In this two-part concluding video of Odyssey 3.14, I would like to talk to you about trends that we can observe in business model innovation. This is based on our observation of innovative business models all around the world. I will build on many examples that we have already discovered together through the Odyssey 3.14 approach. I will just mention them again, without giving further details. But I will also give you some new examples that we didn’t have the opportunity to develop in our fourteen directions. The first trend that I would like to talk about is platform business models, also called double-sided or multi-sided business models. As you remember, those businesses link two or several sides that attract each other, together. The most famous examples are, of course, Airbnb, Uber or its Chinese counterpart Didi and also LinkedIn and Amazon. Platform business models are not new. A shopping center or a credit card are platform business models. However, the Internet has allowed those type of business models to grow exponentially and worldwide very fast. Airbnb, for example, started in 2008 and now has more rooms than any of the major hotel chains in the world. What is interesting to notice is that platform businesses are starting to flourish in B2B businesses. For example, Klöckner is a German multi-metal distributor with over €6 billion in sales and it recently launched a platform to connect steel producers with manufacturers using steel, such as car manufacturers. B2B platform business models will definitely appear more in years to come. Some argue that one of the main roles of a platform is to act as a trusted third party. You rent a house through Airbnb because this company provides you with guarantees. Thus, the blockchain technology that offers to decentralize trust among all the members of the chain, could threaten this type of business models in the years to come. The second trend in business models is the innovative use of big data. As you know, the amount of data has risen exponentially over the past years, particularly through our extensive usage of our smart phones. The amount of data will continue to increase extensively in the years to come, for example, with the development of the Internet of things, when machines will start to talk to each other. But besides this new abundance of data, we now also have more computing power, as well as new algorithms and machine learning. Those technologies will enable more businesses to exploit those mega-data through innovative business models. The Chinese company Alibaba, for example, uses the data of its buyers to offer them a loan, based on the data that the company has collected over the years. This data can be internal to Alibaba: what the customer has bought before and at which price level, for example, but also based on data collected through other sources, such as social media. The third trend is the focus on usage. Indeed, more and more value propositions revolve around the usage, the function, rather than the ownership of a product. We have given many examples, both in B2B and in B2C. Remember, for example, Michelin Fleet Solutions, Hilti and SAFECHEM in B2B, RelayRides and Airbnb in B2C. You can also think about Spotify in the music industry. The innovation in the value proposition is to lend the product and/or ask the customer to pay a fee, rather than a fixed price, for example. This third trend is very much related to the next, which is collaborative consumption. Indeed, if you are not attached to the ownership of your product, you might as well share it with someone else to lower the cost of usage even further Here, we can think about car sharing companies like Zipcar and DriveNow or bike sharing companies like Mobike. But this also relates to the next trend: circular economy. Indeed, if companies are lending the product rather than selling it, they will remain the owners of the product and thus, get the product back at the end of its life. This means that they could recycle it and if the design is done well from the start, this will also allow the company to recycle or even upcycle the product. While doing this, the company switches from "cradle to grave" to "cradle to cradle" that is, from linear to circular economy. The typical example here is Desso, the Dutch carpet tiles company that we discussed in one of the videos. Another trend is finding the product that is just good enough to meet the exact needs of the customer. This is sometimes called "frugal innovation": the minimal innovation to meet the exact needs of the customer. Let me give you a new example here. At least 1 million babies die in the world on the day they're born because of hypothermia. They are cold. This obviously mostly takes place in the developing world since in developed countries, the baby is put in an incubator for a couple of hours or days and survives happily. The problem, of course, is that in poorer countries, local hospitals cannot afford an incubator. The solution could be to design a very cheap, low-cost incubator. But even with a very low-cost incubator, when we really consider the problem, we realize that babies don’t need incubators. They need to be warm. And think about what our grandmothers used to do when they were cold. They would use a hot water bottle. And this is exactly what two MIT students have developed to find a frugal, easy to implement, good enough product to fight against baby mortality. You wrap the baby into it and you carry it close to you. Instead of several thousand dollars for the cheapest incubator, this solution is called Embrace, costs only about $30 and can be reused almost infinitely. So, good enough products are another strong trend in business model innovation. Start with a problem and try to find a no-frills, frugal answer. We’ve seen other examples throughout our fourteen directions, such as Castalie water, the purified water fountain, for example. The idea here is to focus on what is sometimes called "the job to be done". What is the real need of the customer? In the water fountain example, I don’t need the good taste of Evian, I just don’t want the bad taste of tap water. The job to be made here is to provide me with tasteless water. I have just presented to you the first four trends. Please join me in the following video to watch the next four trends.
