How we pull big corporates out of their comfort zone

Pulling big corporations out of their comfort zone is a terrific way to make them innovate like startups. Confronting corporates with unconventional markets is one of the most effective tools to do this.

This collection offers 30 controversial innovation tricks from 6 peculiar industries that we use in our intrapreneurial bootcamp sessions.

Go ahead and discover how this weapon works for you :)


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How to impress your boss: 30 business tricks from 6 peculiar industries

Pulling big corporations out of their comfort zone is a terrific way to make them innovate like startups. Confronting corporates with unconventional markets is one of the most effective tools to do this.

This collection offers 30 controversial innovation tricks from 6 peculiar industries that we use in our intrapreneurial bootcamp sessions.

Go ahead and discover how this weapon works for you :)


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Why entrepreneurs should play more games: discover new ways to make money.

Business model of most consumer products & services

anigraph1
Many industries make the mistake of limiting how much a client can pay for their products. In the music industry, albums are still sold at a fixed price. As a result, even the most loyal fans can only pay €15 for an album. The gaming industry has already evolved. A couple of years ago, they sold games in boxes at a fixed price and gamers paid a once-only, flat €50 fee for the full game. They realized that this is old-school pricing. They moved on and so should you.

The gaming industry’s success strategy

ani2Today, many titles are offered via a free-to-play model. A variety of complementary in-app purchases offer extra add-ons or features to enrich the gaming experience. There is one rule: a client should be able to spend all his money if he wants to. For some mobile games, only a few people (sometimes fewer than 1%) will bring in nearly all of the revenue! This pricing strategy is becoming so successful (for the publishers) that new problems start to emerge. But that is a different story.

Do you block your clients from spending an infinite amount of money?

anigraph3Many SME owners and entrepreneurs should take a closer look at the gaming industry and evaluate how they are limiting clients to spend more money. Take the (Belgian) restaurant business for example. In my experience, maybe 50% of restaurant owners only accept cash. Knowing that the average Belgian walks around with €30 in their pocket, you know  you can’t earn €100 from that visitor – at best maybe €25 if he wants to keep €5 back for cigarettes later that evening. You get the picture. A stupid strategy.

By design, the business model of restaurants is broken. Even when paying with a credit card, I personally can’t eat more than a few dishes and drink a couple of glasses of wine. Honestly, I’m amazed at how few restaurants experiment with alternative ways of selling me more products. If I buy one piece of delicious apple cake in the afternoon, why not offer me the full cake in a box to take home to my family later that day? Or sell me recipes of your marvelous cocktails and promise to deliver all the ingredients to my home for my party a week later. What about interior advice and referral fees to get an introduction to your contractor? And so on. You could come up with dozens of (crazy) alternative revenue streams that aren’t limited to the amount of food my body can handle within a two-hour timeframe.

Just keep in mind – regardless of the industry you’re in – that there are numerous ways to rethink or challenge your business model by looking at similar concepts in other markets. We see that the analogy thinking brainstorms in our training program are often the most effective tools for finding new business ideas. What market should you learn from?

Update: 29/04/14
I received a great comment via this post on Facebook by @bartclaeys (Belgian, Living in Seattle):

So true, restaurants in Belgium limit themselves based on tradition. In a Belgian restaurant you can’t:

1. Take out food (which is possible in ANY restaurant in US). Seats in a restaurants are limited, but take-out requests can be served endlessly. It requires a more efficient kitchen and less waiting times, something Belgian restaurants – for some bizarre reasons – didn’t figure out yet.

2. Get a doggy bag (note: never use that term in US, nobody does) to take your left overs home. This is especially handy when you dine with your partner who does not finish her plate I tried that in Belgium during my last visit. I insisted and the restaurant was really offended. They almost refused.

3. Tip. Belgian restaurants don’t do the whole tipping thing. Which is great – because I hate it – but which limits them receiving more money for extra service. Delivering extra service is easy and cheap. Checking in once in a while, bringing something extra,… Americans easily fall for that and open their wallet a little wider.

4. Get water for free. Which seems a loss of revenue at first sight, but which reduces the cost of a restaurant visit which means you will go more often. Here in US (at least in Seattle) – I’ve just calculated it yesterday – it’s more expensive to cook your own food than to go to a restaurant because of this. You can get great Thai, Korean,… food for $10. Try to get anything other than a sandwich in Belgium for that money…

5. Get overpriced drinks. Wine and beer are fairly cheap in Belgium and thus accessible to the masses. In US (at least in Seattle) both wine a beer are extremely expensive, starting at $10 for a glass of wine. This reminds me of the price strategies with SAAS companies, offer something cheap, offer something medium priced and offer something extremely expensive (for those who don’t care about money at all). Do Belgian restaurants have an option on their menu that you can waste your money on?

6. Get fast service. American restaurants serve their food fast. No, not only the fast food chains For some reason Belgian restaurants are super slow and thus have less earning potential. I think it has something to do with the number of people in the kitchen. Because employment in Belgium is expensive, the number of people in the kitchen is probably limited in comparison with American kitchens.

Now, I’m not saying that dining in America is better (anticipating on negative responses, here) but it’s definitely more commercial while in Belgium it’s more traditional (aka they stick to their principles).


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Need a new market? Focus on the unexplored B2B territory. – by @nickdemey

Don’t try to be Google, Apple or Amazon. Be a smart follower.
When you need new revenue for your company, chances are that you don’t have the resources to go head-to-head with the giants in your industry. But often the innovators are opening up new needs. Follow in their tracks and pick up the cherries they leave behind. Here are some examples and ideas to learn from:

lifx

A. Self-driving electric vehicles (= new problems)

When robotic vehicles start to roam the streets, they won’t be able to rely solely on road signage designed for the human eye. Instead, sensors and computers will need to communicate with the infrastructure around them – like smart road tiles that broadcast information (e.g. SmartGrains: “Parking is available here!” or “Watch out, there’s a biker coming up!”). New insurance policies will need to be written. (Who is responsible when an assisted/connected car crashes into your house? Who recycles electric car batteries? And so on…). When the big boys set the playing field, it’s best to understand the new rules and join their game.

B. Wearable health devices and iWhatever (= new problems)

The more devices we wear, the more personal data we track, and the more consumers will need software tools to make sense of all these metrics (take Addapp.io, a start-up and data aggregator we’re involved with, that does just that). When your workforce brings these devices to work, use them to your advantage. Drop time tracking and change to behaviour monitoring. Several HR consultancies will launch new KPI’s and training modules based on the activity and health trackers that people already wear. What about back-up services to manage the vast amount of data that a family creates? (e.g. Lifelogger Narrative that we’ve already tried out generates gigs of captured moments in a year!)

C. Internet of things at home (= new problems)

When your house and family start to collect more networked devices than the average SME in the ’90s, you’ll probably need an IT department at home. Ok, so maybe you don’t want to install a collection of black-shirted geeks to play Warcraft in your garage. Instead, a decent software solution will do. New players like Building OS are ahead of this trend and exploring new ways to mange your home needs. Another player (way) ahead of its time was GeekAngel.com which offered on-demand IT support, paid by the minute. Although the latter failed, the future needs are very real. I already faced issues when my connected thermostat Tado (like Nest) crashed and heated my house to 30 degrees while I was 6000km away. Or that time when our connected light bulb (Lifx) couldn’t switch from bright green to the normal white unless I updated my iPhone app. Such issues will become more and more common and families will need some back-up.

Try it yourself!

Try this exercise alone or with your innovation team. Pick three new (over-hyped) technology trends and look for the adjacent needs that could emerge. While most tech blogs would focus on the consumer end of the spectrum, there is often unexplored territory on the B2B side. Who or what will support tomorrow’s infrastructure? It could be your company. Think about it.


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iWatch concepts? You’re doing it wrong. Focus on the business model instead.

Although I was schooled as an industrial designer, I’ll give you a non-design-ish view on what to expect from the upcoming ‘iWatch’. If you’re looking for shiny, wet-dream mockups by fellow designers, I can point you to this endless stream of iWatch concepts that miss the mark. 99% of them strap a mini smartphone to your wrist (are you serious?). It’s probably the same group who designed iPods with keyboards as a vision for the iPhone in 2006. Thinking that slick design is the driver of Apple’s highly profitable strategy would be a very shallow interpretation of their business. No. A new product in Apple’s portfolio will be launched with a clear view of how it can strengthen their business model for the long term. A curved display and rubber-banding UI (as cool as it looks) are irrelevant in this context.

iwatch-apple-concept-fail
(For clarity’s sake, I’ll use the term ‘iWatch’… although I’m not counting on a form factor that resembles a watch or uses a mini touchscreen)

Another building block in Apple’s business model?
At this stage, iTunes and the App Store connect all hardware products with a recurring monetization model. If a new wearable hardware device was launched, it would need to tie in to this proven revenue model. Follow my scenario:

1.The iWatch will be Big Brother on your wrist
1a. Monitor your (media) consumption
1b. Listen and map your friends and family
2. The iWatch will be the most convenient way to pay in a retail context
3. The iWatch will be a health companion to solve the chicken/egg problem in step 2

1.a Big Brother: Monitor your (media) consumption pattern

Apple makes good money on the hardware it sells – but don’t let that blind you. iTunes alone is expected to grow to make up 20% of Apple’s profit (includes apps and services, iTunes covers music and media sales etc.). I assume that, together with the iWatch launch, Apple TV might be pushed to the next level. In order to sell tons of media (TV and movies on demand, music etc.), Apple will need to get the best insights in this market. The best means not just gathering the movies you claimed to like (on Facebook) or what movies you’ve bought (on Amazon), but to observe which media you’re actually consuming and are relevant for you today.

Imagine an iWatch with a Shazam-like feature to continuously listen to what TV soaps, radio channels (or other ambient sounds) you’re surrounded by. Together with the metrics already monitored in iTunes, Apple could build a more representative profile of the media you’re actually enjoying. With such technology available, imagine how Apple – in the long run – could even track whether you’ve listened to a TV/radio commercial or not?

Remember, Apple likes to offer a lifeline to industries under pressure. Just see what they’ve already done with magazine and news publishers. They could support traditional advertisers to track and boost the effectiveness of campaigns in order to fight Google.

1.b Big Brother: Microphone to map your friends and family

With a microphone that listens to your environment, Apple could start to map who you talk to and who you ignore. Apple already has your phone book. So does Google (Android) and Facebook (which just bought 450m address books). With such a feature, it could enter the social space in a disruptive way (remember Ping?). I assume they will find a way to connect this functionality to iMessage to make it acceptable and have a decent use case to start from.

Creepy or not, eBay is experimenting with Watch With eBay (limited results so far). Some apps listen while you sleep. Samsung TV’s already use this in their marketing & Microsoft took huge steps forward with the Kinect. Just to say, this is not 20 years off.

2. Your signature upgraded: the most convenient way to pay in a retail context

iwatch_apple
Apple would be stupid if it couldn’t leverage its massive credit card database in a traditional retail context. Yes, payments by phone are already available in a variety formats, but this can still be simplified. Just check how easy it is to throw money at Apple via the App Store. In an active session, you don’t even have to confirm with a password. You just click and buy. So convenient that it hurts my wallet. Imagine if we saw the same simplicity at a retail counter?

Your smart-wrist device would simply recognize a ‘payment gesture’ in order to accept your purchase. Just as you draw a pattern on your smartphone to unlock it, you could draw a simplified ‘signature’ on the counter when you pay in a retail store. iSign – or whatever Apple calls this payment option – could have the same impact on retail as the App Store has had to (online) software.

Although 30% commissions in retail are not an option, this could be lower. But don’t expect Apple to move in a tiny margin, high-volume business. What if they only ‘claimed’ their commission if a shopper was a verified and tracked customer who’s triggered by a specific ad (see 1.b)? Closing this loop is probably far fetched, but it makes you think where this might lead to in the long run.

3. Be a health companion to solve the chicken/egg problem within the business model

The introduction of a new payment solution is a classic chicken and egg problem. Basically, you have a two-sided marketplace business model. Why would customers use a new system if no retailer supports it (and vice versa)? Expect Apple to open up with 2-3 big retail brands committed to accept their ‘iSign’ payments. Apple could only arrange such an agreement if it could convince these retailers that, in the short term, numerous customers would be carrying around such a payment system.

A health or fitness companion (co-branded by Nike?) would be an excellent vehicle to make this happen. If this was the strategy, it would make sense to make the iWatch compatible with Android (just like MacBooks suddenly becoming compatible with Windows). A FuelBand-like service could suddenly be available to users not currently supported.

In my view, the iWatch will be a stand-alone hardware product, not just an extension of the iPhone. People don’t need a wrist-tied remote for the smartphone in their pockets. Many non-Apple users discovered the ecosystem of Apple via the iPad. Also in this case, Apple can only grow if it can pull in new markets so the iWatch needs to also be relevant to some Windows/Android users. While the device probably has a screen element, I don’t assume this will be a straightforward touch screen. A subtle pattern (think Misfit Shine or the breathing MacBook sleep light) might just do the trick.

Anyhow, it will be an exciting time. How do you think the iWatch could contribute to Apple’s business model?


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Why I’m not buying a Smart Watch yet. Hint: Kickstarter has it all wrong

firstcars

The first cars looked like steamboats on four wheels, mini-steam-powered trains or horseless carriages. It took several iterations (and decades) to leave the ‘old model’ behind. Today, another new product category is emerging: the Smart Watch. Don’t get confused by the rise of Kickstarter Smart Watches however, following the Pebble success story. Although the name ‘Smart Watch’ might imply differently, this market will not be defined by smart phones or watchmakers who will build their version of a steamboat and attract a limited crowd of tech enthusiasts. Real growth will come from new entrants, industry outsiders who aren’t restricted by the product heritage of the existing market players.

neptunepineNOT: Clumsy downsized internet phones on your wrist
The endless variations of Smart Watches that scale down a smartphone all start from a major misassumption. People will not suddenly stop using their iPhone. Users may check their phone fewer than 150 times a day, but still… If you feel the key features of a smartphone should be copied to your wrist, I have to disappoint you. The ’80′s called and they want their Calculator Watch back. A generation or two have already decided that your fat fingers fiddling about on your wrist is only cool for a couple of minutes in the schoolyard. That’s all. Your iPhone will always be better for texting, mailing, browsing or calling (image: Neptune Pine Watch).

cookooNOT: Circular clocks with integrated notification centres
Remember why many people started to hate and abandon Microsoft Windows? One of the key pains was the continuous stream of unnecessary interruptions. “Update now?”, “Are you sure?”, “Your power plug is connected. Ok?” All these menu icons sitting at the bottom of your screen, shooting notifications at users for whatever reason, were just plain productivity killers. Similarly, a watch that  continuously notifies you about what’s changed in your online life will not create value at all. No, at best, it will be the one and only reason why you start shouting at your wrist (image: Cookoo Smart Watch).

The next-gen Smart Watch: New functions, but sold as a status symbol

Before I spend my money on a high-tech device strapped to my wrist, it needs to convince me that it adds new value to my gadgetry portfolio. A good starting point would be to look at the functions that a smartphone does badly.

misfitNew functions: ambient listening and monitoring
A microphone tucked away in my pocket will do a worse job than a microphone on my arm. When a watch continuously listens to my environment, the options become infinite. More importantly, this would open up new functions (read: new ways to monetise users!). Shazam is a killer app with a proven track record, but new experiments are on the rise. Imagine. You could automatically track the people you talk to on a daily basis. Ebay already eavesdrops (via your iPad) on what TV show you’re tuned in to. This way, Ebay is able to offer product info related to the exact scene that you’re watching. This offers value to both the viewer as advertiser (bypassing the TV channel, but that’s a different story). In the future, you don’t watch your wrist, but the device will listen to you and your context.

But a Smart Watch should ‘listen’ to a lot more than sound. Sensors attached to your arm are far better placed to monitor vital body metrics (the bulky Basis is a decent start). My phone often just lies on my desk, unattached to my body. So far, I don’t shower or sleep with my phone. Waterproof fitness wearables however are designed for this purpose. These are features that would become ‘default’ options for a Smart Watch. This brings me to the next wave of Smart Watches (image: Misfit Shine).

toshibaNew functions: personal identifiers (death of the password)

Once settled in the market, additional features could be added. A device on your arm that already (and continuously) knows that you are the person you claim you are, could become the killer of the password. From a market perspective, there is a clear need to replace the old model of a username and password. Even the databases of big players like Adobe are being comprised. The way you type, your skin and many other biometrics could be used as a start. For me at least, this is an open domain for a Smart Watch to evolve in. A problem worth solving is the ultimate basis for any lucrative new business model (image: Toshiba Pulse Smart Watch).

Why Red Bull, Ray-Ban and Dr. Dre might launch a Smart Watch

CHIEFKEEF_HEADPHONES1Most watches today are not sold for their accurate representation of the current time, but for their looks or status. Watches reflect image and personal reputation. In my view, the big new entrants will be players who know how to sell a lifestyle to an audience. I’m looking forward to the first ‘Smart Watch’ by a brand of women’s accessories, fashion items (Ray-Ban?) or headsets (Beats by Dr. Dre?). If I would have to make a more risky prediction, I would go for a ‘Smart Watch’ experiment by Red Bull. They  have a relevant audience to sell to and have proven themselves as being successful in tech-driven markets (Formula 1,…). Depending on their focus, a link with their existing event activity or media/content business might be explored.

Start with one relevant problem for a growing segment

Of course, all of the above can’t be integrated in one device. As in any industry, many variants of product categories will co-exist next to others. In my view, the exciting stuff will not come from Apple, Samsung or Google.

To conclude:

– Existing tech-driven players will be outpaced by new entrants who are able to hide the technology for a user. Companies that talk about Bluetooth connectivity, ePaper or other tech features will miss the mark.

– Those who just try to move functions from your smartphone to your wrist will struggle to grow beyond the tech-savvy crowd of early adopters. Only those who are able to offer new functions will survive.

laughIf all goes well, we will all laugh in a few years about the first wearables that naïvely tried to look like watches or smartphones.

What do you think we’ll laugh about a decade from now?


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