The Innovation Framework
success_framework

A Framework For Business Model Innovation

A good innovation framework can help you outline your business model, test its viability, articulate your value proposition and set you up for success.

Silicon Valley’s “fail fast” mentality sounds exciting: Go big, or go home! The problem, of course, is that failure isn’t appealing. It’s hard, painful, and, in certain cases, career-ending.

But if success is better than failure, why do so many startups flame out? A recent study by CB Insights found that most startups fail because there’s no market need for their product or service. Similarly, a 12th & Broad analysis found that poor market fit is a key culprit in startup failure. That’s right: Most startups fail because they build something no one wants.

What good is a well-crafted offering if it serves no discernible need and there are no customers willing to pay for it? If you think about it (or if you’ve been in this position yourself), you know it’s not simple to view your product or service objectively.

Founders are often overwhelmed with daily activities and buried in an avalanche of data and metrics. And then there’s the human component. People in early-stage startups are sometimes bonded together by little more than the desire to succeed at something new. And if your startup is funded, you can add investors to the mix. Although getting funded sounds like every founder’s dream, it often is the equivalent of bringing in a boss or an entire team of bosses.

In today’s rapidly evolving and volatile economy, startups are essentially prospecting for the right idea, the right product, the right customer, and the right business model that brings it all together with maximum results. When put in perspective, you can see why so many startups fail the most basic of business tests. Thankfully, there are ways to make sure you stay on track, foster impactful innovation, mitigate your risk of failure and nurture success.

Get Back to Basics With a Business Model Checkup

A good framework can help you outline your business model, test its viability, and articulate your value proposition concisely and realistically. The Business Model Canvas, created by Alex Osterwalder, is a strategic management and entrepreneurial tool that allows you to describe, challenge, invent, and pivot your business model. Many founders happily fill this out in the early days, and then file it away, never to be reconsidered again.

But the Business Model Canvas is the perfect tool for a mid-stage startup to regularly revisit. Using this tool every month or quarter forces you to examine all angles of a concept, from profitability to customer desire. Effectively, you unbundle your value proposition into smaller, actionable steps, reduce noise and confusion, and focus on your minimal viable product.

If you’re being honest and objective, doing this exercise regularly will uncover flaws in your thinking and help you shore up weaker areas of the business. In fact, it will help you keep product-market fit, which will increase your chances for success. In addition to the Business Model Canvas, there are tons of tools for entrepreneurs to use to periodically reassess their businesses, including:

  • Business Model Innovation Hub. Created by Osterwalder, this site lets you tap into and exchange knowledge on new and innovative business models.
  • Lean Canvas. Ash Maurya created this variation of the Business Model Canvas, and it might be even more actionable for mid-stage founders.
  • DIY Toolkit. This site is great for quick reference. It provides guidance on how to invent, adopt, and adapt ideas that will deliver better results. There are lots of tools, templates, and how-to breakdowns.
  • Platforms and Networks. This one is perfect for tech entrepreneurs trying to scale and keep their organization running smoothly at the same time.
  • IBM Institute for Business Value. IBM is a surprisingly great incubator for ideas. The site is a primer on how and when business model innovation is most powerful.
  • B Corporation. For entrepreneurs focused on benefiting society as well as shareholders, this site helps define your take on an integrated philanthropic approach to business.

The Right Tools Equal Success for Your Business

Now that you see the power of regularly revisiting your business model, you’re probably wondering how to make it work. After all, you do have a startup to run.

The most important criteria for any workshop method is to combine objectivity, shared problem-solving, and rapid analysis within a structured framework. Leveraging the skills of an unbiased facilitator will bring clarity and focus to the process and help your entire team be more objective as everyone works through the canvas.

The other key to using these tools successfully is consistency. Depending on your company’s startup stage, you should be using them regularly. It sounds like a lot, but rethinking these critical areas will increase your chances of making an impact.

A host of established companies have used the Business Model Canvas to focus on evolution and expansion, including Adobe, MasterCard, Hermès Paris, Ericsson, and 3M. In particular, Nespresso is a great example of a mid-sized company that fostered innovation through the Business Model Canvas. It created its entire model around the idea of selling branded coffee pods through direct channels.

“Fail fast” is a good motto when you’re talking about features — small bets within your larger goals. But I prefer the “fail to plan, plan to fail” motto. Use the Business Model Canvas to map your progress and judiciously fine-tune your business, and it will help you succeed.

Amber Bezahler

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