Disruption is called a silent killer in the book. Future changes remain difficult for many companies to see and predict. The idea behind a disruptive business model is that entrepreneurs make the value they create for the customer so unique that they gain a lasting competitive advantage. As a result, they themselves are less susceptible to disruption. The book contains a business model disruption checklist that you can use to determine whether your business model is disruption-resistant. It concerns seven questions:
To what extent do switching costs prevent your customers from switching? The higher these are, the greater the chance that your customers will
How scalable is your current business model? If you can scale easily, you are less susceptible to disruption.
Does your business model generate recurring revenue? The more recurring revenue you have, the stronger you are compared to new entrants. Think of a subscription model like Dollar Shave Club .
Do you earn before you spend? Spending money before it comes in carries risks.
How much of your work can be done by others? This refers to review websites, for example, where value is created by the users.
Does your business model provide built-in protection from competitors? This is a variation on the first question: an exit barrier provides protection. How hard is it to do your job without products from Google and Microsoft?
Is your business model based on a disruptive cost structure? Outsource as much of your non-scalable costs as possible.
Step 2: Determine your innovation ambition before developing your ideas further
Innovation in the context of this book is about making people's lives easier with existing and new technologies. Harrie Vollaard , head of Fintech and Innovation at Rabobank says:
Innovation is often seen as earth- canada mobile number list shattering and groundbreaking innovations. But the basis is simply a kind of reflection on your work: why am I actually developing this? What is it for? And above all: does it actually contribute to the needs of your customer?
The Innovation Ambition Matrix identifies three different levels of ambition for innovation:
Improving existing products. Here you improve the existing process, which is familiar because you know the product, the market and the target group well.
New products in existing markets or existing products in new markets. Here you change certain elements of your current business model.
Revolution: completely new products for markets that do not yet exist. You develop a new need in a new market with new products and skills and unknown rules of the market. This option is not cheap, you need time and knowledge for this.
Your personal ambition, together with your competitive position, the life cycle of your company, the extent to which your industry is digitalized, your financial strength and your team, determines which level of ambition you should aim for.