More on this book
Community
Kindle Notes & Highlights
Car dealers have evolved and today resemble banks selling financial services much more than they do auto retailers.
U.S. auto dealers.
to Buffett, that wasn’t the point.
spotted an opportunity
all based around variations of decoupling.
Zipcar,
Turo (formerly RelayRides)
This group of car-sharing disruptors has broken the links between purchasing and driving a car, as well as those between driving and maintaining the car.
A subsequent generation of auto disruptors—ride-hailing businesses including Uber, Lyft, and Curb (Boston Taxi’s response to ride-hailing)—took decoupling further, severing the links between driving a car and traveling in one.
The decoupled solutions of firms such as Uber and Lyft made economic sense for consumers looking to make short trips. For longer trips, French startup BlaBlaCar
customers were again in the position of trading off convenience for cost.
It soon became clear to me that the initial success of these companies didn’t hinge on new and innovative technologies, but rather on the power of their business model innovations.
These innovations represented the real engine of disruption.
Trov
seven-step value chain.
Millennials are looking for easier and more convenient solutions, and Trov’s model is one way to create value for them.
Trov, in essence, is the insurance agent of the future, offering insurance without a year-long commitment and serving you twenty-four hours a day, instantly.
But while technology plays a role in Trov’s success, it doesn’t play the lead role.
Standard technology enables Trov to deliver services to customers. The new business model built around decoupling is what really allows Trov to stand out in a saturated market.
By some accounts, on average 69 to 80 percent of online shoppers abandon their basket before completing a purchase.
Enter Klarna, a Swedish online payments startup
Klarna thus decouples the act of buying from the act of paying, particularly when it comes to inputting credit card information.
Like Trov, however, Klarna didn’t achieve its success because of breakthrough technology.
Klarna’s decisive advantage owed to its business model, one that nobody in its industry had thought of before, and one that at its core involved decoupling.
Among businesses in which digital technology plays a significant role in value creation and capture, many are actually not technology companies, in the sense that they did not develop new and innovative technologies core to their business model (think of Disney, a company that I have visited to present my research).
“users” of technology
Companies such as Apple, Tesla, and some divisions of Amazon and Alphabet are technology innovators, but these represent the exception in the digital economy, not the rule.
business model innovation.
A novel way of creating and capturing value comprises the essence of the competitive advantage for these startups, enabling them to access capital and acquire customers.
we likewise find that technological innovation was not the primary driver that enabled players such as Ryanair, Costco, or car dealers to disrupt their markets. Rather, all of these firms built their success on the back of important change...
This highlight has been truncated due to consecutive passage length restrictions.
Business model in...
This highlight has been truncated due to consecutive passage length restrictions.
Technology, as Jim Collins put it more than a decade and a half ago in his bestselling book Good to Great, “is an accelerator, nev...
This highlight has been truncated due to consecutive passage length restrictions.
technology “is not by itself the primary source of greatness or decline.”
Teece
These failures owed in part to the lack of an appropriate business model that would drive these incumbents’ businesses forward.
“Technology alone does not disrupt markets, it rarely does.”48
That’s where the real profit now resides.
Understanding how business model innovation drives markets can empower incumbents like never before.
To compete in the digital age, it turns out that you don’t have to gain significantly more in-depth technical expertise than you already have. Rather, you must go back to the basics and reflect on how businesses make money—and on how your business might make new money.
Likewise, don’t let an excessive focus on your products prevent you from paying attention to your business. Many executives at incumbent businesses, wedded to their business models, react to disruption by blaming their products.
The truth is that the upstart’s lemonade tastes the same as yours, or maybe even worse. It’s the new business model that is stealing your customers, not the product.
But that’s the rare exception.
Allan Afuah
most profitable business model innovations have little to do with the underlying product. Profiting from a technology or product innovation stil...
This highlight has been truncated due to consecutive passage length restrictions.
After all, if you don’t focus on new waves of business model innovation, and decoupling in particular, others will. Your first task should be to understand the component(s) of your business model that is (are) not working.
In assessing your business model, it’s vital that you get to the core of the phenomenon: the customer’s changing needs and wants.
At the heart of Airbnb’s allure was decoupling. From the customer’s perspective, Airbnb broke apart the act of using real estate from owning it.
With a few clicks of a mouse,
meteoric rise,
adjoining rooms.
