Posts Tagged ‘Modeling your business’

Flexible Focus #54: Modeling Your Business

by William Reed on May 19, 2011

In search of a Toolbox

We have looked at the power of the 2×2 Matrix, as well as how to gain additional degrees of freedom with the 3×3 Matrix of the Mandala Chart. Any kind of Matrix can be useful, because it helps you compare variables that interact with each other, and it puts everything on a single screen. This gives you the vital element of perspective, something that is easy to lose when you are caught up in the fray. In business, this can spell the difference between success and failure.

Now there is another kind of Matrix which enables you to map out and test proven business model concepts, not only by seeing the parts in relation to the whole, but also with the ability to run interactive simulations and projections with numbers. Introducing The Business Model Toolbox for iPad.

Even if you don’t have an iPad, the Business Model Generation book can guide you through the process, with beautiful illustrations and real world examples of successful business models in action. This book is a remarkable innovation in itself, having been co-authored by 470 strategy practitioners from 45 countries. Ordinarily it would be nearly impossible to integrate that much diversity into a single package, but this book is held together by a highly integrated visual design, and the fact that the contributors speak from real world experience.

Their methodology is practiced by companies such as Ericsson, 3M, and Deloitte, and the book is available in 18 languages. It is positioned as a handbook for visionaries, game changers and challengers, and the communication savvy of the core team behind the project is self-evident in both the book and the website navigation.

Telling Your Story with Prescience

Guy Kawasaki is the founder and managing director of Garage Technology Ventures, a seed-stage and early-stage venture capital fund, and a best selling author whose successful books include The Art of the Start, and Enchantment: the Art of Changing Hearts, Minds, and Actions. I interviewed Guy Kawasaki on video for the iPad Creators Club, and in that interview asked Guy, of all of the factors that go into evaluating a business model as a venture capitalist, which factor carried the greatest weight. He said that it was 90% in the story behind the business model. He added that we all know that the numbers are made up, but you cannot fake the level of passion, belief, and commitment that is either evident or missing in the story itself.

Nevertheless, the power of story in business is more than just the power of narration or stage presence. The story must be delivered with the skills of an actor, but it must be grounded in the perspective of the strategist, and this is where Business Model Generation can make the difference.

Think of it as the power to see there before you can be there. Prescience is the knowledge of things before they exist or happen, foreknowledge, foresight. Surely it must seem as magic to those who lack this ability, and often it is the experts, blinded by their own knowledge, who have the least prescience! This is laughably evident in just reading a few of the bad predictions by the leading experts of their day, in nearly every field that has been touched by technology. And what field has not been radically altered by technology?

If the numbers are fabricated, and the experts totally off the mark, then how can we develop some degree of prescience? How can we navigate through this unpredictable world, without falling for superstitious fallacies, or succumbing to the hypnotic mantras of the latest guru?

As a reader of this column, you know by now that reality is not fixed as it appears to be, and that with flexible focus, you not only can see more, but you can actually create more. It is ancient wisdom that comes back to remind us that we are co-creators of our own reality, that the sky is not empty.

Nevertheless, to help others see the dimensions and qualities of our vision, indeed to be able to perceive these things ourselves, we need the help of tools which help us to make the invisible visible, and the impossible possible.

Vision is not enough. We need resources and collaborative support to make things happen, and that will not happen without prescience and a powerful story behind it.

Knowing that you don’t Know

One reason why the experts are so often lacking in prescience is that they think that they know. The beginning of wisdom is knowing that you don’t know, having a beginner’s mind. In the classic book of informal talks on Zen Meditation and Practice, Zen Mind, Beginner’s Mind, Zen Master Shunryu Suzuki says, “In the beginner’s mind there are many possibilities. In the expert’s mind there are few.”

One of Socrates’ most famous sayings was, “I only know that I know nothing.” This is the beginning of knowledge, because it drives the spirit of inquiry, the quest for knowledge that is behind the question. The Matrix is the flexible container that begs to be filled, the toolbox that supports our vision.