Best Selling Author Alex Osterwalder Talks Business Strategy, Innovation & Events
Alex Osterwalder is one of the foremost thinkers on business strategy, innovation and entrepreneurship in the world.
He is the author of the book Business Model Generation, which has sold over a million copies in thirty languages, and he’s authored two more books: Business Model You and Value Proposition Design. He’s also the co-founder of strategyzer.com and a keynote speaker on business strategy, innovation and entrepreneurship. Oh, and he’s also founded successful business events like Business Design Summit.
Last week he agreed to have a chat with us about everything from how to quickly test new event ideas to getting the most out of your keynote speakers; how to approach business model innovations and create disruptive value propositions to really understanding your customers’ needs.
This is a must listen/read for anyone interested in entrepreneurship, innovation and business strategy!
Play Podcast
You can download the full podcast here (or listen to it online).
What will you learn? (Click the links to be taken to the correct part of the transcript)
Some key quotes:
On the purpose of the business model canvas and value proposition canvas: “What we’re trying to do is create tools that allow us to have better strategic conversations, to create better business models, to improve our business models, to create value propositions to really fit with what customers want, and do this all with tools.”
On which comes first, business model or value proposition: “In reality what you need to do is not ask yourself: Do I start with the value proposition, getting the value proposition right? Or start with the business model? You do it back and forth, between the two, all the time.”
On finding great ideas: “The first thing I would recommend is to not fall in love with your first ideas. Inevitably, you’re going to be wrong”
More on finding great ideas: “Don’t think you need to find the perfect idea, take your vision, take your direction and start prototyping and trying out things.”
On turning ideas into a business: “Ideas are free and cheap. What’s important is that you take your vision and your idea and you use these tools and processes to turn them into not just another idea, but an idea that becomes a business: that’s the hard part.”
On research: “You should never forget that what people tell you, is usually not what they’re going to do. Not because they want to lie to you, but just that actions speak much louder than words.”
On innovation at established businesses: “The challenge of the twenty-first century is to actually think of reinventing yourself, while you’re successful. Because if you don’t do that, you might actually end up like Nokia or Kodak that just missed the moment to reinvent themselves…don’t wait until you have to [innovate], because that might be too late. ”
On filling out the canvas: “So what you really want to do is not look at the individual pieces, but you want to look at the story. What story connects all the building blocks of your business model together?…When we talk about the value proposition, you want to be able to tell the story of how you’re creating value for your customer.”
On understanding customers: “So start asking yourself first: what are my customers, or my potential customers, what are they trying to get done? And then ask yourself: how do they measure failure? What does failure mean to them, regarding that particular job to be done? And how do they measure success?”
On creating successful new events: “The art is to create unbelievably cool new value propositions, with a profitable and scalable business model.”
On being a good keynote speaker: “I insist, that I’m not going to do a keynote, if I can’t make it interactive. Because I think it’s torture to listen to most speakers for longer than twenty minutes. ”
On finding your style as a speaker: “The moment I replaced my slides with images, I was much freer to forget maybe two bullet points but to deliver three extremely well with the right visuals behind it. So that was for me liberating, that was Number One.”
On bullet points: “I spend a lot of time on the design of the slides. I ban bullet points. Bullet points are a crime. They shouldn’t be there.”
Play Podcast
You can download the full podcast here (or listen to it online).
The full transcript:
Intro
MARK: Hi I’m Mark Walker from Eventbrite and today I’ve got the pleasure of interviewing Alex Osterwalder. Alex, thank you for joining us.
ALEX: It’s a pleasure to be with you.
MARK: Fantastic. So for those of you not familiar with Alex and the work that he’s previously done: Alex is the inventor of the business model canvas and, more recently, the value proposition canvas.
He is the author of the book Business Model Generation, which has sold over a million copies in thirty languages, and he’s authored two more books: Business Model You and Value Proposition Design. He’s also the co-founder of strategyzer.com and a keynote speaker on business strategy, innovation and entrepreneurship.
Alex, that’s a pretty impressive list. I imagine you must have run out of New Year’s resolutions to make!
ALEX: (Laughter) There’s always new stuff to do and actually that list shows that it might also be helpful to be more focused, so it’s one of my New Year’s resolutions: to work in a more focused way.
Understanding the business model and value proposition canvasses
MARK: OK. That sounds like a good resolution. So, to kick things off, again, for anyone who isn’t familiar with your previous work, could you please tell us a little bit more about the business model canvas and the accompanying book Business Model Generation? What were you setting out to achieve with that?
ALEX: So with all the work we do, and when I say ‘we’ it’s the team at Strategyzer, my co-authors like Yves Pigneur and everybody who’s working with us around these things.
What we’re trying to achieve is to turn business practitioners into users of business tools; meaning that rather than sitting around a table and talking about business models – why don’t we use business tools more? Just like a hammer or a screwdriver, you know, if you’re a handyman or handywoman, I think we can create tools for business as well.
We actually do that when it comes to very concrete stuff, like accounting, finance, but when it comes to strategy, innovation and entrepreneurship or new value propositions, we don’t have this habit of using tools, business tools, we prefer just to talk. And that usually ends up with a lot of blah, blah, blah.
All of us have certainly had this experience of sitting in a meeting and it wasn’t concrete enough and a lot of talk, maybe interesting, but all over the place, and then very little results.
So what we’re trying to do is create tools that allow us to have better strategic conversations, to create better business models, to improve our business models, to create value propositions to really fit with what customers want, and do this all with tools.
So to leverage our creativity, to leverage our experience or knowledge with business tools, and basically do a better job at what we’re doing.
MARK: Right. Absolutely. That makes sense.
And the way I look at the tools that you’ve provided to businesses along with your team, you use the example of having a hammer. If you’ve got a hammer, you can’t help but use it. You want to hammer a nail with that hammer. So the way I see it is these tools are enabling action as well. They are forcing people to get away from just talking about things and actually creating a model that will help them take action and make things happen. Is that a fair assessment as well?
ALEX: Yeah. It’s an absolutely fair assessment and I think you point out something very important and interesting which is: if you have a hammer, everything becomes a nail.
And sometimes people say: “Yes but your business model canvas doesn’t do this, and doesn’t do that.” It’s not supposed to do everything.
To create a great business you need to get a lot of variables right. Like the business model, your value proposition, your organisational culture, so I think we’re going to need several tools. Not just the hammer, but also a screwdriver or a wrench. And that’s what we’re trying to do.
Number One: to create new tools where we think there are no good business and conceptual tools. I’m not talking about software here, for example, I’m talking about conceptual tools, and integrate the tools we’re creating with great tools that are already out there.
Often I think the sicknesses of the business thinker community or thought leader is often they have one tool, or one concept, and they say: “This is now religion and all you have to do this.” I think that’s far from what practitioners need, and what practitioners actually do.
If you look at consultants, if you look at executives, if you look at CO’s from large, small, medium sized companies, they weave together these tools that the thinkers provide, to create a toolbox. So what if the business thinkers actually did that, because that’s their job? Not to say: “Hey this is the religion, just use my tool.” But if we all came together and integrated out tools to create the best toolbox possible for business practitioners.
So in our last book, to give an example, Value Proposition Design, we didn’t say: “OK, we’re going to reinvent now testing business models and value propositions.” No, we build on Customer Development by Steve Blank and the Lean Start-up Movement by Eric Ries. And use that, and contribute new tools to that, but build on top of the existing knowledge.
Rather than reinventing the wheel and say: “We have the truth, we have the religion.” We try to create new tools that add to the existing knowledge and make it better, and we try to integrate the whole thing.
So, as a business practitioner, at the end of day, you have your toolbox to work on strategy, innovation and entrepreneurship, business model design, creating great value propositions. So you can really create a great business that way.
How to work with the Business Model & Value Proposition Canvasses To create sustainable businesses
MARK: Right. Absolutely. And you mention there that you will often need different tools for different contexts.
So we talk a lot here at Eventbrite about how the event industry can evolve; how new people can enter into the market and create new events and really be innovative with the way they disrupt the existing events environment. I guess the question is: which comes first out of the two particular tools that you’ve created – the business model canvas or the value proposition canvas? If you were a new business owner or an entrepreneur, which would you sit down with first and try to work with?
ALEX: So the reality, at the end of the day, is that you need a great value proposition, and you need a great business model. Sometimes people think that I just need to get the value proposition right, and then all the rest is going to fall in place.
It couldn’t be further from the truth, because…. I’ll just give you a different example, from a different industry. If you take Kodak, Kodak actually invented, or helped invent, the digital camera. They were amongst the first to create a digital camera. People loved it, and this value proposition was great. But unfortunately, through this new innovation, through this great value proposition, they were digging their own grave.
So a great value proposition is not enough: you need the right business model to support your value proposition, and have a scalable and profitable business model.
So in the event industry, you can come up with great value propositions to create a brilliant event, that’s going to blow people away. But, at the end of the day, you need to do that in a profitable way. It’s easy to create something that blows everybody away, what’s hard to do is to create it in a profitable way and, even better, in a way that can scale.
So in reality what you need to do is not ask yourself: Do I start with the value proposition, getting the value proposition right? Or start with the business model? You do it back and forth, between the two, all the time.
So you can start sketching out what I get for a value proposition, we call that prototyping. Start testing with customers. Then you’ll figure out: “Oh it has to look slightly differently.” But then you need to ask yourself: well, if this is the value proposition that customers want, can I actually offer that in a profitable and scalable way? Can I acquire customers and earn revenues from them in a more profitable way than just setting this up, which may cost me a lot of money?
So you move between these tools: the business model canvas and the value proposition canvas. You experiment all the time and test with your customers or potential customers, until you’ve got all of the pieces of your equation right.
So it’s really not one that comes before the other, it’s a back and forth; that’s the reality, it’s a pretty messy process. What you have to deal with is: how do I manage this messy process? How do I manage going between designing and testing, back and forth, and maybe throwing in this fancy idea of pivoting, because your move may be to a different business model.
But the great news is: today we have tools to do this. While it will remain a messy process, entrepreneurship, innovation, creating new stuff, will always be a messy unpredictable process, but now we have tools, and some knowledge, of how to apply these tools, that help us be more predictable.
It doesn’t mean because it’s a messy process that we can’t minimise risk and increase the success chances.
The process of finding great ideas
MARK: Right. And that idea of minimising risk is a really important one, I think, because risk is obviously inherent in any new business venture. A lot of entrepreneurs are characterised as these crazy risk takers, but actually the successful ones are the ones that minimise any risk that they possibly can do, and therefore maximise their (10.00) chances of success.
Picking up on that theme, anyone listening that is thinking of starting a new business, whether it’s launching an event, or a software company, or whatever the business may be, of course you’d encourage them to take a look at the business model canvas and the value proposition canvas in order to provide those tools to think correctly about the way they’ll approach their business and their value proposition. Is there anything else that you would recommend that they need to think about, as well as sitting down with those tools?
ALEX: So the first thing I would recommend is to not fall in love with your first ideas. Inevitably, you’re going to be wrong. Even if you have quite some experience, it’s very probable that your first ideas, you’re going to have to throw them away.
So liberate yourself from this idea of: “Hey I got the perfect idea, I need to search for the perfect idea and write a business…..” Think more like a designer who prototypes and throws away prototypes all the time. Even creates alternatives, why don’t you think about three alternatives for the same starting point?
So, an example, great recommendation. You have a customer segment in mind that you can access because you have an existing relationship with them or you have channels to reach them. Well prototype three different, radically different, value propositions, for that same customer segment and go into different directions.
And maybe prototype three radically different business models and think them through rapidly, always knowing that probably you’re going have to throw some of them away. So don’t get stuck with this idea that you need to figure out the perfect plan immediately: that you need to find the perfect idea.
Ideas are free and cheap. What’s important is that you take your vision and your idea and you use these tools and processes to turn them into not just another idea, but an idea that becomes a business: that’s the hard part.
Don’t think you need to find the perfect idea, take your vision, take your direction and start prototyping and trying out things.
Experiment as much as you can, beginning when uncertainty is high. If you do cheap tests, the more you learn, the more you can invest time, energy and money into making more expensive prototypes, maybe launching a prototype event or so, but forget that idea that you need to come up with a brilliant plan first. It’s just not the reality of entrepreneurship or creating a business or turning an idea into reality.
How entrepreneurs and #EventProfs can test if their new event idea is any good
MARK: Right. And I think the idea of prototyping and working in an agile way, they’re pretty familiar to those in the software industry, perhaps a little less so in the events industry. But you’ve clearly articulated what that means: it’s basically taking an idea and then testing it and seeing whether it works and if it doesn’t, not being afraid to ditch that, and moving on to the next one, or a slightly different variant of it.
Now one thing that I think would be useful for you to comment on here is in the software industry, it’s quite easy to do that to an extent, because you’ve got lots of software tools: you’ve got AB testing, you’ve got all sorts of other analytical tools that will tell you whether at volume and scale whether one variant is a bit more popular than another. Are there any hacks or ways that physical world businesses can do the same thing, like events? How could they cheaply and quickly test ideas?
ALEX: Oh absolutely. I think it’s just a question of creativity. So some simple things. Make it the simplest prototype that you can imagine.
So if you want to create a new event, you can talk to people and ask them would they be interested or not, but it’s probably not the best way to figure out if they could be interested.
What a better idea might be is to create a prototype brochure, a flyer, even knowing that you’re not going to run this event – you’re not looking for a venue, you’re not looking for speakers, you’re not looking for whatever – but you’re just creating the PDF. And you give that PDF to people.
But here’s a little trick, which turns it into a test. On that PDF that you give to a particular person, you put a link to more information, a link that you can track. Just one link that you can track for an individual person you gave the PDF to.
So if in the conversation they say: “Oh this is a great event, I’d really like to come.” And then you go back to your office and check if they ever clicked on it, and they never clicked. Well you get some real tangible data here for a physical business.
And if you do this with thirty people, and all thirty told you: “Oh this is great, I love your event, I want to come,” but nobody clicked on that link to learn more about it, then you have a pretty good indicator. It’s a very cheap and simple test. It’s a very good indicator that either they don’t care, or they have something that’s more important to them.
So that’s a pretty basic test that gives you more than just their opinion, it actually looks at the so called ‘call to action’. Because you should never forget that what people tell you, is usually not what they’re going to do. Not because they want to lie to you, but just that actions speak much louder than words. Especially with these kind of tests, to figure out if they really mean what they’re saying, and if they’re really going to follow up on that.
So you can do these kind of tests for any kind of business. So another place where you could apply it is – I hear a lot from people in medical device sector: “Oh our industry’s highly regulated, it’s hard to test, prototypes are expensive.” You can do the same thing with this little technique of tracking. You can go to hospitals, give these PDF’s maybe to doctors with the link on them, and you can learn a little bit better than if you just talk to them.
You start having some tangible data that is based on their actions, not just on their words. That’s what you want to look for. So you need to come up with ten, twenty, thirty of these tests and the limit is really creativity.
And I think it’s just an excuse to say that these techniques can only be used in the software on your web business. I think they can be applied everywhere, and I’m seeing this happening in very large corporations today that are in very physical product domain. Some of the greatest brands in the world out there with physical products are using these testing techniques today.
How established businesses (and events) can apply the canvas
MARK: Some great advice, thank you. So turning a little towards established businesses, can they also apply the business model canvas and value proposition? And also how often should someone who’s already gone through that process look to revise it and update it?
ALEX: So the interesting thing about the tools that we provide and the business model canvas and the value proposition canvas and many of the others, is that they apply to new businesses, and they apply to existing businesses.
And one of the things that surprised us, though, looking back, it’s pretty obvious, everybody has a business model or has to build a business model. It doesn’t matter if you’re an individual entrepreneur, a medium sized company or if you’re a large corporation, so these tools work for all of them.
Now, I think it’s a bit harder for existing organisations to reinvent themselves, because if they’re not in a crisis, they might be pretty happy with their existing business.
But the challenge of the twenty-first century is to actually think of reinventing yourself, while you’re successful. Because if you don’t do that, you might actually end up like Nokia or Kodak that just missed the moment to reinvent themselves. Because when a crisis happens, it does accelerate the sense of urgency, but it might be too late.
So to your question: when do I do this? And in what frequency? It’s all the time. Actually you need to create what some academics call a dual operating system. Which means: you need to run an execution business, where you’re streamlining your business, you’re making as much money as you can if you’re in a for-profit business, but at the same time, in parallel, you create a search business. A space where you have people that experiment and prototype new value propositions and new business models – all the time.
So one might say: “Oh, but that sounds like that that only works for Proctor & Gamble, or Nestlé.” No, you don’t have to be big to do this kind of experimentation, it just takes really this cultural space for some people to dedicate some of their time to creating value propositions and business models for the future. Some might fail, some might succeed.
But don’t wait until you have to, because that might be too late.
MARK: OK. So moving on from that, I think, hopefully by now, people should be pretty convinced that they want to be using these tools, and that they’ll enable them to either chart the future a little more successfully, or help create the right business for them if they’ve not yet started. Let’s dive into the nuts and bolts of the canvases a little bit more. Which are the segments, when you’ve worked with businesses, they have most difficulty?
ALEX: (20.00) So I think there’s just some general mistakes that, if you take the business model canvas, really the idea here is that you sketch out the logic of your business. How you’re creating, delivering and capturing the value.
So what many users of the business model canvas get wrong is they focus on the individual building blocks. They say: “Oh, we’re going to look at the channel blocks, so how do we get to the marketing? We’re just going to fill out this little box called channel distribution channels.”
What you really want to do is you want to focus on all the pieces. So you want to ask yourself: for this particular segment, which channel should I be using to deliver which value proposition? And what resources do I need to have, and activities do I need to perform, for this particular value proposition?
So what you really want to do is not look at the individual pieces, but you want to look at the story. What story connects all the building blocks of your business model together?
I’ll give you a very concrete example. So when entrepreneurs come to me and they show me a business model canvas and they have five or six different revenue streams in the revenue stream block, for me it’s usually an indicator that they don’t have a real story in their business model and a real revenue stream; because they’re just filling out that box with as many revenue streams as possible, rather than having a clear value proposition that has a clear product market fit with the segment and generates scalable revenues.
So many entrepreneurs who get started and use the business model canvas don’t focus on the story of their business model. What is it that makes this business model better than what’s out there? What is it that makes this value proposition better and more convincing to the customers I want to target, than what’s out there?
You want to be able to tell the story of the components of your business model, how you’re creating value for yourself. And when we talk about the value proposition, you want to be able to tell the story of how you’re creating value for your customer.
So you have these two tools to answer two very different questions and it always focuses on the story, rather than the individual building blocks. That’s one of the main mistakes that people do – they get caught up with the individual blocks, rather than focusing on the big picture; how this all fits together, and creates a real story, that’s going to allow you to succeed in the market.
How to really understand your customers
MARK: Makes sense. Although is potentially counter-intuitive to some people approaching this for the first time, so I think it’s really good to clarify that.
Probably now going against everything you’ve said, I just want to pick out something that I saw in the Value Proposition Design. In one of the segments there, which was around detailing customer jobs and in the book you mentioned again, there is a common mistake in mixing up outcomes and jobs, and that they’re actually distinct.
Can you explain the difference?
ALEX: So one of the most important questions you want to ask yourself when you’re designing, or trying to create a value proposition for your customers, you want to ask yourself not what they need and what kind of characteristics and features they want, the most fundamental question you want to ask is: what jobs are they trying to get done in their work or in their lives? What are they trying to do? And then you need to ask yourself: how do they characterise success, or failure, of those jobs that they want to perform?
So if I’m an investment manager and I’m looking at my potential customers, or a private banker, looking at my potential customers, well I need to look at the jobs they are trying to get done.
Some customers might be looking for peace of mind when they invest in a mutual fund. But some investors have a very different job to be done, they want to play and learn from start-ups. So the job is very different.
And then, once you’ve figured out the job, you need to ask yourself: what characterises success and failure for those particular clients, with those particular jobs. And you’ll learn that maybe the investment return, for a client that wants to play and invest in start-ups, the return is not as important as the access to world-class entrepreneurs who are trying out bold new ideas.
So start asking yourself first: what are my customers, or my potential customers, what are they trying to get done? And then ask yourself: how do they measure failure? What does failure mean to them, regarding that particular job to be done? And how do they measure success?
So those two things are more about the outcomes, and how they measure outcomes, and the first part is more about what they are trying to get done: the jobs, the tasks that they are trying to get done.
They need to differentiate between those two. And the more you actually get quantitative, the more you can put numbers on how they measure failure, or how they measure success, the better.
And when you’re talking about investment vehicles, well it might be clear in terms of performance how they measure success, but, you know what, what if they’re really interested not in performance, but they’re interested in playing with, or interacting, with these entrepreneurs, what would be the quantifiable value that you could put onto that? Maybe the hours per month that they can interact with world class entrepreneurs.
Is it five minutes that they want? Is it an hour that they want? You want to look at those things. Those are the measures of success and failure of your customers that you want to understand.
How #EventProfs can use the canvas to organise better event experiences
MARK: Right. And that brings me into the next question, actually. Because you’ve talked about two different types of customers there, with two different jobs to do, and different motivators. One is about peace of mind and so they’re probably trying to avoid pain. And then the other one is interested in playing the market and seeing great new innovative ideas come to market and being a part of that, so they are interested in gains and the pleasure side of investing. So you’ve got the gains and the pains.
In the events industry, a lot of events would be characterised very much towards the gain aspect of the spectrum. People want to go to events to have a good time, to socialise, to enjoy a great experience, but it might not necessarily negatively impact their life if they didn’t. So it’s a want, rather than a need. Can you still apply the same thinking to a pleasure business? Or a business that’s very much about gains, as you can with other businesses that, I think, they’re characterised as painkillers versus supplement businesses?
ALEX: Yeah, so absolutely. And with Strategyzer we do organise certain events. We look at the job’s pains and gains of our customers very, very closely.
I’ll give you a couple of examples here, but let me reframe this for a second, first. Because if you’re an event organiser and you look at the job’s pains and gains of your customers, the first mistake you might make is that you’re only looking at job’s pains and gains related to events. The value proposition you already have in mind. But that’s taking your prospective, rather than the customer’s prospective. Because what’s the customer’s prospective? They don’t ultimately care about events and going to an event, what people really care about is not the event per se if their job to be done is to learn a new methodology.
So for example learn about the business model canvas and how to apply it.
Well what are the solutions of value propositions that they can use to satisfy that job? They can go to an event or workshop, they could go to YouTube, watch some of the videos where others talk about the business model canvas, where I talk about the business model canvas, they can hire a consultant to teach them that, to come to their office, or they can talk to peers who already use these methodologies.
So the first thing you want to really do is open up your scope and ask yourself: what are the essential job’s pains and gains, beyond your value proposition, beyond your solution? That’s the first thing you want to do, so reframe it a little bit like that.
Now to your initial question. Are we here talking about vitamins or painkillers? Well potential participants of an event go for what they want to learn, but they also avoid particular events because of some of the pains.
So if I look at most global conferences today, there’s a person speaking, or a series of keynote speakers, and a lot of people listening. That’s a pretty broken format and if you really dig deeper and talk to people, they don’t really enjoy that format a lot, and our brains actually don’t enjoy it, because our attention span is about ten minutes, and then we need to rewire in one way or another.
So maybe you want to look at some of those pains that your potential customers have when they go to an event, and work specifically on the pains.
I’ll give you an example, what we did, we created two years ago an event called the (30.00) Business Design Summit. And what we wanted was not just brilliant speakers on stage speaking, we tried to do that as well, but every speaker had to get the participants to work inside of their forty-five minute keynote; meaning they would get a tool, they would work on a specific exercise in the keynote section immediately, which would mean that this would be much more interactive, even with 250 people in the room, so a medium sized event, but we would work on one of the pains, that they don’t want to be bored. They don’t want to get bored, they don’t want to just listen. They want to do.
So I don’t think, in the event business, you’re just looking at the gains, you can easily work on the pains, because a lot of the events today are very painful, even when you have great speakers on stage.
And they all resemble each other, so I think there’s very little differentiation, because if there’s one industry that can easily be disrupted, it’s the event industry. To a certain extent, some of it has happened, if you look at TEDx, a little bit of that happening, but I think this is an industry ripe for disruption and it’s very competitive because you have more and more events, but it’s ripe for disruption and there’s great opportunities.
But you want to deeply understand job’s pains and gains, then you want to forget the existing value propositions in the market and start from scratch. And come up with: what would customers really want from an event? And start from scratch. And then obviously you have to see what is feasible, and what isn’t, in terms of business model, because, again, if resources were unlimited, we could come up with the greatest value propositions.
The art is to create unbelievably cool new value propositions, with a profitable and scalable business model.
I think there’s more opportunity out there than we actually think. If we don’t think of product innovation, but we think of value proposition and business model innovation.
How long should it take to complete the canvasses?
MARK: Right. Again, if someone that’s listening to this is inspired and they want to take a look at the canvases and get to work and they’ve got a great idea and they want to get it down on paper, is there a timeframe that it would take to fill either of these canvases out? Do some people do it in hours? And some people take months? As you said, it’s an ongoing process, but I wasn’t sure if someone listening to this would think: “Oh, it’s probably going to take me X amount of time to really create a great canvas for my idea.”
ALEX: I think the faster, the better. In your early canvases you maybe want to do that once you know the method a little bit, which is easy, because it’s pretty straightforward. We try to keep it simple and applicable, you should spend five minutes on shaping your idea.
And actually the more you learn, the more you’ve tested your ideas with customers, the more you can spend on adding more granularity.
And what often happens with people who want to build something new is – it’s the other way around. It’s the business plan syndrome where they refine the initial idea by thinking about it for weeks and detailing how it was going to look but, you know what, to quote Steve Blank: “No business plan survives first contact with customers.”
So what you really want to do is when you start, you want to keep it rough, like a designer with the first prototypes. Spend five minutes, sketch it out rapidly, but then immediately start by testing.
And the more you learn from the experiments you do, from the customers you talk to, the more you should add granularity to your idea.
But don’t start with adding granularity and refining your idea, without experimenting, because you’re just going to waste your time. If you spend a week on filling out a business model canvas, then you take your value proposition canvas, then you talk to customers, and it turns out they don’t care, you’ve just lost the week.
So what you want to do is start quickly, and we designed our tools exactly for that purpose. We designed the tools so you can prototype, but when time is there, you can also go deep.
The business model canvas, the bigger picture, the value proposition canvas is a zoom in, into more detail. It’s around how you’re creating value for your customers. The business model canvas is a zoom out, how you’re creating value for your business.
So you need to zoom in and zoom out, depending on what you’re looking at and add more or less granularity, depending on where you are in the process.
How to get the most out of your keynote speakers
MARK: Great. Very good answer. So we started, actually, naturally, talking a bit about events and how they’re designed and it’s obviously something that you have had personal experience with. You’re also a regular keynote speaker at events. Do you have any tips for other event organisers on getting the most from keynotes, like yourself?
ALEX So, Number One: I recommend to any organiser of an event to read a book called Brain Rules by John Madina. So there’s a lot of charlatanism around brain rules and so on. But John Madina’s a brain scientist and he sets up a number of rules, based on purely used scientific journals and if you look at that and look at those rules, like make things visual, that people can’t concentrate for longer than ten minutes. Something has to change so you can trigger their brains again. If you look at those brain rules, you’ll figure out a lot of opportunities to change your events, and to change what speakers do.
So in my case, the events usually don’t ask me, but I insist, that I’m not going to do a keynote, if I can’t make it interactive. Because I think it’s torture to listen to most speakers for longer than twenty minutes.
Very few, like maybe Sir Ken Robinson, that you can listen to because he is a stand-up comedian with great content, but that’s maybe one out of a thousand or ten thousand. Make it interactive.
Get your keynote speakers to do something with the audience. And when I mean interactive, it’s not ask a question and get one out of a thousand people to answer, that’s not interactive, get everybody in the room to do something, to perform an exercise, to input some data interactively; but something that works, that’s easy, but that gets everybody stimulated every couple of minutes. That’s really, really important and just follow all these brain rules to push speakers to do better work.
So when we did the Business Design Summit, we asked every speaker to make it interactive, to use a tool and get people, the participants, to work with the tool. That was a requirement that we had to these speakers.
And these were not just no-names, these were very established speakers, but they loved the idea, because they actually learned how to better interact with the audience. Because speakers are not taught how to do great talks, and even people with great ideas are not always great speakers.
So push your speakers, if you can, in one way or another, to do this kind of stuff. But don’t forget: you need a value proposition for speakers to get them to do something.
If you just ask for stuff, the well -known speakers will say: “I don’t care, just pay me.” And that’s it. But if you make it interesting to them, if you have a great value proposition, they’re going to do stuff that’s going to blow away the audience.
MARK: Fantastic. And if there’s any other speakers listening to this, or people who are maybe experts in a subject and they’ve been invited to speak publicly for the first time, it’s obviously an incredibly common thing for people to have nerves and stage fright and that kind of stuff. Do you have any tips for them on how to calm those nerves and deliver a great presentation on stage?
ALEX: Yes. A funny anecdote, if I may. I actually feared public speaking like hell. When I was at university, I couldn’t speak at a seminar in front of thirty students. I would have to throw up and it was terrible. But I forced myself, Number One, to do these talks. But then most important, I tried to find my style.
So I realised very early that if I had bullet points, I would actually get lost, because I would try to stick to the bullet points.
The moment I replaced my slides with images, I was much freer to forget maybe two bullet points but to deliver three extremely well with the right visuals behind it. So that was for me liberating, that was Number One.
Number Two, and again I can just speak from personal experience, I remember I had one really brilliant coach. I’m a bit sceptical about coaches in general, but I had two brilliant coaches and one gave me an unbelievable recommendation for speaking and she said: “Oh Alex, I think you’re actually good at interacting with others, getting others to do stuff.” So the moment she said that I actually tried to use the knowledge of the audience, more than just my knowledge.
So I integrated that, got people to interact among each other, got people to share their experiences, so I found my personal style.
I mean I love how Sir Ken Robinson speaks about creativity and how funny he is. But I’m never going to be funny, I’m Swiss, so it’s not going to happen; it’s (40.00) not my style. So I could take comedy classes, but it just wouldn’t be natural.
So I had to find my style. The last piece of what I really found in my style is that I tried to make my presentations, my slides, extremely visual, and I spend a lot of time on the design of the slides. I ban bullet points. Bullet points are a crime. They shouldn’t be there.
So what you want to do, and that’s again a brain rule, people are visual. DNA, we used to run away from lions in the Savannah, what turns out in the presentation, is the same thing. We react to visuals in a very different way to what we react to text.
So, for me, that was very important as well. So I think speakers should find their style and figure out which parts of their style really connects with the audience.
If you find a style that doesn’t excite people, then you have a problem.
But I do think everybody has some qualities that can really connect with the audience. The whole task is: find that, and differentiate yourself from all the other speakers out there.
MARK: Great advice. Fantastic. OK. So we’re coming towards the end of this podcast, but I do have a couple of other quick questions for you. So what is your favourite event….have you got one that really stands out in your mind?
ALEX: That’s hard. There are a lot of events I’d like to go to. One that I enjoyed a lot was a BIF summit from the Business Innovation Factory. I try to go there when I can, not just as a speaker, but also as a participant, and the Business of Software is one that I really enjoy, because my co-founder has a software business that’s a very great place to go and obviously I love the Lift Conference in Geneva because an old friend of mine launched that, became a great event.
Those are the three off the top of my mind that I really love and probably forgetting other ones.
I, in general, get something out of every event. It’s usually where my best ideas come from, when I listen to speakers and connected to the knowledge I have from other sources. And so I usually try and find events either with piers, or where there are different, interesting formats.
And then obviously the on-line stuff. I mean going to Ted is always inspiration. I never physically went to Ted for time reasons, but I actually love the on-line videos, so that’s a huge source of inspiration.
Great ideas to look out for in 2015
MARK: Great. That’s a great list of events.
So finally, you, I assume, will see a lot of quite cool new event ideas as a consultant, as people come to you and ask for advice on filling out the value proposition or the business model canvas, are there any companies you could give a shout out to that you think we should be looking out for in 2015?
ALEX: So I’m very excited about not just the large companies and I have the opportunity to work with, but I love looking at businesses of social entrepreneurs.
What I mean with that is people or entrepreneurs who want to build a profitable business, where the profit is not at the expense of impact, and the impact is not at the expense of profit. Because I do believe you can actually create a scalable and profitable business model that sometimes even the entrepreneur gets really wealthy, while changing the world, and that’s fine. It’s not contradictory. I think we can do both at the same time.
And within that space, one of my favourites is (you’ll laugh) it’s called Peepoople …..
MARK: (laughter) OK, I did laugh…
ALEX: … and what they’re trying to do is a couple of companies in the space, these are not charities, these are real companies, they have venture funding, they have an impact on one of the biggest issues in the world, which is the fact that over two billion people don’t have access to proper sanitation.
And they’re not just looking at a product innovation, which they have (the peepoo bag), they’re looking at the right value proposition, with the right business model to: Number One scale the business, but most importantly, Number Two, have an impact in the lives of these, or part of these, two billion people.
And what’s exciting to look at here is: if they don’t find a scalable business model, they’re not going to have an impact. They’re not going to make a dent, because the order magnitude here is huge – two billion people.
If they impact ten thousand people, that’s nice, but they’re looking at impacting millions and millions of people and they can’t do that without the right value proposition, and in particular the right business model.
So look at Peepoople and get inspired by companies that change the world, have an impact, and are profitable and create wealthy entrepreneurs.
Where can people learn more about your work on innovation and business strategy?
MARK: That’s fantastic. I will definitely check them out as well.
And then finally, if anyone does want to make a start on filling out the business model canvas or the value proposition canvas, where’s the best place that they should go to get further advice on that? What destination should people go to, to learn more?
ALEX: They should just go to strategizer.com. We have a lot of free resources there, a hundred pages of our new book Value Proposition Design are there, so you can get a lot of free stuff and look at what you’re interested in. It’s a free model.
I mean there’s a lot of opportunities to spend money with us, but there’s a lot of free stuff out there, because our mission is really to turn business practitioners into tool users. A lot of education that we have to do, or want to do, so we provide a lot out there for free.
So go there, you’ll find our free resources, you’ll find our books and you’ll find the software tools that we have. It’s a great start, and I think there’s something for everybody.
MARK: Fantastic. Thank you. And thank you on behalf of anyone that’s been listening to this for all your time and some fantastic advice.
ALEX: It was a pleasure to be part of this. Thanks for inviting me.
MARK: Alright. Take care.