evolution and digital design business models

The rise of disruptive digital business models.

Darwinism goes digital – how will businesses adapt or die?

The rise of disruptive digital business models & © digital wellbeing labs 2012

I am a designernota business man

For a designer business models used to be simple

development

manufacture

retail

Gillette - handle & razor bladeHP - printer & cartridgesVodafone - phone & airtimeAdobe - reader & Indesign etc.

Embodiment of ownershipaccess to entertainment, personal media and communication

The internet has enabled radically new (disruptive) b-modelseBayAmazonGoogle AdsenseAirbnb

Demise of products we ownExplosion of services we use

SpotifyStreetcar / Zipcar Ecomodo

Shifting value perceptionsTowards seamless accessibility and habitual choice

What is more valuable?access vs ownershipmanaging value perceptions and creating mental models

What is more valuable?access vs ownership

http://arstechnica.com/microsoft/news/2009/05/microsofts-next-apple-price-attack-zune-pass-vs-itunes.ars

Shifting value expectationsThe face of free

Customer perception of value

own use

how much can one own and consume ?

pay per use

subscribe

The perceived value of free

App usage patternsThe rise of disruptive digital business models & © digital wellbeing labs 2012

Technology convergence affords ever new interactions between context, content and social relationships consequently value perceptions are in perpetual flux.

Consumer behaviour continuous to change BandwidthAccessibilityTrustCustomisation

Business models driven by the internet and reacting to this flux seem to follow evolutionary tendencies.

usefulusabledelightful

usefulusabledelightfulviable

usefulusabledelightfulviableNow the business model is an integral requirement that shapes digital design.

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Additional information Booking references

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Business Model integrationacross all customer engagements

online sales pdf (paper) ticket

New UX design tools ?business model canvas

www.businessmodelgeneration.com

Ecology Technology evolution

Ecology

Geography of Social Networks

Network Economy

Value is added through social networks operating on large scales.

Changing business modelssocieties & economies

huntergatherer

agrarian industrial information

Emergent species requires a new ecology to operate in

What does this map show?

Coffee selling shops in London

New business models driven by the internet

Bike repair + cafeBookstore + cafeBookstore + restaurantFashion + barLaundry + cafeBank + design shopBank + work loungeBarber + nail studio + money transferInternet + cafe

Business opportunitiesthrough cross-breeding

Introduction : What is evolution ?

EvolutionThe process of change over generations.

EvolutionThe diversity of models evolves by means of mutations, genetic drift and selection.

Selection1_hereditary materials, genes2_produce more offspring than the environment can support.3_variations among offspring through mutations or reproduction

Selection1_design patterns2_rapid growth

3_unexpected use cases and mergers

A brief history of business models on the internet not necessarily affected by evolutionary forces.

Period β experiments and visions

1979 book Future Cities: Homes and Living into the 21st Century

Apple NewtonThe rise of disruptive digital business models & © digital wellbeing labs 2012

Period 1emulate existing business models but apply to new infrastructure._the World Wide Web_Brochureware

Period 1

Web 1.0 vs CD-romWhen business models didn’t transfer.

Period 1.com crash equivalent to a meteorite

Period 2realisation of the networkemergence of social media.

_The semantic web

Period 2realisation of the evolutionary nature, similar to the cambrian explosion

Evolution is driven by death

Period 2

Disappearing geographical borders, shrinking distances, instant communication lead to competition on a global scale.

Period 3Seamless, continuous, integrated, fully mediated

Period 3

NIN Nine Inch Nails

Period 3

NIN Nine Inch Nails

TapTaprevenge

Free $ 5.00

music + game

Period 3

NIN Nine Inch Nails

NIN access app

music + social network

Business models : Oh no ... not today

Evolving business modelsBrokerage : charges a fee or commission for each transaction it enables.

Marketplace ExchangeBuy / Sell FullfillmentDemand collection system (priceline)Auction Broker Transaction Broker - 3rd party payment fullfilment - PaypallDistributorSearch AgentVirtual Market Place - hosting services at a price

Advertising: The advertising model works best when the volume of viewer traffic is large or highly specialised. PortalClassifiedsUse RegistrationQuery-based Paid Placement -, automate what you see, when.Contextual Advertising / Behavioral Marketing Content-Targeted Advertising - Googe adsenseIntromercials Ultramercials

Infomediary: analytical data of consumption or navigation habits and patternsAdvertising NetworksAudience Measurement ServicesIncentive Marketing - loyaltyMetamediary

Merchant model : curatorVirtual Merchant - e-Tailer online only eg amazonCatalog MerchantClick and Mortar (barns & Noble)Bit Vendor

Manufacturer (Direct) a company that creates a product or service to reach buyers directly and thereby compress the distribution channel.Purchase -- the sale of a product in which the right of ownership is transferred to the buyer.LeaseLicenseBrand Integrated Content

Affiliate : passing trafficBanner ExchangePay-per-clickRevenue Sharing (iTunes click thru)

Community : shared resourcesOpen Source - Instead of licensing code for a fee, open source relies on revenue generated from related services like systems integration, product support, tutorials and user documentation.Open Content - wikipediaPublic Broadcasting - user-supported model used by not-for-profit through voluntary donations. Social Networking Services - Social networking services can provide opportunities for contextual advertising and subscriptions for premium services. (FLickr, Friendsetr, Flickr)

SubscriptionUsers are charged a periodic -- daily, monthly or annual -- fee to subscribe to a service. It is not uncommon for sites to combine free content with "premium"Content Services : - NetflixPerson-to-Person Networking ServicesTrust Services : Internet Services Providers : AOL

Utility : pay as you go "on-demand" model is based on metering usage, or a "pay as you go" approach. Unlike subscriber services, metered services are based on actual usage rates. ISPsMetered Usage : Metered Subscriptions : slashdot

Evolving business modelsdesigning customer engagementFrequency - repeat useDuration - dwell-time

creating a context of use to drive towards embedded b-models

Darwinism : Is it all about the survival of the fittest? Are there successful niche opportunities?

NichesOne Million Dollar page

NichesI am rich AppValue?

NichesRed Paperclip - 14 barters

http://oneredpaperclip.blogspot.com/

NichesRed Paperclip - 14 barters

One red paper clipNovelty pen

Ceramic doorknobCamping stove 1,000-watt generator Beer keg with neon sign Snowmobile

Trip to Yakh A large van One recording contract One year rent-free in Phoenix Afternoon with Alice Cooper Kiss Snow globe Hollywood movie role House in Kipling

Game ChangersSquare,small transaction processing services

Game Changerswww.khanacademy.org

Darwinism : In a connected world ... When ecologies are merged ...

http://images3.realestate.co.nz/edi/genilnk001/photos/L11008-1.jpg

ecology

When foreign species are introduced in formerly closed ecologies, soon a dominant species will outcompete the native species. On a global scale this leads to fewer species, although ultimately from perspective of evolution this competition will determine the best suited solution.

Dying species

Network effect instantly distributes, recycles and accelerates ideas.No originality, reusing patterns

Each ecological niche affords optimised solutionAcceleration to optimised solutions.

Each ecological niche affords optimised solutionSolutions are homologue

Are we still evolving at the same speed?

1920 1930 1940 1960 1970 1980 1990 20001950

Are we in a period of optimisation & stagnation?A picture of you now, and compared to styles 15 years back will not show many differences.

Are we in a period of optimisation & stagnation?Acceleration of evolution of ideas leads to converging solutions and stagnation of progress.Speed of development has slowed and will only be perceivable at an evolutionary pace in the long term future.

We seem to have gained more choicesWith increasingly less variety

Network effect instantly distributes, recycles and accelerates ideas.No originality, reusing patternsShould we become ignorant again?

Evolution is inherently non-deterministicthree questions

three questions_What b-models are about to emerge?

_How can products and services be designed to become more adaptive to evolutionary forces ?

_Will evolutionary business models kill the designer?

Thank You!Alexander Grünsteidl

alexander @ method.comwww.method.com www.digitalwellbeinglabs.com

evolution and digital design business models

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