When I first looked at the design of the Freekey system, I instantly needed to think at the design of a paperclip or mousetrap. The Freekey is a great innovation of the traditional split-ring key chain, which is more natural and easy to use. I simply asked myself: “Why hasn’t the Freekey design been out there for decades?”
In this article I will try to answer the question “What is a business model?”. I will use a formal definition from Alexander Osterwalder and dive into tools and concepts that might be of use when you start playing around with innovating your (company’s) business model.
In this article I will review the Quiver pen holder for my Moleskine notebooks. I’m a huge fan of the legendary Moleskine notebooks in this highly digital world, however you might recognize the problem that it is hard to keep a pen and your Moleskine in one central place. When you want to use it, you need to search your pen, while clipping the pen onto the Moleskine isn’t a successful solution.
By accident I noticed the Move Collective Bobble water bottle in a store. I was directly caught by the cool design, and the fact that a water filter is integrated into the nozzle of the water bottle. However there is a great story of entrepreneurship and environment behind this product !
Bobble Water Bottle – A closer look
I’m using the Bobble water bottle for a few weeks now, and the comments I get are about the fancy design, mainly aimed at the integrated filter in the nozzle. The Move Collective Bobble is the work of a great designer, Karim Rashid.
“Bobble is designed, under exclusive agreement, byu the famous multi award winning designer Karim Rashid.”
The bottle itself has a great (female) curve, which gives it elegant looks. The used plastic is thin, which makes it easy to squeeze the bottle while maintaining the strength (just in case you would accidentally drop the Bobble Water Botttle). The bottle diameter is not a perfect circle, but a little elliptical, which makes it easier squeeze (and drink). The Bobble water bottle is made of recycled plastic:
“Bobble is made from FDA approved recycled PET that is free of BPAm Phthalates and PVC & is 100% recyclable.”
The most eye-catching part is the colorful nozzle, with integrated filter, of the Bobble water bottle. It is a carbon filter, like you might know from outdoor- or hicking activities. The carbon filter cleans the water as you drink.
Therefore you can use the bottle in area’s where you can’t drink clean drinking water from the tap. But also in the Netherlands where you can drink from the tap, it seems like the water taste gets a little more sweet (assuming that the carbon filter has some impact). 🙂
I haven’t tried if you can put the nozzle with integrated filter on a different bottle, for example a 1.5 l soda bottle. This was a question I got from a fellow traveler during my commute from the office to home.
Business case – The entrepreneurial view
I mentioned in the introduction that there is a great business case behind the Bobble water bottle. From a business perspective it is not just the design that matters, but also the hard facts and financial numbers. So let’s do the math:
“Americans alone spend $17 billion every year to slake their thirst for portable water. The cost are not limited to our wallets either. Each year nearly 1.5 million barrels of oil are used to make plastic water bottles. Most of those bottles are casually discarded. They end up in our landfills, in our oceans, littlering our sidewalks.”
I was impressed with the ammount of oil barrels used in the times where predictions are made about running out of fossil fuels. On the other hand there is are complete industry value chains and supply chains build around the production and distribution of bottled water.
“Approximately 38 billion plastic water bottles end up in landfills each year. By using bobble, which is made from recycled materials, we can do all our part to eleminate unnecessary waste. Bobble helps fix the problem by using recycled material to make new bobbles. Botteled water is also a costly addiction. Bobble retails under $10 and can be refilled at least 300 times before changing the filter.”
Again an impressive figure how the environment is affected. The costs are kept relatively low, however $10,- is a lot of money in developing countries. At the office of my employer Earth water bottles are used, which are made of bio-degradable plastics. This could be a next step for Bobble 2.0 !
Overall you can build an strong business case from the number above, and I do hope that some impact can be made.
Overall conclusion and wrap-up
I’m using the Bobble water bottle for a few weeks now. I get a lot of questions when I’m commuting by train about the modern design and the colorful nozzle. I would conclude Karim Rashid did an excellent design job, it looks fresh, modern, minimalistic and clean. 🙂
As a hobby cyclist I’m used to drinking from a water bottle on my road bike, with the difference that these sports water bottles are not fitted with a filter. There is no need for it as well, otherwise the filter would get full of Maxim Electrolyte energy drink.
Over the past weeks it seems to be a very durable product. Just like the Camelbak drinking systems you need to be aware of cleaning the bottle and end cap from time to time.
The filters can be replaced as well, so you don’t need to throw away the bottle itself. I’m not sure if I will be counting the number of refills, however everyone should create some (corporate) social responsibility and save the environment about 299 bottles with the Bobble water bottle. 🙂
In addition to the Microsoft Docs introduction of Lili Cheng, General Manager of FUSE Labs, you can read the following description of Microsoft Docs on the Fuse Labs website:
“Discover. Create. Share.
Now you can discover, create, and share Microsoft Office documents with your Facebook friends. Built using Microsoft Office 2010 – Docs for Facebook provides the best possible document service for the Facebook environment.
Docs gives you a great, flexible social–productivity experience. You can decide who to share with… from privately creating, editing, and collaborating around docs, all the way to public sharing on the web. You can upload or start doc online, have someone help you edit it, incorporate feedback, and then share it with the world. Docs can be viewed and edited directly within a web browser – or, with a single click, you can edit them more richly and powerfully through the Microsoft Office software on your PC or Mac.
Seamless integration with Facebook means that the service is all about sharing your documents. Finally docs can be friendly too!”
Microsoft Docs – Some hands-on experiences
On the Microsoft Docs website you can find two video’s: (1) Welcome to Docs – Video Tutorial and (2) Getting Started for Docs – Video Tutorial. These video’s should give you a basic impression of the capabilities of Microsoft Docs.
Furthermore I would like to recommend a Microsoft Docs hands-on tour article published on PCWorld by JR Raphael, a contributing editor @ PCWorld and and the co-founder of eSarcasm. The article consists of pictures of the different steps of the document lifecycle.
Matt Singley, Senior Director of Social Media Strategy for M80, the leading provider of social media marketing and digital publicity services to Fortune 500 brands, has written an excellent article about Microsoft Docs as well and has some interesting feedback to share:
- “You can visit the site and download existing homepage docs, but unfortunately full participation is still limited to beta users that have received an invite code. That means that until you are in the beta test group, you cannot actually upload anything…too bad.
- I should also mention that I tried this site in four browsers: Internet Explorer, Firefox, Safari and Chrome. It worked great in all of them except Chrome initially; I got a compatibility error in the Google-born browser.”
Microsoft Docs vs. Google Docs
Just like Matt Singley and Jeremiah Owyang, Partner, Customer Strategy @ Altimeter Group and Columnist for Forbes CMO Network, I expected this result from the strategic Microsoft Facebook partnership as an attempt to compete with the Google Docs service.
Mary-Jo Foley, Editor from the All About Microsoft Blog on ZDNet, describes Microsoft Docs as “a version of Office Web Apps tailored for Facebook users“, while she furthermore states in the ZDNet article:
“Office Web Apps is going to be available to different sets of customers in different ways, Microsoft officials have said. Business users who want to run them inside a company on their own servers and/or via a Microsoft-hosted server will be required to pay some still-unknown subscription fee.”
Therefore I do think that it is fair to conclude that the Microsoft Docs vs Google Docs comparison is clearly wrong, since this is a different product offering aimed at a different target audience. I would decribe Microsoft Docs as a derivative of the Microsoft Office Web Apps that serve the more “general” market. I think it would make more sence to make a comparison between these two services !
Pat Kinsel from FUSE Labs also addresses the comparison with Google Docs in the Microsoft Docs overview on the website:
“There are other services out there that let you create and collaborate on documents. And there are others that support sharing, discussing and discovering documents. But what makes Docs special is it’s the only service that supports the complete document lifecycle. That coupled with seamless integration of Microsoft Office 2010 and Facebook makes Docs the best possible document service for the Facebook environment.”
Overall thoughts and wrap-up
Microsoft and Facebook have already sucessfully teamed-up in the past, for example with the development of Facebook for Windows Phone that brings the Facebook experience to your Windows Mobile powered smartphone.
If you think about Microsoft Docs from a more abstract level, than it is the combination of the world’s leading Office suite with one of the most powerful global social networks. A clever combination that might result in a new market opportunities for both Microsoft and Facebook. However I’m trying to think a little more about the business- and revenue model behind, mainly because of the currently advertising driven Facebook network.
John Obeto, Microsoft MVP and owner of Absolutely Windows, proposed an integrsting question in this context: “Will Facebook expose the contents of the docs on docs.com to advertisers?“ Are revnues mainly created on the continued advertising model with the resulting yes answer to the question above, or will Microsoft simply get a license fee for leveraging the Microsoft Office Web Apps ?? Remark also the quote from the Mary-Jo Foley article that Microsoft Office Web Apps will be available in different ways to different sets of customers.
Business users might use the more traditional Microsoft Office Web Apps as an extention of the Microsoft Office 2010 software on the workstations and notebooks, while I wouldn’t be surprised to see Microsoft Docs, as a more consumer oriented offering, become part of the well known Windows Live bundle.
However these are just some thoughts and with the current information available there are no insights in the mid- and longterm goals of this start-up project. Furthermore the comparison of Microsoft Docs and Google Docs is clearly wrong, mainly due to the derivative character of Microsoft Docs. In order to complete the wrap-up I would love to hear your thoughts and invite you to sign-up for the beta of Microsoft Docs. Twelve of my friends did also sign-up as you can see in the screenshot above.
Takeshi Numoto, Corporate Vice President, Office Product Management Group, just published the article “Cloud creates new opportunities for Office: thoughts on Docs.com for Facebook” with his thoughts about- and the explorative nature of the Microsoft Docs approach.
About Microsoft Fuse Labs
“FUSE Labs works in partnership with product and research teams to ideate, develop, and deliver new social, real-time, and media-rich experiences for home and work. FUSE Labs experiences give users new ways to create, connect and collaborate with the people, information and ideas that matter to them.”
According to the symposium leaflet the goal is “to give you as a student an impression fo what the market will look like in five years. […] most students will be looking for a job by that time […]” In the concluding section Iwill evaluate if this goal has been met for me personally. Let’s kick-off quickly with the first part of the opening speech.
Opening speech by Professor Ir. Roel Pieper
In this first section I will discuss a few interesting topics from the opening speech of professor Ir. Roel Pieper. Professor Pieper starts his presentation with the following statement on the title slide: “Value creation, nothing else matters.”
This task of value creation is perfectly suited for the entrepreneurs and intrapreneurs, since entrepreneurship is an engine of the economy especially in the current hard economic times.
Every new idea has a hype cycle
The first topic Iwould like to hightly is the so called hype cycle. But what is a hype cycle ? This is a concept developed by Gartner Research in 1995, and a formal definition of the concept and an explenation of the different phases can be found on a special hype cycle section of the Gartner Research website.
“A Hype Cycle is a graphic representation of the maturity, adoption and business application of specific technologies. Gartner has used Hype Cycles to characterize the over-enthusiasm or “hype” and subsequent disappointment that typically happens with the introduction of new technologies. […]”
A hype cycle consists of five different phases:
- Technology Trigger;
- Peak of Inflated Expectations;
- Trough of Disillusionment;
- Slope of Enlightenment;
- Plateau of Productivity;
Both in the “Gartner’s Hype Cycle Special Report for 2005” and the more recent press release “Gartner’s 2009 Hype Cycle Special Report Evaluates Maturity of 1,650 Technologies” give you some practical examples of using the hype cycle.
The triangle of value creation
The second topic I would like to discuss is the by Professor Pieper presented “triangle of value creation”. The triangle of value creation is a simple easy to use model, which can help you to understand some of the basic dynamics of a business (model) and the underlying relations.
Each variable in the triangle is relevent, and really understanding these variables and the relations is a huge advantage for the entrepreneur (in my personal opinion). Engineers are often trained to develop the best available technology on the market, but according to the triangle of value creation, technology only will not bring you success. Also if you just have the money and financials only, it won’t do it. If you have great market knowledge and market access only, it sometimes can work and result in success.
However the main overall idea of the triangle of value creation is that you clearly think about all the three key variables, the underlying relations, and a way to balance them (since each variable is relevant). With the triangle of value creation model you don’t think about just one aspect, and in my personal peception I can see clear links with the design of a business model, for example the design tools presented by Alexander Osterwalder.
Value stack analysis
Another important aspect in the process of value creation is a value stack analysis. The picture above gives a graphical representation of the general industry value chain, and let’s assume an entrepreneur has started the yellow company in the middle of the top row.
It is not hard to imagine that there is a distribution of the total value across the complete industry value chain (from left to right), and therefore for the entrepreneur it is important to understand which part of the total value stack is for his yellow company. Another example is for example a manufacturing company which delivers parts of a certain end-product that is directly sold to a customer. In this case it is important to understand what value the parts represent of the total value of the end-product.
In the value stack analysis you should also think about aspects like core ip and patents, brand value, distribution network or the power of purchasing. 🙂
Creating value top 10 !
The last topic I wanted to share from the opening speech of professor Roel Pieper is an overview of one of his slides, the so called creating value top 10 !!
- Accept that you win and lose;
- Leadership- responsibility – commitment;
- People quality;
- Who wins and who loses;
- The composition of the market;
- Multi-sourcing and -partners;
- Communication website;
- Communication – verbal pitch;
- Scalability – value triangle – value stack;
While this top 10 consists of some great items to think about, you might have noticed that in the sections above the last point is almost completely outlined. With the creating value top 10, I would like to end the opening speech section, and provide you with an idea of two workshops (out of four), which I attended in the afternoon program of the vision on the future symposium.
Workshop 1 – A close look at the IT (Structures) @ Centre for Information and Communication Technology, part of the Dutch Tax Administration
This workshop is organized by Saco Bekius of the Centre for Information and Communication Technology and Professor Dr. Jos van Hillegersberg from University of Twente. I don’t have a formal education in computer science and information technology, so with events like this symposium I always try to broaden my horizon and move out of your own professional field.
On the website of the Dutch Tax Administration you can read the following description of the Centre for Information and Communication Technology:
“The approximately 3,000 staff members of the Centre for Information and Communication Technology (B/CICT) in Apeldoorn develop, manage and monitor the entire computer system used by the more than 30,000 staff members of the Tax and Customs Administration. This makes B/CICT one of the largest internal ICT organisations in the Netherlands.”
It isn’t a big surprise that this part of the Dutch Tax Administration is of vital importance of the whole Tax Administration organization. In other words you could call it the backbone of the organization, which therefore makes it very interesting to discuss.
The impact of e-service trends @ the Dutch Tax Administration
- Key e-services trends;
- Current services and organization of the Dutch Tax Administration;
In this first part of the workshop the attendees should brainstorm and engage in an open discussion on how e-services trends will have an impact on the Dutch Tax Administration. What should the Dutch Tax Administration of the future look like ?
The importance of organizational and IT architecture @ the Dutch Tax Administraion
- Architecture modelling and legacy architecture transformation;
- Current organizational- and IT architecture of the Dutch Tax Administraion;
The second part also consited of an open discussion on what should happen in organization, processes and IT to achieve the Dutch Tax Administration of the future. Due to the wide variety of professional- and educational backgrounds of the attendees these discussions were great, interesting and highly valuable.
Personally I learned some more aspectes about e-services trends and IT architecture as well as legacy architecture transformations and their organizational impact.
Workshop 2 – International Risk Management @ Storck Aerospace
This workshop is organized by Joanne Geurts, Floor Richters & Robert Imhof of Storck Aerospace and Professor Dr. Rez Kabir from University of Twente.
On the Storck Aerospace website, you can find a formal description from this interesting business unit of Storck B.V., which will be producing parts for the Joint Strike Fighter:
“Stork Aerospace designs, develops and produces advanced structures and electrical systems for the aerospace and defence industry and supplies integrated maintenance services and products to aircraft owners and operators. The Aerospace group carries out these activities with 3,532 employees.”
It won’t be hard to imagine that production of parts of a multimillion euro fighter plane, involves accurate management of high-end product specifications, safety regulations, challenges for manufacturing and tracebility. In the light of these aspects this workshop consists of a business case where you need to assess the risks of setting up a factory in Chili, Soutch America.
The used method for analyzing the risks is the “Gross Hazard Analysis“, which I will discuss step by step below:
Step 1 – Determine scope
Step 2A – Identify risk
Is the risk caused by human, technical failure, or nature ?
Step 2B – Asses risk
It is very important to understand the difference between danger and risk, since these are two very different concepts. Danger = potential treat for people or business and is not quanitified !
Risk = severence * probability (quantifiable !!) with severence: I – catastrophic, II – critical, III, IV and with probability: A, B, C, D, E, F
Step 3 – Determine the Risk Profile
With help of the graph above you can create a risk profile, which consists of the several indiviual risks you thought about in the previous steps. This Risk profile gives you an overview of the portfolio of different individual risks. A simple rule or constraint is that all risks above the blue line need to be mitigated. In other words the risk profile is higher if many of the individual risks are above the blue line.
Step 4 – Making a decision about the risk
In this final step you need to make a decision to (1) eliminate, (2) reduce, (3) transfer or (4) accept the risk(s).
In addition to the application of the Gross Hazard Analysis in a Storck Business Case, Professor Dr. Rez. Kabir held an excellent presentation about International Financial Risk Management. This was a great complementary, but very insightful presentation (certainly in the current economic times). Professor Dr. Rez Kabir discussed a well tought-out financial risk analysis of Storck Aerospace based on the publically available information (like press releases and annual year reports).
Concluding thoughts and wrap-up
At first I would like to compliment the student association Stress with the excellent organization of the Vision on the future symposium. At first a highly interesting and valuable opening speech, which addressed both scientific theoretical- and business practical aspects.
Second the organizers of the Vision on the future symposium were able to collaborate with highly interesting companies to participate in the workshops. You could only choose two out of four workshops to attend, so I missed the workshop about Logistics @ Schiphol Group (however have done a Balance Score Card case about the Schiphol Group in the past) and Human Resource Management @ Kock.
Furthermore the workshops during events like a symposium are great opportunities to broaden your horizon and the challenge is to show an excellent performance in a different professional- or education field. Despite I don’t have a formal educational background in Computer Science and IT, both the background as a Mechnical Engineer and Business Administration (Business Model Innovation & Technical Innovation) helped to add real value to the discussions. In the second workshop I could see some parallels of underlying concepts of International Risk Management and Failure Mode and Effects Analysis which I knew from my Mechnical Engineering background.
In the traditional plenary session all the different topics of opening speech and workshops are connected, where students needed to share their experiences and knowledge from the particular workshop(s) they attended. After a final round of good discussions, the closing words of the Vision on the future symposium chairman and a drink, I could look back at a highly interesting day !!