In a recent episode of The World’s Greatest Business Thinkers Podcast, Alex Osterwalder, co-creator of the Business Model Canvas and founder of Strategizer, shared his insights on business models, innovation, and what it takes to build an invincible company. Here are the key takeaways from the conversation with Nick Hague.
The Birth of the Business Model Canvas
Alex Osterwalder is best known for creating the Business Model Canvas, a visual tool that has revolutionized how businesses plan and innovate. Unlike traditional business plans, which often rely on unproven assumptions, the Business Model Canvas focuses on nine building blocks that help companies articulate how they create, deliver, and capture value.
The canvas was born out of Alex’s PhD dissertation, where he and his co-author, Yves Pigneur, rigorously tested their ideas with real business people. They synthesized existing literature and designed a practical, user-friendly tool that resonated with entrepreneurs and executives alike. As Alex explains, “We weren’t the first to write about business models, but we were the most rigorous.”
The timing was perfect. In the late 2000s, businesses were looking for a more agile way to sketch out their strategies, and the Business Model Canvas filled that gap. Today, it’s used by companies like IBM, Ericsson, and Deloitte, as well as startups worldwide.
Why Business Plans Are Outdated
Traditional business plans often fail because they’re based on untested assumptions and projections. As Alex puts it, “It seems wrong to take a fantasy and turn it into a 30-40 page document and then say, ‘I’m going to execute that.’” In contrast, the Business Model Canvas is grounded in reality. It’s a flexible, one-page blueprint that helps companies align around a clear, coherent story.
For startups and innovators, business plans are particularly ill-suited. As Alex explains, “When you’re inventing something new, there’s huge uncertainty. You’re better off sketching something out quickly and being willing to change based on what you learn by testing.” This approach, known as the explore-exploit continuum, emphasizes rapid iteration and adaptation.
What Innovation Really Means
Innovation isn’t just about technology or groundbreaking ideas. According to Alex, “Innovation is about creating value for customers, your business, society, or your employees—and doing it in new ways.” He distinguishes between technology innovation (R&D) and business innovation (business R&D), arguing that both are essential for creating value.
One of Alex’s favourite examples of innovation is the Nintendo Wii. Despite being technologically inferior to competitors like Sony PlayStation and Xbox, the Wii succeeded by targeting a new segment: casual gamers. Its motion control system and family-friendly games created a new value proposition, proving that innovation isn’t always about high-tech solutions. “Innovation is about creating value in new ways with whatever you have,” Alex says.
The Qualities of an Invincible Company
In his book The Invincible Company, Alex explores what it takes for businesses to stay ahead in a rapidly changing world. Invincible companies, he explains, don’t believe they’re invincible—they’re paranoid about failure. Take Amazon under Jeff Bezos, who famously said, “We’re going to die,” and used that fear to drive constant reinvention.
Invincible companies also understand the power of business model innovation. While product and technology innovation are important, business models often provide a stronger competitive advantage. For example, Apple’s ecosystem around the iPhone creates a moat that’s hard for competitors to breach.
Finally, invincible companies transcend industry boundaries. Companies like Amazon, Apple, and Meta no longer fit neatly into traditional categories. They’re constantly exploring new markets and business models, from eyewear to entertainment.
Examples of Business Model Innovation
Alex shared two examples of companies that have successfully reinvented themselves through business model innovation:
Bosch: Over three years, Bosch launched 300 innovation projects, investing €120K in each. They built an innovation funnel, constantly killing projects that didn’t show traction. This rigorous approach allowed them to focus on the best ideas and teams.
Laurastar: A Swiss company that started with handheld steamers for clothes. They realized their product could also disinfect furniture, toys, and hotel rooms. After testing a dozen ideas, they focused on selling directly to consumers with the value proposition of disinfecting homes.
“Business model innovation doesn’t mean you come up with the next Airbnb,” Alex explains. “It means finding the right business model that creates new value in your context and helps you reinvent your company.”
The Future of Strategizer
Alex’s company, Strategizer, is undergoing its own transformation. Originally a consultancy, it’s now pivoting to a platform-based business with recurring revenue. Strategizer’s tools and frameworks, like the Business Model Canvas and Value Proposition Canvas, are being packaged into program licenses that companies can use independently.
This shift reflects Alex’s belief that consulting is a crappy business model. “Selling time is unpredictable,” he says. By transitioning to a scalable platform, Strategizer aims to democratize innovation and make its tools accessible to businesses of all sizes.
Key Takeaways
Business Model Canvas: A practical, flexible tool for articulating how a company creates, delivers, and captures value.
Innovation: Not just about technology—it’s about creating value in new ways, whether through products, services, or business models.
Invincible Companies: Constantly reinvent themselves, focus on business model innovation, and transcend industry boundaries.
Experimentation: Failure is part of the process. Companies need to experiment, learn, and adapt to stay ahead.
As Alex puts it, “The hard part about innovation and entrepreneurship isn’t the idea. It’s turning an idea or vision into a value proposition that customers care about and a business model that can scale.”
Watch the video on: https://www.youtube.com/watch?v=GbVtZY4gRuw&t=20s
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