Regarding our three-day Bootcamp for Batch #4, we asked our jury members various questions. Because whether the teams make it to Phase 1 of the MAX!mize incubator program is based on a positive jury decision. In addition to Dr. Johannes Bange, Julia Thiere and Niels Sharmann, we also welcome Dr. Richard Hagl. As an expert in the innovation of business models and digital technologies such as augmented reality (AR) and virtual reality (VR), we asked him the following question. Enjoy reading his answer.
Richard, How do you recognise at first glance whether it is an innovative business model or not?
"Well, this is not a trivial question. The business model concept is complex and has many facets.
However, when I hear or read about a new idea, I ask myself the following questions.
First, how novel is the business model?
Second, how new is the business model?
Third, how complete is the presented business model?
When I think of novelty, I try to understand, whether the presented idea will provide prospective customers with novel capabilities, with the ability to do or have something “unheard of”. If “nobody has done (it like) this before”, then of course I start wondering why that is the case. If the business model already exists in a given industry, I start paying close attention to the details: time savings, cost savings, and quality improvements are usually of interest, then.
When I think of newness, I try to understand to whom or what this business model is new. For example, a well established business model from one industry may be applied successfully to another industry; or transferred from one firm to another. If this is the case, the business model is usually easier to understand. However, it tends to also be easier to copy this approach. This can often be mitigated against with specialized expertise and/or properly secured intellectual property rights, e.g. patents.
In respect to completeness, I pay attention to the core value domains of business models and their interconnections. I believe, these can be grouped in four domains: one, the value proposition (what value is a business model offering?); two, value capture and finances (how is a company funded and how does it plan to make money?); three, value creation mechanism (how does the company plan to create the promised value?); and four, the value network (what other values are being exchanged or created?) Examples in the value network are “having a good reputation” and “saving the planet”.
Lastly, interconnections: imagine each of the just described value domains as being connected to the others and impacting each other. What are the effects of these interconnections? For example, think of the element value creation mechanism. What happens to my promised value – another expression for value proposition – when I changed the way I fulfil my promise? How does this change affect my financial situation and earnings potential? What happens, to my reputation (value network) when I start
working with a new partner? And so on.
Lastly, let me mention that the greatest pitfall of business models is, that they don’t like to
change, once they are established. Really, entrepreneurs should think in terms of business
model innovation and be ready to adapt or even completely change their business model again
and again. For this, you need an open-minded team. This said, I would prefer a good team
with a bad business model over a bad team with a good business model, any time!"
About Dr Richard Hagl
Business Model Innovation Expert | Strategy Consulting
| Technology Introduction
| Business Model Innovation
| Interim Management
Motto
“Theory without practice is empty, practice without theory is blind”
(freely after German philosopher Immanuel Kant)
Experience
Dr Richard Hagl is thought leader for business model innovation (BMI) in the context of emerging technologies, such as for example the Metaverse. His mission is to safely guide companies in their efforts to leverage the novel capabilities of IT technologies. Richard has more than 20 years of professional experience. He is a native of Munich, Germany, married, and father of three children. Richard sees himself as a global citizen who has lived in Germany, the US, and Spain. He holds degrees in Electrical Engineering and Computer Science from the University of Wisconsin, USA; a Degree in Systems Engineering from the University of Applied Sciences, Munich; and earned his Doctor of Business Administration from 2014 to 2020 at the Waterford Institute of Technology in Ireland on the impact of augmented reality and virtual reality technologies on business model innovation. Richard is book author and occasional speaker. He has relevant entrepreneurial experience including founding and startups.