Business Model Ideation: Generating Innovative Concepts

Technique No. 2: Business Model Ideation

Mapping an existing business model is one thing; designing a new and innovative business model is another. Ideation is the process for generating a large number of business model ideas and successfully isolating the best ones. Today, different business models compete in the same markets, and boundaries between industries are blurring—or disappearing altogether.

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. Business model innovation is not about looking back, because the past indicates little about what is possible in terms of future business models. Business model innovation is not about looking to competitors, since business model innovation is not about copying or benchmarking, but about creating new mechanisms to create value and derive revenues. Rather, business model innovation is about challenging orthodoxies to design original models that meet unsatisfied, new, or hidden customer needs.

Phases of Ideation

• Idea Generation: Quantity matters.
• Synthesis: Ideas are discussed, combined, and narrowed down to a small number of viable options.

Options do not necessarily have to represent disruptive business models. They may be innovations that expand the boundaries of your current business model to improve competitiveness. You can generate ideas for innovative business models from several different starting points.

Epicenters of Business Model Innovation

• Resource-driven: Innovations originate from an organization’s existing infrastructure or partnerships to expand or transform the business model.
• Offer-driven: Innovations create new value propositions that affect other business model building blocks.
• Customer-driven: Innovations are based on customer needs, facilitated access, or increased convenience. Like all innovations emerging from a single epicenter, they affect other business model building blocks.
• Finance-driven: Innovations driven by new revenue streams, pricing mechanisms, or reduced cost structures that affect other business model building blocks.
• Multiple-epicenter driven: Innovations driven by multiple epicenters can have significant impact on several other building blocks.

The ideation process can take several forms.