Innovate by model combination

The number of business models are limitless, and can be implemented as brand new offerings, existing offerings with limited innovations, or combinations of both.

There is no end to the combinations of business models that could be created. One may refocus an existing model to differentiate one’s self in a new market like Nintendo accomplished with it’s low-cost, widely accessible Wii console (Osterwalder, pg. 83). Another may the ‘unbundle’ three common models in the same company to clarify each bundles' value proposition (Osterwalder, pg. 59). Yet another may offer a ‘blue ocean’ approach where the value has never been conceived by the customer - such as the unlimited personal access to a massive library of music that Apple’s iPod and iTunes store offered (Osterwalder, pg. 85).

An entrepreneur can become trapped into thinking they must invent a brand new product or service when the opportunities for innovation may be right in front of them. The examples in Osterwalder’s book illustrate the sheer number of combinations on nine core business concepts that could be re-used in new sectors or re-imagined in existing sectors. There are limitless opportunities in existing companies for new business models to be generated. There are exciting new opportunities for startups to experiment with combinations that don’t exist in the marketplace.

Amie and I are at Panera Bread as I write this post (a little late, I apologize). We summarize the unique value proposition of Panera Bread as “fresh and fast food with excellent service and a comfortable atmosphere.” Unlike a traditional restaurant, their value proposition doesn’t rest in unique recipes. In fact, you can access all of their recipes online; which is an example of an open business model (Osterwalder, pg 111)(Panera Bread). Unlike a traditional coffee shop, they supply fresh food and personable service. They may be trying out a new service model where we’re at - they brought the food we ordered to our table! Unlike the traditional fast food joint, they offer an cozy atmosphere that invites the customer to stay and enjoy for a while (hence why I’m writing this post here). This is a fascinating blend of at least three well-known models, restaurant, coffee shop, and fast food joint, into a new offering. They also serve multiple customer segments. There’s the student (us) who will stay most of the day and order food and drink on an as needed basis (Amie’s getting us a coffee now, and we ate lunch earlier). There’s also the family who wants a casual place with good food they can stay and chat, then move on. There was quite a rush of such folks after church, and even now a steady flow of families who can give their children a level of freedom not acceptable in most restaurants.

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