Note: This article is updated at The Myths of Business Model Innovation.
Business model innovation has a couple of myths.
One myth is that business model innovation takes big thinking. Another myth about business model innovation is that technology is the answer.
In the book, The Business Model Navigator, Oliver Gassman, Karolin Frankenberger, and Michaela Csik share a couple of myths that need busting so that more people can actually achieve business model innovation.
The "Think Big" Myth
Business model innovation does not need to be “big bang.” It can be incremental. Incremental changes can create more options and more opportunities for serendipity.
“'Business model innovations are always radical and new to the world.' Most people associate new business models with the giants leaps taken by Internet companies. The fact is that business model innovation, in the same way as product innovation, can be incremental. For instance, Netflix's business model innovation of mailing DVDs to customers was undoubtedly incremental and yet brought great success to the company. The Internet opened up new avenues for Netflix that allowed the company to steadily evolve into an online streaming service provider.”
The Technology Myth
It’s not technology for technology’s sake. It’s applying technology to revolutionize a business that creates the business model innovation.
“'Every business model innovation is based on a fascinating new technology that inspires new products.' The fact is that while new technologies can indeed drive new business models, they are often generic in nature. Where creativity comes in is in applying them to revolutionize a business. It is the business application and the specific use of the technology which makes the difference. Technology for technology's sake is the number one flop factor in innovation projects. The truly revolutionary act is that of uncovering the economic potential of a new technology.”
If you want to get started with business model innovation, don’t just go for the home run.