably been tried and most competitors have got too much traction for you to overcome. 

At 2, you are often in a big crowd – and if you haven’t weaponised your business model you are in an execution/ luck bloodbath.

At 5, you actually have a lot of opportunity as the giants of the industry are off-balance on the beanstalk and can’t counter the tiny chops of your little axe.

The question is when does 4 become 5. When does a business model become vulnerable to a giant-killer?

Think on that and send any thoughts and comments.

More thoughts next week.

If you haven’t already been to one of our business model innovation webinars do come and join us.

Every other Tuesday (we have one tonight!)
New York 8 am;
London 12 pm;
Singapore 8 pm.

• The Ultimate Guide to Creating Powerful Business Models
• How to Kill Google
• Weaponising Business Models
• Business Model Lifecycle – Innovation
• Business Model Depreciation

The other week I was helping a client prepare a pitch for Sequoia and GGV Capital. Sequoia is famous for asking the question “Why now?” to people who pitch. One way of looking at this is,

“Why should we invest in you now?”

A far more interesting approach is,

“Why should we invest in your industry or market now?”

A few days later I was preparing some slides for a client and noticed a pattern across a number of companies that have done well – including Airbnb, Google, Uber and more.

In each case, they had realised that they were able to offer something as a low-cost commodity that had previously been scarce. 

• Google discovered how to gather and commoditise expensive to research consumer behaviour;
• Uber transformed scarce and expensive to collect data on where consumers were and made is costless and instant;
• Airbnb ignored a market of scarce hotel rooms and made every room in a city a potential place to stay the night.

This is a rule, it may or may not be generalisable. It’s almost certainly not universalisable and it is definitely not the only rule that could apply.

That said, it is not a bad place to start when looking at a business model or problem.

What was scarce and now is not?
What was abundant and now is not?

Maybe futurise it. Then run with it.

Enjoy playing with this.

If you haven’t already been to one of our business model innovation webinars do come and join us.

I Help Blind Companies See

It’s easy to be blind.

The more you specialise and focus

The blinder you are

The most valuable advertising company is not an advertising company

The most valuable car company in the world is not a car company

The most valuable film company in the world is not in Hollywood

The most valuable space company is not a military contractor

The most valuable retailer is not a shop

The most valuable hotelier doesn’t own hotels

The most valuable technology company doesn’t make computers or phones

Companies are Blind

This pattern repeats again and again throughout history

Innovation bypasses incumbents because they see through the lens of

‘this is what we do ’

Thomas Kuhn, Schumpeter and Kondratieff all had the same insight

Innovation comes from the margins

And when it does it typically creates companies that are

10 to 100 Times More Valuable

than the companies that they replace

You Will be Replaced

Disruptors replace incumbents because incumbents are blind

You are blind

You will be replaced

Your business model is doomed

The question is not if… …but when

What are you going to do?

• How to Survive Business Model Disruption
• Business Model Lifecycle – Innovation
• What is the Telekom Malaysia Business Model Canvas?
• What is the Tencent Business Model?
• Janus. Looking Back and Looking Forward.