Customer Reviews

Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers

5 star:		(105)
4 star:		(19)
3 star:		(8)
2 star:		(5)
1 star:		(3)

 

 

This book is very different as a business book. Instead of being filled with dense, usually overly wordy pages, it is beautifully laid out, the wording is kept to a minimum, and there are lots of illustrations.

The book is focused on ways to think of the model for your business... with some nice guidelines for structuring the thought process... as well as a bunch of examinations of different types of businesses.

It has good discussions on thinking through what is critical for the business, where the cost structures are, where the benefits are, and how to organize and present those ideas.

It also has a number of cases studies of various companies that changed or invented new business models, such as Amazon's introduction of Web Services.

The book is fast to read, and there were several sections I bookmarked to put into use in my company, which to me is always a good sign for a book.

Where the book is lacking is that I would really have liked more case studies -- a bit more meat so to speak -- once a company came up with the new model, how did the artifacts of the book's discussions come into play with the execution? Did any of the techniques discussed help with the inevitable pitfalls associated? What are some case studies for when people tried the techniques discussed and failed miserably? Innovator's Dilemma, by comparison, does a much better look at both positive and negative case studies, which can provide a lot more learning.

I also would have liked more depth on the blue ocean discussion.

Altogether though, an interesting read and a good addition to my management book shelf.

This is an absolutely superb book and my first and only book on business models. It is so up to date and filled with gems that I feel no need to read another anytime soon.

The book is aptly titled, being all about how to generate business models. However, you have to know what it is before you can generate it. To this end, the first section of the book is devoted to introducing a standard language and format for talking about business models. They introduce nine key items which serve as the building blocks for all business models. These are listed below, illustrated with Skype's business model.

CUSTOMER SEGMENTS: Who will use the product?
1) web users globally 2) people who want to call phones

VALUE PROPOSITION: Why will they use the product?
1) free Internet and video calling 2) cheap calls to phones (SkypeOut)

CHANNELS: How will the product be delivered to the customers?
[...] and headset partnerships

CUSTOMER RELATIONSHIPS: how will you develop and maintain contact with your customers in each segment?
Mass customizedMass customized

REVENUE STREAMS: How is revenue generated from which customer segments?
1) Free 2) SkypeOut prepaid or subscription

ACTIVITIES: What are the key things that you need to do to create and deliver the product?
Software development

RESOURCES: What assets are required to create and deliver the product?

PARTNERS: Who will you want to partner with (e.g suppliers, outsourcing)
Payment providers, Distribution partners, Telco Partners

COST STRUCTURE: What are the main sources of cost required to create and deliver the product?
Software development, complaint management

These building blocks are laid out on a page in a very specific way, referred to as a "business model canvas". As each chapter unfolds, we get a clearer and clearer understanding of each building block and how to use them to create, evaluate and communicate business models.

The business model canvas can be used to describe any of a wide variety of business models. Patterns emerge which correspond to categories of business models. For example, the Long Tail business model is all about selling less of more. The focus is on "offering a large number of niche products, each of which sells relatively infrequently". This pattern is illustrated with the transformation of the book publishing industry and Netflix.

Another example is the so-called "Freemium" business model used by Skype and countless other Internet businesses. This is compared with the standard Telco model making the two models easy to compare. A similar analysis compares the traditional computer gaming model used by Sony and Microsoft which competes on high performance with Nintendo's Wii business model which focuses on casual gamers and a dramatic reduction in development costs. Visualizing these alternatives on a canvas is very powerful (much easier than the above lists).

The Freemium model is a special case of a more general "multi-sided market" pattern which "brings together two or more distinct but interdependent groups of customers". For example, Google gives away a variety of services to one customer segment, the average web user, and earn income from keyword auctions from advertisers, which comprise the other side of the pattern. As is typical with the multi-sided market pattern, the key resource is the platform which facilitates interactions between the two customer segments.

Another major section of the book is devoted to designing business models. Very explicit instructions and tips are given in the context of an overall process. Different phases include: gathering customer insights, ideation/brainstorming, visual thinking, prototyping, storytelling and scenarios.

A major section on strategy includes a section on how to evaluate existing business models, identifying problems, and brainstorming about possible solutions. Nintendo's Wii is featured. One problem with the traditional gaming model is that consoles are sold at a loss to a relatively small market. By eliminating the huge cost of gaming platform development and adding motion-controlled games with a family focus, the market grew much larger.

The design and layout of the book is equally delightful. It is a cross between a Powerpoint pitch and a regular book, and is easy and fun to read.

The only negative I can think of is the binding. I don't know the lingo, but basically, the front and back (hard) covers are not directly connected to each other. Between them are the sewn and glued sections of the book that are normally hidden. Unfortunately, the book seems to be flimsy. But this is a minor niggle.

Overall, this is a brilliant book. If you have any interest in business models, get it as soon as you can. I got mine by chance on a recent trip to Europe while visiting a colleague. I saw that it was not available yet in the US, so he traded me for my copy of an equally excellent book: The new business road test: What entrepreneurs and executives should do before writing a business plan (2nd Edition).

"Business Model Generation" is a breezy read and a well-organized introduction to several related topics including: basic types of business models, techniques and strategies for generating ideas and thinking creatively about them, along with process steps for moving good ideas forward.

PROS: Anyone new to these topics would likely have to read four to six separate books to get the broad coverage you'll find here. The authors have done a service for folks who want to come up to speed more quickly and each chapter has additional references for further reading. The designers also deserve some credit for a creative and varied layout that makes the text seem fresher and more enjoyable. You can feel good about yourself as you plow through 50+ pages in half an hour without fatigue. The bonus: this is a business book that won't have you drowning in business jargon.

CONS: As several reviewers have noted, there's breadth here but not as much depth on the core topics as some might want. Those expecting more may be disappointed and some may find the title a bit misleading. Probably more accurate if they called it "A *PRIMER* for Business Model Generation" instead of a Handbook. Finally, the small font sizes that a few reviewers mentioned will surely be difficult to read for those with less-than-great eyesight. The tradeoff here, given the book's open design, is that a bigger font might have added a bunch more pages.

I had hopes for this book, which is billed as a practical, hands-on guide and an antidote to clunky writing and inflated word count of most business books. The reality is that this book mostly provides a superficial and somewhat arbitrary tour of business concepts. It may be useful to you if you're encountering many of these concepts for the first time, but otherwise you're likely to be underwhelmed. Here, for example, is the book's final words on the matter of sales channels:

"The trick is to find the right balance between the different types of Channels, to integrate them in a way to create a great customer experience, and to maximize revenues."

That is indeed the trick! Does the book offer any insight into how one might pull off this trick, either in terms of specific strategies or compelling case studies? The answer is pretty much: nope. If you've literally never considered how different sales channels affect your business, then the book might provide a useful spark. Otherwise, don't expect to learn anything.

The portions of the book that do focus on specific strategies are in some ways worse, because they tend to be overly selective and fadddish. For example, the book devotes a few pages each to exactly five possible patterns for business models: unbundling, long tail, multi-sided platforms, freemium, and open. Perhaps useful as an extremely abbreviated summary of trendy business ideas in the early 2000s, the list seems more likely to lead entrepreneurs astray than yield any true insight.

From a practical standpoint, I think it's useful to have a systematic framework through which to analyze and compare business models, and if this book provides such a framework for you, then great. And at least it's a quick read. But don't expect to learn much from the content itself.

I really liked how the book is laid out. It is very readable and is definitely not boring. The information has been gathered by practical experts and therefore is quite useful. I also liked the logical structure of the book. The chapters flow very well. We used it for a few products we are developing and found very insightful gaps in our business model.

However, in the process of implementing the book, we also realized it does not talk about two important topics:
1. Competition
2. Risks

These are very important to any business plan and I am quite surprised why these topics are missing. We added these sections for our use. Perhaps the authors left this out for the second edition :)

This book is beautifully laid out and illustrated and the writing style is compelling.

If you're a college grad or first/second year web person, the book is great for you. Anyone with more experience, however, should avoid it. The concepts (building a platform, for example) are so basic and straight forward, that there's really no new information here that you can't learn by reading Techcrunch or completing an online MBA. The case studies, although great examples of each of the points, have been repeated ten times over (i.e. Apple releasing iTunes and the App Store).

I heard about the book from Steve Blank, who described it as an essential compendium to 'Four Steps to the Epiphany.' I would agree, if this is your first business. Otherwise, steer clear.

"Then He said, 'To what shall we liken the kingdom of God? Or with what parable shall we picture it?'" -- Mark 4:30 (NKJV)

You've probably heard the old saying that a picture is worth a 1,000 words. Well, this book has more illustrations, sketches, design flourishes, and graphic displays in it than pages so you can probably imagine how much content it covers. In addition to sharing ideas about business model generation, you'll learn about business strategy, change processes, story telling, design, and creativity . . . among other subjects covered in a few paragraphs or pages. If you haven't read many of the books about business innovation that have come out in the last ten years, you can just use this one to get a brief summary of the key ideas in each of those areas. So your cost per subject is almost nothing. What a bargain!

If you get bored easily, you will like this book. It covers most subjects in almost no space. By using small type, a lot of information is concentrated onto just a few pages.

A lot of my graduate business students tell me that they like books that teach them a lot of the technical terms that business people use. Business Model Generation is excellent for that purpose. It's jammed full of C-level business jargon and lots of flow diagrams of the sort that technology managers and engineers love to use.

So, what is a business model? "A business model describes the rationale of how an organization creates, delivers, and captures value." Got that? "This concept can be a shared language that allows you to easily describe and manipulate business models to create new strategic alternatives."

If that isn't clear to you, the authors offer nine building blocks that give you the whole picture:

1. Customer Segments
2. Value Propositions
3. Channels
4. Customer Relationships
5. Revenue Streams
6. Key Resources
7. Key Activities
8. Key Partnerships
9. Cost Structure

Each of these nine elements is conveniently broken down into still more subsegments of what to consider.

Fans of Michael Porter's work on competitive strategy will note the strong resemblances between this approach and his pioneering work of 30 years ago. But Professor Porter doesn't include as many graphics and his examples are much longer and more detailed. If you want to learn more about advantaged value chains, Professor Porter's work may be more helpful to you.

The book similarly borrows deeply from 20 other standard business and strategy references.

Who is the ideal reader for this book? I think it's someone who hasn't been introduced to business models before and has just been asked to work on developing one at work. The book seems to be aimed at people without much business education such as technologists and designers.

If you are such a person, be sure to take notes on where to find the examples you want to refer to. There's no index to the book and you'll be thumbing through all the pages to find what you are looking for.

The approach emphasizes a small group of people doing the business model generation for a business or a company. That's pretty typical of a venture being formed (venture capitalists always want to know what the business model is), new ventures, and smaller enterprises that need to make a big change in direction.

The recommended approach is 180 degrees away from what many business model innovating companies do which is to encourage stakeholders and employees to continually develop low-key, inexpensive experiments and then to expand the successes.

I always find books such as this one more helpful when they teach me about businesses I've never studied before. So if you don't know about the Swiss private bank, Pictet, France Telecom, KPN, Vodafone, Bharti Airtel, Siemens, book publishers, LEGO, Metro in Stockholm, Google, game console makers, Apple, Flickr, Red Hat, Skype, REGA, Gillette, P&G, Glaxo SmithKline, InnoCentive, Amazon, Microsoft, and Yahoo, you'll get some new knowledge. You may find that you'll have to do more homework on your own in many cases. Most of the references are 75 words or less.

The book was co-produced by hundreds of contributors. It shows. There's a lot here. Much of it is from the service provider perspective (consultants, design companies, and researchers), but you can probably get a sense of who you want to hire by reading this book if you find that you cannot implement what it tells you by yourself.

Over the last 35 years, I have interviewed hundreds of successful executives who created business model innovations that changed their industries in major ways. I must comment that this book is a lot more complicated than what those practitioners think about and do. So it's possible that this book is capturing an emerging practice that will obsolete how all business model innovation is done. But I don't think I've ever met anyone who did it this way. Most of these practices are normally applied to developing new products, redesigning old products, to repositioning offerings, and adjusting the value chain.

This book is getting buzz in the startup community these days. I read through it a week or so ago, and it is a useful addition to the entrepreneur's library.

The book has five major sections. In the first, the authors introduce their notion of a business model canvas broken down into nine constituent parts. Some of these parts are obvious things that anyone trying to think about a business model would examine such as customer segments, value proposition, channels, customer relationships and revenue streams. The canvas adds in the other pieces (key resources, key activities, key partnerships and cost structure) and adds an organizational overlay that lends itself to analysis. The second major section takes a look at five different business models and fits them into the canvas. The third section, called "Design," describes various techniques such as visual thinking, ideation and prototyping, "that can help you design better and more innovative business models." The Strategy section then takes the earlier concepts and combines them with other strategic approaches such as SWOT analysis and Blue Ocean strategies in order to determine where opportunities for improving models may lie. In the final major section, "Process," the authors lay out a roadmap for running a business model design initiative.

Note that much of the book relies heavily on concepts and work originated by others. This is actually a great strength since it pulls together a lot of different theories and presents them in an easily digested form. The writing is accessible, and it may be that many of the concepts are more easily absorbed here than in the original source materials (all of which are conveniently referenced in case you want to explore further).

The notion of the canvas is new, and it does have an organizational elegance about it that is appealing. One of the points in the first section is that the first five constituent parts of a business model are all about value, whereas the final four are all about efficiency. This makes it easy to see why it made sense for Amazon to unbundle its businesses into an e-commerce line and an IT infrastructure management line.

Aside from a few styling miscues (tiny white print on a black background on some of the pages, really), the major complaint about the book from me -- and many others -- is that it lacks depth. Most of the case studies are short and the answers are dished up without consideration of the iterations that must have been required to get there. This book is trying to present a generalized way of looking at business models -- and I would say that it succeeds very well at that task -- but nothing beats seeing the concepts applied in real time rather than in retrospect. For people that are interested in seeing the canvas in action, I highly recommend reading about the Lean Launchpad project at Stanford on Steve Blank's blog. Think about it as an advanced class after you read the book in the introductory class.

The other reviewers have already told you what the book says... I would like to tell you what the book can do. Knowing how your business is organized... from who your customers are, to what process you use to deliver your value proposition, to how that creates your revenue streams... all good stuff, and useful. But, you either grow your business or go out of business. There is no standing still. That S.O.B. down the street wants your customers. You need to find new ways to keep them. This book gives you a pattern to not only identify your current business model, but by using the same tools, to also figure out ways to build tomorrow's version of your business.

In fact I would venture to say that there is more information in the book on planning the future than there is on defining your current business model. (If you are just getting started figuring out your business model - this book will help you too; but I suspect that most readers will already be in business - I doubt most rookies would use the phrase 'business model generation' and therefore will come across this book further down their entrepreneurial path.)

And my highest compliment of all is that this is the first business book that I have encountered that is friendly to visual thinkers. Although its an illustrated business book, it feels more like an annotated illustration to me. As most of my staff are designers and artists by education, this method of presenting the information was particularly useful to us.

This is the type of book I hate the most, form over function. Not taking about how well it can prop open a door or even out that table leg.

First off a big wow, I am impressed at how good the book looks. Alan smith of the movement design did this. Love the photos and just the hand drawn pics- it's just great. Second thing- good for you, writing a book, it's tough work, you are bound to have some people love it and some hate it. Even though I think it is a steaming pile of excrement, it certainly does not mean it could be valuable to some one some where. This is just my opinion.

Now the bad. For me, I am left with the book feeling cold, and there is nothing new here. I can tell that the author and co-writer are academics with no real world experience. Degrees, where you taught, how many letters behind your name mean nothing, in business it is the result. Kind of like those people you meet that when asked "what do you want to do with your degree?", they answer "teach".

This whole book is geared towards selling books, the content is filler. Again, I like the look of the book.

If you, as a business person could invent the type of business he is suggesting you are 1 (like apple) of a billion companies in the entire world or 2 a patent troll. Why troll? Because it ticks all the boxes that inexperienced/academic/banker types think what makes a good business. There are plenty of "bad" businesses models out there that are in competitive industries that are not "sticky" and that have no
reoccurring revenue streams. BTW I can always tell investors/bankers who know nothing about business
because one of the first questions they ask is how many customers are on long term contracts
(read almost unbreakable and favors the vendor) when it is a manufacturing or service type business. Basically it is almost impossible to have reoccurring revenue if you make something or its usually at a lower margin and everything is switchable.

So if you are deluded enough to think that groupon (checkout how much they loose), linkedin, skype, or facebook type internet only companies really create value, jobs and strengthen the country, then read this book.

But, if you are the type that says these types of companies create less jobs, make nothing, and contribute nothing then you are in the majority. None of the models presented make money for shareholders or outsiders, only the insiders and only when they sell or flip the business to the next big sucker. Try this test, go to these sites on your browser, open them even all at the same time and then shut off your monitor or shut off your computer, then look around or better yet look outside- and ask where is the value?

Sorry, going back to the book;

Even the real life examples are weak-
Swatch, Wow, so the swiss after being decimated for years (decade) by digital goes low cost. Innovative and highly responsive? no. Now they are stifling innovation by closing ETA from selling movements to independent watch makers in an attempt to drive down the market share by companies that don't own.
ING bank online- great a bank online, what about everbank no mention?
Zip car or any car sharing company- none of them make money. The model doesn't work for users- it's always cheaper to just rent a car.

Basically this book is a waste of time for SMB or owners that do under 1 billion in sales. If you have a company that throws off 100m in net profit a quarter- really how hard is it to innovate and try a new division? let's scale that to smb's who could divote say 250k a yr to R&D how much would that get them?

My advice if you are an owner of a SMB/medium sized business, it's not about you, it's about the customer and if you are stuck(ie balance sheet could be better), hire someone you wouldn't normally consider and create real ownership for that role. Fresh eyes.