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Deliberately Unsustainable Business Models
Nina Simon offers an interesting take on the nature of unsustainabl..., their role with museums, sports teams and rock bands, and the role of innovation. From here post:
"I once asked Eric Siegel, the Director of the New York Hall of Science, why museums are rarely innovative shining stars on the cutting edge of culture. He commented that as non-profits, museums are built to survive, not to succeed. Unlike startups and rock stars, museums aren't structured to shoot for the moon and burn up trying. They're made to plod along. Maybe it's time to change that.
At one point, Mark commented that they have a "deliberately unsustainable" business model. In other words: do great stuff while you can, and when you can't do it anymore, stop. This is the model that governs most businesses and artistic endeavors. It's the reason terms like "jump the shark" exist. Most companies, rock bands, and sports teams are only brilliant for so long. Then they start to slide. Then they die."
This concept may be an interesting point to bring out in the book.
Food for thought,
Bruce
"I once asked Eric Siegel, the Director of the New York Hall of Science, why museums are rarely innovative shining stars on the cutting edge of culture. He commented that as non-profits, museums are built to survive, not to succeed. Unlike startups and rock stars, museums aren't structured to shoot for the moon and burn up trying. They're made to plod along. Maybe it's time to change that.
At one point, Mark commented that they have a "deliberately unsustainable" business model. In other words: do great stuff while you can, and when you can't do it anymore, stop. This is the model that governs most businesses and artistic endeavors. It's the reason terms like "jump the shark" exist. Most companies, rock bands, and sports teams are only brilliant for so long. Then they start to slide. Then they die."
This concept may be an interesting point to bring out in the book.
Food for thought,
Bruce
Tags: Nina, Simon, business, innovation, models, survival, unsustainable
Replies to This Discussion
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Permalink Reply by Alex Osterwalder on -
Interesting thoughts! Particularly the comment from Eric Siegel. I just ran a workshop session on business models for 60 people from the cultural heritage sector in The Netherlands last week. I can guarantee that they are under pressure to at least partially re-invent their business models... or disappear. It was surprising to see how interested the group was in the topic. Hopefully the half-day session helped them on their journey of re-invention. Maybe Mr Siegel would need the same workshop...
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Permalink Reply by Erwin Fielt on -
There may be two issues here. (1) business models that are deliberately unsustainable and/or risky and (2) the time dimension, business models can go from a growth stage to a decline stage. With respect to the latter, this requires the notion of "business model life-cycle."
In addition to this, an organization can be involved in multiple businesses with different business models, requiring them to manage a "business model portfolio." Thereby, it can be beneficial to balance this portfolio by being involved in business models that are in different phases of their life-cycle, e.g. the BCG matrix.
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Permalink Reply by Alex Osterwalder on
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Very good points Erwin! I like the two points you mention:
- Business Model Life Cycle
- Business Model Portfolio
This should be part of our book!
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Permalink Reply by Mike Lachapelle on -
Hi Erwin
Allow me to contribute a practical example of this concept.
The Government Branch I am working with has come to realize they are operating two very different business models within their services structure. The procurement services they provide for the rest of the government are structured on a value shop (problem solving) , the asset disposal services are structured on a network (e-bay).
It was quite a revalation to them that they didn't have "a" business model, and these two different ways of doing business are at very different levels of development. There is a very significant initiative underway to re-define the procurement business. The disposal business requires most of the effort to be in the IT support area. Our IT providers have yet to accept there are two very different business models at play here and want to have only one service model for the whole branch, even though the business requirements for IT responsiveness are completely different.
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Permalink Reply by Bruce MacVarish on -
Great points by Erwin and Mike.
Other case studies of companies using different business models within the same company include Microsoft (enterprise, consumer, mobile)...Google (consumer/advertising, enterprise)... Cisco (carrier, enterprise, consumer). Each have described the challenge of using multiple models... or moving from just one...to multiple.
I like the concepts of Business Model Portfolio and Business Model life-cycle and believe it would be helpful to cover in the book.
Just as Geoffrey Moore described adoption of new technology products over the life-cycle, you could describe the life-cycle of a business model from early adopters---to mainstreet --- to laggards.
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Permalink Reply by Erwin Fielt on
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Introducing concepts of Business model Portfolio and Business model Life-cycle brings in the idea of Business Model Management as expertise/function in organizations.
I once wrote down some ideas on this in a book chapter, a summary of some of these ideas can be found via http://fieltnotes.blogspot.com/2008/05/business-model-management.html.
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