Business Model Generation - Alexander Osterwalder  ## Metadata - Author: **Alexander Osterwalder** - Full Title: Business Model Generation - Category: #books ## Highlights -  ([View Highlight](https://read.readwise.io/read/01hz4nqaf26azbtq6pnc48brv6)) -  ([View Highlight](https://read.readwise.io/read/01hz4nq132m4r2t5sw4c00gadx)) -  ([View Highlight](https://read.readwise.io/read/01hz4nq3hj389g4sh908sxhh4r)) -  ([View Highlight](https://read.readwise.io/read/01hz4npme6zdwpcdd4235hcd9q)) - Companies invest heavily in market research, yet often wind up neglecting the customer perspective when designing products, services—and business models. Good business model design avoids this error. It views the business model through customers’ eyes, an approach that can lead to the discovery of completely new opportunities. This does not mean that customer thinking is the only place from which to start an innovation initiative, but it does mean that we should include the customer perspective when evaluating a business model. Successful innovation requires a deep understanding of customers, including environment, daily routines, concerns, and aspirations. ([View Highlight](https://read.readwise.io/read/01hywv16tfamn6xgabmwdvh0sm)) - Apple’s iPod media player provides an example. Apple understood that people were uninterested in digital media players per se. The company perceived that consumers wanted a seamless way to search, find, download, and listen to digital content, including music, and were willing to pay for a successful solution. Apple’s view was unique at a time when illegal downloading was rampant and most companies argued that nobody would be willing to pay for digital music online. Apple dismissed these views and created a seamless music experience for customers, integrating the iTunes music and media software, the iTunes online store, and the iPod media player. With this Value Proposition as the kernel of its business model, Apple went on to dominate the online digital music market. ([View Highlight](https://read.readwise.io/read/01hywv56gxqkymbv4v15e8ww5w)) - As pioneering automaker Henry Ford once said, “If I had asked my customers what they wanted, they would have told me ‘a faster horse.’” ([View Highlight](https://read.readwise.io/read/01hywvbwja1gn6q09e1fg738cb)) - Another challenge lies in knowing which customers to heed and which customers to ignore. Sometimes tomorrow’s growth segments wait at the periphery of today’s cash cows. Therefore business model innovators should avoid focusing exclusively on existing Customer Segments and set their sights on new or unreached segments. ([View Highlight](https://read.readwise.io/read/01hywve6rwjp6yhp0xrb3wzsmf)) - number of business model innovations have succeeded precisely because they satisfied the unmet needs of new customers. For example, Stelios Haji-Ioannou’s easyJet made air travel available to lower- and middle-income customers who rarely flew. And Zipcar allowed city dwellers to eliminate the hassles of metropolitan car ownership. Instead, customers who pay an annual fee can rent automobiles by the hour. Both are examples of new business models built on Customer Segments located at the periphery under incumbent models: traditional air travel and traditional car rentals. ([View Highlight](https://read.readwise.io/read/01hywvh02zfd6jxnecxhhxa1xs)) -  ([View Highlight](https://read.readwise.io/read/01hywvk5nzxx37bxp8ygwqa9ze)) - One challenge we face when trying to create new business model options is ignoring the status quo and suspending concerns over operational issues so that we can generate truly new ideas. ([View Highlight](https://read.readwise.io/read/01hyxca1m7rqk6cw12vqtv6k9b)) -  ([View Highlight](https://read.readwise.io/read/01hz4nmxg887jwhqfqsrnh9rmn)) - airlines didn’t buy engines for their airplanes, but paid for every hour an engine runs? That is how **Rolls-Royce** transformed itself from a money-losing British manufacturer into a service firm that today is the world’s second biggest provider of large jet engines. ([View Highlight](https://read.readwise.io/read/01hyxczq3tzq6wnjzj1w1ngnhv)) - TEAM COMPOSITION KEY QUESTION: IS OUR TEAM SUFFICIENTLY DIVERSE TO GENERATE FRESH BUSINESS MODEL IDEAS? Assembling the right team is essential to generating effective new business model ideas. Members should be diverse in terms of seniority, age, experience level, business unit represented, customer knowledge, and professional expertise. ([View Highlight](https://read.readwise.io/read/01hyxjgf8h6f4qvn0jqx7rrxpk)) - 2. IMMERSION KEY QUESTION: WHICH ELEMENTS MUST WE STUDY BEFORE GENERATING BUSINESS MODEL IDEAS? ([View Highlight](https://read.readwise.io/read/01hyxjnp5f286ybb2qy0genswy)) - 3. EXPANDING KEY QUESTION: WHAT INNOVATIONS CAN WE IMAGINE FOR EACH BUSINESS MODEL BUILDING BLOCK? ([View Highlight](https://read.readwise.io/read/01hyxjrvygh50q2372ynrxhmen)) - Businesses already make frequent use of visual techniques such as diagrams and charts. Such elements are used extensively to clarify messages within reports and plans. But visual techniques are used less frequently to discuss, explore, and define business issues. When was the last time you attended a meeting where executives were drawing on the walls? Yet it is in the strategic process where visual thinking can add tremendous value. Visual thinking enhances strategic inquiries by making the abstract concrete, by illuminating relationships between elements, and by simplifying the complex. ([View Highlight](https://read.readwise.io/read/01hz1ah821aby5163fxk49kahr)) -  ([View Highlight](https://read.readwise.io/read/01hz4nm9xg7xtyy6dvznxdgz3c)) -  ([View Highlight](https://read.readwise.io/read/01hz4nk5as6j8eab0whzvbp0nt)) - The first supposes that “business as usual” or incremental improvements are sufficient to survive in today’s competitive environment. We believe this path leads to mediocrity. Businesses that fail to take the time to develop and prototype new, groundbreaking business model ideas risk being sidelined or overtaken by more dynamic competitors—or by insurgent challengers appearing, seemingly, from nowhere. ([View Highlight](https://read.readwise.io/read/01hz4g5ynsqdp2h0bxk3a3xg8z)) -  ([View Highlight](https://read.readwise.io/read/01hz4nfk0e56zm6yzkdqzhg3z5))