I love business models. I love simplifying problems, in order to solve them. I love structure. And so I find business models fascinating. I still have somewhere a bunch of aged photocopied sheets with various business models which fascinated me in my time as a Master’s student. If like me, you love business models, and believe that they are as solid as say scientific models, you are in for a bit of shock.
Business models no longer last.
In this fascinating post, the author is looking at some of the most famous business models of the 20th century and arguing that most of them no longer apply. It’s an eye opening, refreshing, eureka moment read. My favourite quotes are below:
…technology is not only changing how we run our operations, but how we need to think about our enterprises. Speed now trumps intelligence. We need to break free of old assumptions and adapt to a new business environment in which everything is connected, information is cheap and resources are not owned, but accessed.
Today, extensive strategic planning has become untenable. By the time you gather information, check your numbers, analyze the situation, make the plan, revise the plan and build a consensus, the facts on the ground have already rendered the plan useless. Success is becoming more a matter of time and place than of vision or insight.
So it’s crucial that we move from strategic planning to Bayesian strategy, where we’re not trying to “get it right” as much as we are striving to become less wrong over time. This will entail creating new learning organizationsthat are able to manage complexity through combining human driven ambitions with automated market intelligence.
Most of all, strategy is becoming less about assets and capabilities and more about connections and access. It’s not so important anymore what you have—or even what you know—but how you can forge networks of purpose which can adapt in real time.
If you were working on the sustainable competitive advantage or analyzing the industry to understand what to do next, drop it. Be lean and fail fast is the new name of the game.