creating radical business innovation in the connected ... · creating radical business innovation...

David ReynoldsResearch Associate/PhD Stuent, IIPSI, WMG

Social Media Manager, DE NEMODE Network+

Creating Radical BusinessInnovation in the ConnectedDigital Economy

[email protected]

@nemode_netplus

@sswmg

www.linkedin.com/pub/david-reynolds/11/4a0/71

www.warwick.ac.uk/go/sswmg

www.nemode.ac.uk

What is value? A brief history lesson

3 May, 2013 2

Value was exchange (what I got for what I gave)“That was good value for money!”

But it wasn’t exchange that made us happy. It wasexperiencing what we bought that gave us theoutcomes we wanted

We buy because of the service of the object,even if it was an emotional ‘service’ i.e. things areservice avatars*

Mike Kuniavsky, 20103 May, 2013 3

Posession was the only way to getthe ‘service’ of an object

• Previously, the only route toservice/outcomes was through possessione.g. music CDs

• But outcomes/benefits come only in thecontext of use and experience

• If firms found a way to serve contexts,individuals may not need to posess

• Case in point: Music Streaming

3 May, 2013 4

Value created is Contextual. Resources aretherefore also Contextual.

This camera isavailable so it is

a resource incontext

Thiscamera is

not

Things become more valuable in context because theyenable resources for value creation

VALUE INCONTEXT

3 May, 2013 5

Two functionally the SAME cameras but not thesame value for the user in context. Because onecamera is less competent in context, one is a

lesser service avatar (or is just simply notaround!)

COMPETENCY OF OFFERING IN CONTEXTIS KEY TO NEW MARKETS

Why context is important

3 May, 2013 6

But to bring your digitised offering(content) into context, you need a

medium/platform (widget),connectivity, and a social space

An example of digital ‘service’ in context: apps onyour mobile

• Dictionary• Calculator• Calendar• Torchlight• Camera• And more!

I’m Batman!

The New Battleground

CONTEXT

Content

Connectivity

Social Widget

Digitised offering incontext

Who is digitising to serve usecontext next?

• Digitisation enables traditional offerings to become aresource in context, reducing time between acquiring aresource and using a resource - expanding demand

3 May, 2013

In context

Digitisation+Data is thenew oil, Context is the new

oil-field

9

Mobile phone as the medium topropose digitised offerings in context

• Why is the mobile phone one of the mostpopular device for digitised offeringstoday?

• because it is often present in MANY livedexperiences (contexts)

• It may not be the only widget servingmultiple contexts for much longer!

3 May, 2013 10

Once upon a time, our contexts wererather homogenous

• Where/when we ate meals

• Where/when we listened to music

• Where/when we exercised

3 May, 2013

• *Technology liberates us from constraints of– time, when things can be done

– place, where things can be done

– actor, who can do what

– constellation, with whom it can be done

*Reframing Business, Normann, 200111

Markets are forming at whereservice creates most wealth – incontext Digitisation allows new

offerings to beresources: available,

accessible on demand,in context

The better you are ableto serve context, thebigger your market

Competitive Dynamics

• Serving Contexts changes the natureof competition

• Land grab creates disruption, enabledby new technologies. How?

3 May, 2013 13

ContextEnjoying musicon spotify andseeing otherfriends choicesof music whilein a gym

3 May, 2013 14

BUSINESS MODEL VS ECONOMICMODEL

3 May, 2013

15

ValueCreation

Valueprop

Val

ue

cap

ture

Val

ue

cap

ture

EMI, Sony BMG

person

MUSIC

ENJOYINGMUSICMoney from access e.g.

spotifyMoney from ownership

(e.g. CD)Money from eyeballs (eg.

Google)

ECONOMIC MODEL- Where exchanges comefrom, what exchanges arethere, creating worth fromvalue creation

BUSINESS MODEL

E.G. MUSIC - CONTENT

3 May, 2013

16

ValueCreation

Valueprop

Val

ue

cap

ture

Val

ue

cap

ture

EMI, Sony BMG

person

MUSIC

ENJOYINGMUSIC

Money from accesse.g. last.fm

Money from ownershipe.g. iTunes

Money from medium(e.g. CD)

E.G. MUSIC - WIDGET

3 May, 2013 17

ValueCreation

Valueprop

Val

ue

cap

ture

Val

ue

cap

ture

Apple, MP3 player, Computer

person

WIDGET

ENJOYINGMUSIC

Money from ownership

E.G. MUSIC - CONNECTIVITY

3 May, 2013 18

ValueCreation

Valueprop

Val

ue

cap

ture

Val

ue

cap

ture

O2, Vodafone, Three, Orange

person

WIFI, 3G

ENJOYINGMUSIC

Money from access

E.G. MUSIC - SOCIAL

3 May, 2013 19

ValueCreation

Valueprop

Val

ue

cap

ture

Val

ue

cap

ture

Myspace, facebook,google+, twitter,spotify

person

Sharingplatform

ENJOYINGMUSIC

Money from eyeballs(ads)

E.G. MUSIC - GYM

3 May, 2013 20

ValueCreation

Valueprop

Val

ue

cap

ture

Val

ue

cap

ture

GYMS

person

Sport &fitnessenvironment

ENJOYINGMUSIC &SPORT

Money from access

Industries propose value incontext

3 May, 2013 21

Value

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ValueCreatio

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person person

personperson

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Value captureValue capture

GYMS

perso

nAPPLE,CREATIVE(WIDGET)

SONY, EMI(CONTENT)

SKY, VIRGIN(CONNECTIVITY)FACEBOOK, MYSPACE

(SOCIAL)

Value Constellation of Music in Context

3 May, 2013 22

Value

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ValueCreatio

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GYMS

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SONY, EMI(CONTENT)


(SOCIAL)

Person enjoying musicin context

Many persons enjoyingmusic in context

Value Constellation of Music inContext

3 May, 2013 23

Valueprop

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PIE


Value Constellation of Music in Context

3 May, 2013 24

Valueprop

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(SOCIAL)

Person enjoying music incontext

PIE

• The Value constellation map shows you which industry has astake in which OTHER industry to expand their marketpenetration, driving disruption, convergence, land grab



3 May, 2013 25

Valueprop

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ture

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GYMS


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(SOCIAL)


PIE


I want to playthere becausemore content

that I control willdrive my

connectivitybusiness


3 May, 2013 26

Valueprop

Val

ue

cap

ture

Val

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cap

ture

Valueprop

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person

Valu

ep

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GYMS


SONY, EMI(CONTENT)


(SOCIAL)


PIE


I want to playthere becausewidget that I

control will securemy connectivity

business


3 May, 2013 27

Valueprop

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cap

ture

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I just want to make surethese guys can’t do it

without me

Connectivity & Digitisation

• TV was in a room

• Music was on speakers and stereo players

• Digitisation & Connectivity is changing contextsof use

• Changing contexts of use is bringing differentindustries into a context e.g. Tesco has a stake inyour car – will they pay your insurance?

• Disruption & Convergence comes fromunderstanding value constellation of the context

3 May, 2013 28

Changing Value Constellations

• With more digital connectivity, there aremore connected contexts – lateraldependencies between vertical industries –potential disruption and encroachment ofother verticals

• more constellations with different playerswill emerge, converging stuff, creatingnew ways to capture value, generatingnew business models, creating disruptions

3 May, 2013 29

So what does this have to dowith data?

• Digitisation & Data is the new oil; Contextis the new oil-field

• It’s not just about collecting data; youneed to ‘drill’ in the right place

• Looking at the value constellation of thecontext will help you to better identifywhere convergence/disruption could occurand what data can/should be collected.

3 May, 2013 30

For more information:

By Prof. Irene Ng,WMG/Cambridge

Currently available forAmazon Kindle/.pdf and can

be found at:www.valueandmarkets.com

Printed version comingDecember 2013

3 May, 2013 31

Visit www.nemode.ac.uk for News,Case Studies, Conferences, Calls forResearch and AwardsCurrent call: 2nd Dragon’s Den£10k top prize & 3 Runner up prizes

of £3kAimed at researchers in New BusinessModels (funded at 80% according to Research

Council funding regulations)

Stage 1 Competition Entry: 25th May

Watch this space! Currently working on a Business Model Ideationprocess based on the ideas discussed here. We hope to make itavailable to businesses in the West Midlands (and beyond!) in thenear future!

Thank you

3 May, 2013 32

creating radical business innovation in the connected ... · creating radical business innovation...

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