UNLEASHING THE POWER OF BUSINESS MODEL INNOVATION
Dunstan Low’s story in a recent Evening Standard article intrigued me – see http://www.standard.co.uk/news/uk/hardup-dad-sells-his-luxury-sixbed-mansion-in-a-raffle-for-2-a-ticket-a3458366.html
The 37-year-old father bought a six-bedroom house in 2011 for £435,000 and was forced to put it on the market several years later after falling on hard times. He struggled to find a buyer and was forced to reduce the price.
Out of frustration with the selling process and lack of success, Dunstan decided to take matters in his own hands. He innovated in the business model by switching to selling raffle tickets for £2 each instead. Dunstan is hoping to sell 500,000 tickets by 1st August 2017, resulting in an effective £1m sale value if he can pull it off, giving him a substantial uplift from his original asking price.
In my view this simple example highlights one of many potential benefits that new, innovative business model can bring: most importantly greater value extraction. The concept of business model innovation is clearly not new. Everyone’s seen and applied the business model canvas and been part of debates about Amazon’s next innovation and the risk of being ‘Ubered’.
It therefore surprises me again and again how underestimated und misunderstood its potential remains – amongst our FTSE100 clients but even beyond in the public and 3rd sectors where organisations have just scratched the surface. In our experience, new business models can enable far more than ‘just’ new revenue streams. If designed well they can inherently deepen customer relationships, drive scale, create competitive advantages, and enable faster time to market.
I really hope Dunstan is successful in this venture. Either way, every organisation can learn from him and benefit from innovating through new business models.
To try win Dunstan’s Country House go to: http://www.winacountryhouse.com