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.
One of the big criticisms of the business model canvas by Eric Ries and Ash Maurya was that the business model canvas is great at capturing what a business model is like but it doesn’t capture why the business model is important.
- At the core of the Why is the problem?
- Why are you providing legal services?
- Because people need legal services?
- Why do people need legal services?
- Because they are in trouble with the law?
- Why do they need legal services if they are in trouble with the law?
Because they don’t, and can’t understand the law. And don’t understand the language that lawyers have to use to win cases.
If we dig down into the problem that the customer faces, we can then really focus on building a business model that delivers a solution to them.
If we focus on delivering a business model that is similar to the business models of other legal service companies, what do you think is going to happen? You are going to end up in fruitless competition, relying on your own skill as it ebbs and flows over time.
Are the problems worth spending time on?
When we start looking at business models, it is always worth spending time thinking about the problem that the customer has.
As we have seen, when we looked at the business model cycle, the industry generic business model will often, over time start to focus on solving problems that the industry has in delivering the business model. And will move further and further away from the problem that the consumer has.
When I lived in Bristol doing my undergraduate degree, I wanted to talk to my parents. I went to the local telephone company, British Telecom as it was called then, and tried to get a phone line installed in my flat. The list of requirements was so onerous that I just meekly said Thank You, took the clutch of forms, and dumped them in the first litter bin I passed as I left the office.
Think about that – a company whose business model makes it impossible for customers to solve the problem that the company was set up to solve. Not good, and it was a reason why lots of competition was introduced in the years after and mobile phones became so wildly popular. They made it so easy to solve the problem of talking to Mum and Dad when you were away from home for the first time.
I always start with what is the problem and move forward from there.
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