Innovative Business Model Techniques: Prototyping and Storytelling

Selling Externally

Just as employees must “sell” ideas internally, entrepreneurs with plans based on new business models must sell them to other parties, such as investors or potential collaborators.

Technique Nº 4: Prototyping

It's a methodology for exploring different possibilities until a truly good one emerged. It's a central part of an inquiry process that helps participants gain a better sense of what is missing in the initial understanding of a situation.

Prototyping is a powerful tool for developing new, innovative business models. Like visual thinking, it makes abstract concepts tangible. In recent years, in business discipline, it has gained traction in areas such as process design, service design and even organization and strategy design.

We see prototypes representing potential future business models: as tools that serve the purpose of discussion, inquiry, or proof of concept. Making and manipulating a business model prototype forces us to address issues of structure, relationships, and logic in ways unavailable through mere thought and discussion. To truly understand the pros and cons of different possibilities, and to further our inquiry, we need to construct multiple prototypes of our business model at different levels of refinement.

We believe it is important to think through a number of basic business model possibilities before developing a business case for a specific model. This spirit of inquiry is called design attitude, because it is so central to the design professions. The attributes of design attitude include a willingness to explore crude ideas, rapidly discard them, then take the time to examine multiple possibilities before choosing to refine a few—and accepting uncertainty until a design direction matures.

Technique Nº 5: Storytelling

Storytelling is a technique to make potential futures tangible. By their very nature, new or innovative business models can be difficult to describe and understand. They challenge the status quo by arranging things in unfamiliar ways. They force listeners to open their minds to next possibilities. Resistance is one likely reaction to an unfamiliar model. Therefore, describing new business models in a way that overcomes resistance is crucial.

Good stories engage listeners, so the story is the ideal tool to prepare for an in-depth discussion of a business model and its underlying logic.

• Make the New Tangible. Explaining a new, untested business model is like explaining a painting with words alone. But telling a story of how the model creates value is like applying bright colors to canvas. It makes things tangible.
• Clarification. Telling a story that illustrates how your business model solves a customer problem is a clear way to introduce listeners to the idea. Stories give you the “buy-in” needed to subsequently explain your model in detail.