Latest / The Innovation Show / EP 670 Alexander Osterwalder on the Value Stack: 6 Patterns of Value Creation

Transcript

EP 670 Alexander Osterwalder on the Value Stack: 6 Patterns of Value Creation · The Innovation Show

• 0:00
  when Nintendo launched the Wii, it was actually an inferior console,
• 0:03
  they said, "We're gonna focus on casual gamers." what do casual gamers
• 0:08
  not like is complicated consoles.
• 0:10
  I don't even know how to use, you know, to manipulate the things.
• 0:13
  The games are too hard.
• 0:15
  Gaming, not for me.
• 0:16
  So they said, "If we make games radically simpler, you control the games with motion
• 0:23
  control, you don't need to learn how to use these things anymore, then we can
• 0:28
  unlock a market that wasn't addressed so far with game consoles." So Nintendo
• 0:34
  unlocked a completely underserved market by simplifying the game console.
• 0:40
  So that's the ease booster.
• 0:41
  Thanks as always to our sponsor, Kyndryl, who runs and reimagines the
• 0:45
  technology systems that drive advantage for the world's leading businesses.
• 0:49
  With a unique blend of AI-powered consulting built on unmatched managed
• 0:53
  service capability, Kyndryl helps leaders harness the power of technology for
• 0:58
  smarter decisions, faster innovation, and a lasting competitive edge.
• 1:01
  You can find Kyndryl and a plethora of brilliant thinkers that have been on the
• 1:05
  Innovation Show at K-Y-N-D-R-Y-L.com, and go to the institute, /institute, to
• 1:12
  find brilliant thought leadership from a wide range of brilliant thinkers.
• 1:18
  Last week, we had on a guest I love to have on, must be episode 10 with him
• 1:24
  by now, but I keep learning from him, keep learning from so many of his books.
• 1:28
  And last week, I told you he'd be back to talk about this brand-new
• 1:31
  tool called the Value Stack.
• 1:33
  Now, that book comes from one of my favorites.
• 1:36
  Alex is well known for the business model generation work, but this
• 1:40
  book, The Invincible Company, is probably one of my favorites of his.
• 1:43
  And he plucked out pieces of this book in a world of AI, and then
• 1:47
  came up with this brand-new tool.
• 1:49
  So he's with us to share, again in a world first, that brand-new tool.
• 1:54
  He is Alexander Osterwalder.
• 1:55
  Welcome to the show.
• 1:56
  Thanks for having me.
• 1:57
  Every time a real pleasure to be here
• 2:00
  It's great to have you back, man.
• 2:01
  Let's get stuck in, ', you know by now there's a huge demand for
• 2:05
  not what, but how, and that's what your frameworks are all about.
• 2:10
  And this is a brand-new, hot off the press tool.
• 2:12
  You've barely put the slides together.
• 2:14
  They're hot off the digital press.
• 2:16
  So let's share them with the world
• 2:18
  Very cool to be here because one of the things that we're doing
• 2:23
  with Strategyzer right now is , we stopped writing books because we're
• 2:26
  shifting from books to playbooks.
• 2:27
  So the stuff you're gonna see is what we put into our playbooks
• 2:31
  to make them ultra applicable, 'cause our books are very dense.
• 2:34
  There's a lot of stuff in there, and people tell us, "Can't you make, you
• 2:37
  know, like the dummy series you know, from Wiley?" So we said, "Well, let's not call
• 2:43
  them dummy series, but what we want is to move towards outcomes." So one of the
• 2:48
  big outcomes that people are trying to achieve is, like, a clear formulation or
• 2:53
  articulation of their value proposition.
• 2:56
  when we started working on that, we thought, like, "Okay, there's something
• 3:00
  we did in The Invincible Company, which was business model patterns." we've never
• 3:06
  done that for value propositions because we were unsure if it was even feasible.
• 3:11
  But then somehow even I said, "Okay, let's do it. It's time." So we came
• 3:16
  up, and I'll show you this, with the patterns of value creation.
• 3:22
  And where did that really come from?
• 3:25
  It come from the desire to help people, like, navigate in a library of patterns
• 3:30
  so that they could get inspired.
• 3:32
  You know, how you can create value with your products and services.
• 3:35
  So we have the value proposition canvas.
• 3:36
  It's quite an old tool now, over ten years.
• 3:40
  But what we said is we want patterns of value creation, so we came
• 3:44
  up with six patterns, and I'll briefly walk you through them.
• 3:49
  Then once you say how you're creating value in different ways,
• 3:52
  then we get to the value stack.
• 3:54
  We need to actually say which, which, benefits, which value creation is most
• 4:00
  important to the customer, and then we obviously need to go and test that.
• 4:03
  So this came from the book The Invincible Company.
• 4:07
  Then we had the value proposition book, but we, we had to
• 4:10
  come up with these patterns.
• 4:11
  So we came up with six, and I'll just give you a little bit of
• 4:15
  an insight into them 'cause it's pretty fun, what we came up with.
• 4:18
  So the first one is the ease boosters, some of, some of these
• 4:23
  might seem like common sense, but it's not common practice, and
• 4:27
  we're helping you in, to formulate them maybe in a more explicit way.
• 4:30
  So the trigger question here you can ask yourself for your products and services,
• 4:35
  what could we make radically simpler, easier, just much faster for customers?
• 4:43
  And the example I'll use, , just to take a first kind of a business to
• 4:47
  consumer example- Is, the Nintendo Wii.
• 4:52
  what a lot of people don't know is when Nintendo launched the Wii, it was actually
• 4:55
  an inferior console, but they focused on something that was very different.
• 5:00
  They said, "We're gonna focus on casual gamers." what do casual gamers
• 5:05
  not like is complicated consoles.
• 5:07
  I don't even know how to use, you know, to manipulate the things.
• 5:10
  The games are too hard.
• 5:12
  Gaming, not for me.
• 5:13
  So they said, "If we make games radically simpler, you control the games with motion
• 5:20
  control, you don't need to learn how to use these things anymore, then we can
• 5:25
  unlock a market that wasn't addressed so far with game consoles." So Nintendo
• 5:31
  unlocked a completely underserved market by simplify- simplifying the game console.
• 5:39
  there's a lot of examples, like Apple has been big on this and everything,
• 5:42
  but it's really one I like here because they unlocked a big market with an
• 5:48
  inferior product by simplifying something that was too complicated for them.
• 5:52
  So that's the ease booster.
• 5:54
  Then we have the access booster.
• 5:57
  is about taking a valuable asset and making it accessible to many, many,
• 6:03
  many more people than had access before.
• 6:06
  So you take something that was limited, almost like a luxury good, and you
• 6:10
  make it accessible to a lot of people.
• 6:13
  So I'm a big fan of historic examples.
• 6:16
  So a historic example is the Ford Model T. That-- Cars were a luxury good.
• 6:22
  They were handcrafted, a little bit like carriages.
• 6:26
  And then Henry Ford said, "I'm actually gonna bring the price down to make it
• 6:30
  accessible to a lot of people, including my factory workers." So he boosted
• 6:36
  access by bringing down the price.
• 6:38
  So for each one of these actually patterns, there are a lot of flavors.
• 6:42
  So this is what we call the price booster, buster.
• 6:46
  So there are different flavors here as well.
• 6:48
  Then we have the confidence builders How could you help your customer
• 6:53
  feel safe, reassured, or confident when they adopt your offering?
• 6:58
  So in some contexts, you can make customers more, you know, confident.
• 7:04
  Like say, say Airbnb had to do that because they were, you know, people
• 7:07
  were renting out their homes, so you're going to a private person.
• 7:11
  So those are the traditional ones.
• 7:13
  But sometimes, you know, confidence, trust, or reliance
• 7:16
  is the value proposition.
• 7:18
  So you might remember when FedEx launched overnight delivery.
• 7:23
  Well, it was the trust that your package is gonna arrive tomorrow.
• 7:27
  So that's a confidence builder, not a simple one where it's a little bit
• 7:31
  more a part of your value proposition.
• 7:33
  This is the value proposition.
• 7:35
  So that's the, the third category.
• 7:38
  we have the really radical ones, what we call the value catalysts.
• 7:43
  They outperform anything that existed on at least one dimension.
• 7:48
  It's almost like they create a new market.
• 7:51
  And a great example is Google Ads, because up to Google Ads, you
• 7:58
  probably were wasting fifty percent of your ad budget on who wouldn't
• 8:03
  click your ads, but you didn't know.
• 8:05
  Then comes Google Ads, where you only pay for performance.
• 8:08
  So on that dimension of my ads produce results, you had a hundred
• 8:15
  percent guarantee that you were only paying for what's working.
• 8:18
  That's a really, really big thing.
• 8:20
  And then we have the identity builders here.
• 8:22
  It's really about, you know, self and identity.
• 8:25
  And you'd say, "Oh, but that's only for business to consumer," typically,
• 8:28
  you know, Har- Harley Davidson.
• 8:30
  But turns out, even in business communities, think of, you know, the
• 8:34
  communities that Salesforce built around their developer community.
• 8:38
  That's the same thing.
• 8:39
  People, you know, feel like that's my identity now.
• 8:43
  And then, um, going to identity, identity builders, are really about identity,
• 8:50
  and that's where I put the, uh, the, uh, uh, Salesforce trailblazers.
• 8:54
  And then we have, uh, the market shapers.
• 8:59
  are people who change the rules of an industry.
• 9:02
  So we're not looking at the business model of how that changed it, but that
• 9:04
  value proposition change in indu-industry.
• 9:07
  In this case, I'm gonna give you an example of a market creator.
• 9:11
  So Diners Club created the value proposition of credit cards.
• 9:16
  Didn't exist before.
• 9:17
  So all of a sudden you could now go into a restaurant, pay with a card with plastic.
• 9:22
  Didn't exist before.
• 9:23
  Now, obviously, they had to change the-- they had to create
• 9:26
  the business model behind it.
• 9:27
  They needed to get the merchants to accept this as well, the restaurants.
• 9:30
  But they created a completely new value proposition that didn't exist.
• 9:34
  Now, in business to business, that would typically be an Amazon Web service,
• 9:38
  which is also an access booster.
• 9:40
  So Amazon Web Services made world-class infrastructure accessible,
• 9:45
  and it wasn't accessible before.
• 9:46
  So you could actually perform well on several of these patterns.
• 9:49
  But that was just to give you an idea of the, uh, different,
• 9:55
  uh, value propositions.
• 9:57
  Now, I do wanna show you one last cool thing after this huge monologue.
• 10:01
  Will be interested in Aidan, but I'll just show you this and then we
• 10:05
  can talk while I'm showing you this.
• 10:07
  We created an entire-- this is our shift from books to playbooks.
• 10:11
  We created-- Instead of writing a book on these things, we created a playbook
• 10:15
  where you can immediately apply the patterns to your value proposition,
• 10:20
  to your products and services.
• 10:22
  And because Alex said it there and he showed you the playbooks
• 10:25
  that are available, he's kindly given us a 20% discount code.
• 10:29
  So if you go to strategyzer.com and I'll link to where to find that.
• 10:34
  There's a coupon code entry point, and it's INNOVATIONSHOW20,
• 10:38
  all capitals, INNOVATIONSHOW20.
• 10:40
  You'll get 20% off those codes.
• 10:43
  And also, as an extra booster, a value booster, Alex, I'm learning,
• 10:47
  I'm learning on the fly here.
• 10:49
  I have a copy of The Invincible Company, a digital copy up for
• 10:53
  grabs that is there for you.
• 10:55
  The question is, Alex showed a slide behind him, and in one of the slides
• 11:00
  there was a gentleman with him.
• 11:01
  Who is that gentleman?
• 11:03
  I know who he is.
• 11:04
  A very good man, brilliant man I met, and he is a coauthor of
• 11:08
  Alex, of one of his first books.
• 11:10
  So that's your little hint.
• 11:12
  Alex, for people who wanna find out more about you, about this tool,
• 11:16
  about your toolkit, I was, I was wanting to use it myself actually
• 11:20
  for my own business as well.
• 11:22
  Where is the best place to find you, the toolkits, et cetera?
• 11:29
  you know, Alex Osterwalder, and you'll get right to, to, uh, our website.
• 11:34
  And we share a lot for free that you can download.
• 11:36
  You get all of these, tools that you can download.
• 11:40
  But to apply them, I'd suggest you check out the playbooks because that's really
• 11:44
  where we wanna make these world-class practices accessible to everybody.
• 11:49
  So everything we learn with these global leading companies, we're
• 11:53
  putting those slowly, slowly into the playbook so anybody can benefit from
• 11:57
  what we do for the big corporations
• 12:00
  And a reminder, anybody who's around Dublin looking for a keynote speaker
• 12:05
  in December, Alex is here with me.
• 12:07
  We're doing two days, December 1st and 2nd, working with Enterprise Ireland
• 12:11
  clients and their client companies.
• 12:13
  So he's gonna be around.
• 12:15
  We're gonna be spending some time together.
• 12:17
  He might extend his trip.
• 12:18
  If you need a keynote speaker, give me a shout, give him a shout.
• 12:21
  Get in touch with Strategyzer on Strategyzer.com.
• 12:25
  Alex, always a pleasure, man.
• 12:27
  December can't come quick enough for me.
• 12:29
  It is a pleasure.
• 12:30
  And thank you for sharing these new playbooks with us
• 12:32
  first on the Innovation Show.
• 12:34
  Alexander Osterwalder, thanks for joining us
• 12:37
  Looking forward to seeing you in Dublin.
• 12:38
  It's gonna be fun
• 12:40
  - Thanks as always to our sponsor, Kyndryl, with a unique blend of
• 12:43
  AI-powered consulting built on unmatched managed service capability.
• 12:47
  Kyndryl helps leaders harness the power of technology for smarter
• 12:50
  decisions, faster innovation, and a lasting competitive edge.
• 12:54
  You can find more about Kyndryl at K-Y-N-D-R-Y-L, kyndryl.com.