Inside Out Business Model

Ignore the status quo and don’t build a better mousetrap. Stop focusing on what your competitors do. Instead, challenge orthodoxies. To do so, start with any of the nine business model building blocks and build outwards. While we typically start with customer segments to build a customer-driven business model, there are four common starting points. The four most common starting points include:

1. Resource-Driven – Innovation originates from an organization’s existing infrastructure or through its partnerships to expand or transform the business model. For example, Amazon’s web services were built on top of its retail infrastructure to offer data storage to other companies.

2. Offer Driven – Innovation originates by creating a new and unique value proposition that affects the other building blocks in new ways. For example, FedEx offered 24-hour package delivery guaranteed.

3. Customer Driven – Innovation originates based on customer needs, access, or increased convenience that affect the other blocks in new ways. For example, 1-800-Got-Junk made trash-hauling not only more convenient but through recycling and donation changed the industry’s image.

4. Financially Driven – Innovation originates from new revenue streams, pricing mechanisms, or reduces cost structures that affect the other blocks in new ways. For example, Xerox leased copiers as opposed to forcing users to buy them.

Where will you start when you apply the Business Model Canvas to your business?

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