Prototyping Business Models to Drive Innovation
Ashutosh Chandra | 28th July 2020
Products often fail at gradual stages and for multiple reasons. The motto of failing fast and succeeding sooner has become popular across industries. It’s because we understand that some failures are just part of the process of learning. To minimize the risk and fail faster to succeed sooner, our UX consulting agency conduct a thorough user research. It ensures that we’re developing products that address the problems of the user that we need to solve. We develop prototypes to test the solutions and use many other tools and techniques. We do it in many different ways, starting with lo-fi paper prototypes, testing them, iterating, and creating more lifelike prototypes until we reach our MVP (Minimum Viable Product). Finally, we build a business model around the product and release it to the market.
Also, Read | Choosing The Ideal Prototype For Your Digital Business
Business Model Canvas
It’s fair to say that the Business Model Canvas has become a key tool for many people. Most businesses shift their focus into delivering products rather than projects. But it has the ability to change the way most businesses work. Business model canvas is an amazing tool to communicate around and to quickly mock-up a business model. The business model synthesizes into one page, the main aspects that constitute a business model, removing many of the barriers to starting to build and discuss business models that existed before. But it is more than that. It’s a great tool to support ideation. When the time for ideation comes using the business model and powerful questions, magic happens. It is when we combine them with the Ten Types of Innovation.
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The Ten Types of Innovation
It is the result of research that analyzed how successful companies innovated and which aspects made them successful. Through that research, we found that companies were creating a competitive advantage through 10 different ways. According to the Ten Types theory, there are basically 10 different areas where a company can act, to innovate, with each area being composed of dozens of different tactics. One other thing that was found was, that the companies that innovated in more than one area, were more successful than companies that only innovated around one area.
Examples of innovations in each of the 10 types of innovation
- Profit Model – Strategies for creating wealth.
- Network – Connections with others to create value.
- Structure – Lining up of your talent and assets
- Process – Signature or superior ways for finishing your work.
- Product Performance – Distinguishing features and functionality.
- Product System – Complementary products and services.
- Service – Assistance and enhancements that surround your offerings
- Channel – How your offerings are delivered to customers and users.
- Brand – Representation of your offerings and business.
- Customer Engagement – Fostering distinctive interactions.
Combining the Business Model Canvas and the Ten Types of Innovation
What we see, when we overlap the two models, is a close to perfect match between the Business Model Canvas and the Ten Types of Innovation, as presented in the drawing below. Combining the two offers a lot of potential uses. From quickly developing business models, uncovering alternatives to the current business approaches, or a brainstorming and ideation tool. But more importantly, what it shows us is that innovation and successful products should be viewed more broadly than they are, traditionally. Innovation happens all across the business model. We should approach all components of the business model as part of the actual product or service.
Prototyping business models and driving innovation
When we remove the status quo, we are forced to think about different ways to serve our customers and to innovate. We can use these questions to get familiar with prototyping business models. Also, to familiarize yourself with using both tools, begin using them to challenge your developed business models for your products, existing and new. Don’t just build one! How many business models can you prototype and in how many different ways can you make it work? As with most things, it’s not until you put it to test with real customers that you will know what actually works. It is not always possible to test business models in the market but, if you can, make sure you spend some time thinking about how you would test your different business model prototypes.
Conclusion
It is better to test the entire business models whenever possible than testing products or services. The channels, revenue model, or the potential partnerships are as important as the product that your team developed for solving the problem.
Contact Oodles prototype design services for assistance related to prototypes.
Image source: Google images
