Risk Driven Business Model –

ideas for the future

Serguei Netessine

The Timken Chaired Professor of Global Technology and

Innovation, INSEAD

Over a long period of time, the increase in

the economic well-being in the world can

come only from innovation.

Many amazing technological

innovations will define the 20

upcoming years...

WHICH TECHNOLOGY WOULD YOU BET ON?

You need money, you need talent, you

need to be lucky…

... Is technological innovation the only

way to prosperity? Can we innovate

differently?

Innovations Hiding in Plain Sight

MORE EXAMPLES ON HTTP://WWW.DEFINEYOURCOMPANY.COM

A Different Approach to Innovation Existing Products/Technology

Superior Business Models To Provision Products or Services to Markets

Existing Market Needs

Business Model Innovation

SUMMARY: Differences in innovation

approaches

Choose for yourself!

Business Model Innovation Product and Technology Innovation

Transferable between industries Industry-specific

Possibility to describe/learn the method

Depends on specific individuals/teams

Sustainable/hard to copy Many imitators

Minimal R&D expenditures Large R&D expenditures

Apple vs. Xiaomi

• Huge R&D budget • Complete secrecy • Infrequent product releases • Minimal user feedback • Many middlemen • Huge production quantity

Steve Jobs and Product/Technology Innovation

• Minimal expenditures on innovation • Constant feature updates (every

Friday) • Ability to configure OS by user • Direct to consumer, online only • Small batch to test the market • Users invent new features, translate OS

Lei Jun and Business Model Innovation

The Biggest Innovator of them all

• Platforms, Asia-style!

• Combination of different

business models for

different segments of the

market

• Matching buyers with

suppliers and taking risk

out of transactions

Redmart.com changes how groceries

are purchased in Singapore

From humble beginnings to the largest

Internet grocery retailer in Singapore

Where are they now?

• Up to 1,000 deliveries per day

• Close to 10,000 SKUs available, launched Fresh

Grocery with 400 SKUs

• Close to 300 employees

• 40% brand awareness in Singapore

• Innovation: click-to-collect locations, 3rd party

advertising platform, marketplace + delivery and

fulfillment by RedMart

• 235% revenue growth, year-over-year!

20,000 6.3x1010 77,000 250,000

Migraine Buddy, 1st Global Virtual Study of Migraine

P A T I E N T S B Y T E S D A T A E V E N T S N I G H T S

A comprehensive approach to objectively and efficiently analyze medical outcomes

How LookBooker works for Consumers

2. SELECT From list of salons with available

appointments that meet your search criteria

1. SEARCH For an appointment by service, location/salon, and date on your

web or mobile device

3. CONFIRM Enter your details and

confirm your appointment instantly

Consumer Value Proposition 24/7 booking convenience

Access from any web or mobile device

Availabilities of multiple salons in one place

Find new salons

No more phoning around

Access reliable salons reviews

Automated appointment reminders

Free to use

How LookBooker works for Salons

23

Salon Value Proposition Bookings can be taken 24/7 including after hours

We help fill empty appointment

slots with new clients

We help create an online presence and profile – showcasing salons with reviews, images and editorial content

Our calendar widget is easy to use and allows salons to update availabilities in real time We partner with salons to capture

valuable customer feedback

We ensure that less staff time is spent on the phone and more on delivering a great in salon experience

We reduce the rate of no-shows and cancellations through our system of automated reminders

5/14/2015 Private and Confidential 24

Profitable restaurants. Happy Customers

TabSquare offers a portfolio of customizable front

end solutions for restaurant industry

Leading provider of restaurant solutions in

Singapore - Trusted by over 200+ locations

THE MOST CONVENIENT WAY

TO GET CUSTOM MENSWEAR

EDIT SUITS CO. IS ON THE MISSION TO MAKE CUSTOM MENSWEAR CONVENIENTLY ACCESSIBLE, WORLDWIDE

CONVENIENT

AFFORDABLE

• HOME & OFFICE VISITS

• ONLINE RE-PURCHASES

• HUNDREDS OF FABRICS

• DOZENS OF OPTIONS

• MADE-TO-MEASURE

• SHIRTS: USD 90-130

• SUITS: USD 600-900

WIDE SELECTION

EDIT SUITS CO. BRINGS A PROVEN BUSINESS MODEL TO NEW MARKETS

CENTRALIZED SUPPLY CHAIN & SYSTEMS

LOCAL SALES FORCES

SHIRTS SUITS CHINOS

PRICING (EUROPE)

• SHIRTS: USD 90-150

• SUITS: USD 600-900

POSITIONING

• HUGO BOSS, BUT MADE-TO-MEASURE;

• HIGH-END, MODERN INTERPRETATIONS OF CLASSICS

OPERATIONS FOR GLOBAL GROWTH ATTRACTIVE PRODUCT RANGE

• DIRECT SALES

• ONLINE MARKETING

• CORPORATE COLLABORATIONS

Each year we have in class:

• >500 MBA participants

• >200 EMBA participants

• >2000 Executive Education Participants

2000+ Opportunities identified by individuals

~ 200 Elevator Pitches

~100 Business Concepts Plans of Action

DARWINATOR

OPPORTUNITY SELECTION WORKSHOP

BUSINESS MODELS MULTI-VOTE,

PREDICTION MARKETS

Independent Projects Exit

IDEA GENERATION

DATA COLLECTION, EXPERIMENTATION

Identifying New Business Opportunities in class

BUSINESS PROTOTYPES

~50 Companies launched

A Superior Way to Innovate: Business Model Innovation

For more Information:

“How to build risk into your business model”, Girotra and Netessine, Harvard Business Review, May 2011.

“Four Paths to Business Model Innovation”, Girotra and Netessine, Harvard Business Review, July 2014.

http://www.defineyourcompany.com