Business Model for a Business Model
The folks behind the book Business Model Generation, Alexander Osterwalder and Yves Pigneur, have come up with a business “handbook” that is not only user-friendly, helpful and applicable—but brilliant from a business model perspective.
Before launching the book, they created an innovative business model that includes some interesting ways to generate money, a unique visual design approach and a targeted marketing plan. Not only have I enjoyed the book and applied its insights to Malenke | Barnhart, but I also love the model behind it.
The business book publishing space is incredibly competitive and has a horrible reputation for producing puffery. With thousands of business books published per year, many of which fail, they had to do something really different to climb above the clutter. What I have noticed, and they certainly overcame, were common business book pitfalls. Most business books are:
- Text heavy
- Too light on visuals
- Lacking in visual design
- Not applicable
- Not tactical
- Too theoretical
- Not modern or fresh
- Too heady
Here is what they did to create a best-seller:
Made it highly profitable
470 people from 45 countries paid to be a part of the book. Initially they paid around $24, and that quickly scaled to $450 per person–just to be acknowledged in the book. This helped pay for the design and production. They then self-published.
Made it highly visual
With funds raised by the contributors, the authors were able to hire a talented illustrator and designer to create a book full of graphics that appeal to visual people—which is most people. The pages are filled with graphics that tell a story much quicker than a slew of words ever could. The book is actually fun to read, and most importantly— easy to put to immediate use.
Made it highly usable
The “handbook” is based around the “Business Model Canvas”, a highly usable template for building a business model from the ground up. The template is downloadable from the book site, and there is also an iPad app to help facilitate the process. The canvas helps businesses quickly evaluate current models as well as establish new ones.
The model is based on nine building blocks:
- Customer Segments
- Customer Relationships
- Value Proposition
- Revenue Streams
- Cost Structure
- Key Partners
- Key Activities
- Key Resources
Made it highly marketable
The creators gave away the “Business Model Canvas” and a 72-page portion of the book for free. They created numerous channels for marketing: Alex’s website, the book website, Alex’s blog and numerous YouTube videos, which share the vision of the book. There are now seminars, conferences and webinars surrounding the “Business Model Canvas” concept. They have a huge unpaid sales staff in the form of consultants and conference speakers using the canvas in their material all over the world. Brilliant.
This book is a must-read for leaders, entrepreneurs, intrapreneurs, innovators, startups, strategists and consultants.
Another interesting business model:
App Cooker: http://www.appcooker.com/Overview.php
This is a great tool for managing iPad and iPhone development, but what is interesting here is the pricing model. They have created a sense of urgency with a “sliding scale” pricing model. For a limited time, the product is discounted at $19.99, then it will scale to $49.99 as they release new features and reach milestones. But if you lock in now, you get the discounted price. What a great way to get some critical mass and some much-needed funds flowing.