Brigadoon Weekend
May 22, 2021
Q: What makes a good business model?
A: Narration + numbers.
“Who is the customer? What does the customer value?” -- Peter Drucker
A good business model begins with an instinct into human motivations, fears, emotions, challenges, and desires that flows into a rich stream of profits.
Business models at their heart are stories that explain how the enterprise works and makes a profit.
When business models fail, they fail the narrative test (story) and the numbers test (profits + loss don’t add up).
Management consultant and writer Joan Magretta explains business models ask the fundamental questions: How do we make money in this business? What is the underlying economic logic that explains how we can deliver value to a customer at an appropriate cost?
Think of a business model like the scientific method - you start with an idea for a consumer need, you then test this need, and iterate as necessary.
Plus, business models serve as an exceptional planning tool - a business model focuses attention on how the elements of the enterprise will work together to secure profits.
Business models often fail because they are built on feeble assumptions about human motivations, fears, emotions, challenges, and desires. Often business models are solutions in search of a problem.
Business models are not the same as a strategy.
Business models describe a system of how the pieces work together, whereas strategy describes how you will do better than your rivals to capture and secure customers.
Sooner or later, if you are good in your venture and you have discovered a human need that can be executed profitably, you will foster competition. Dealing with this competition is how you deploy your strategy.
Executing the same business model with no strategy to differentiate yourself in terms of what customers and markets you serve will lead to failure.
Failure not because of a business model, failure because you are trying to be all things to all people - there is no difference in experience, engagement, or effect between your company and the other company.
Being all things to all people has no story, no patina, no folklore.
A proper business model tells a good story and can get customers aligned around the same values and culture your company is bringing into existence.
A good story is easy to remember and is easy to repeat.
A good business model is easy to remember and easy to repeat.
A good business model is a narration that captures the numbers necessary to serve customers and remain in existence for the long-term.
WHAT BRIGADOON IS WATCHING THIS WEEKEND
CEO + corporate expectations: Good data here.
Plus relevant to anyone having C-suite conversations on the expectations from various stakeholders of their leaders and institutions to address civic and political issues.
According to this year's spring update to the Edelman Trust Barometer, mistrust is continuing to grow in a world still very much in the grips of the COVID-19 pandemic.
The decline of trust across all institutions persists, according to the online survey of more than 16,800 people in 14 markets around the world from April 30 to May 11. The index also referenced data from earlier Edelman surveys and, in some cases, made comparisons among subsets of data from the overall research.
Government trust surged 11 points to an all-time high of 65 percent, making it the most trusted institution for the first time in our 20 years of study.
Plus, people expect corporations and CEOs to continue addressing the most pressing social and political issues even after the pandemic is over.
Other highlights:
+ Businesses are now the most trusted institution in the world, a role they assumed mid-way through the pandemic once people realized governments were ill-equipped to develop and roll out vaccines alone.
+ Globally, the majority (60%) of people say their country will not be able to overcome its challenges without business' involvement.
+ Most people (77%) said their employer had become their most trusted institution, which has put much more pressure on CEOs to prioritize societal and political issues in addition to business outcomes.
+ Roughly 80% of employees, on average, expect their company to act on issues such as vaccine hesitancy, climate change, automation, misinformation, and racism.
You can access the updated analysis from Edelman here.
The University of California will no longer consider SAT and ACT scores: NYT reports the university system has reached a settlement with students to scrap even optional testing from admissions and scholarship decisions. The change comes as part of a settlement brought on by a group of high school students and nonprofit groups who claimed the standardized tests put minority and low-income students at a disadvantage.
Some 225,000 undergraduate students attend University of California schools. The settlement makes the system the largest and best-known American institution of higher education to distance itself from using the two major standardized tests.
Look for less acceptance based on standardization.
People watching is the magic ingredient for restaurants: As New York City allows full-scale indoor dining, it's clear that the magic ingredient was the unexpected thrill of seeing other people.
Pete Wells writes in the NYT, so many modern restaurant interiors are designed around their bars that we take their contribution for granted. All those shakers clattering and bar stools swiveling and bartenders reaching for a bottle or a rag; the customers sitting down and getting up again: Bars are perpetual motion machines that help turn the larger, slower gears in the dining room.
What people-watching tactics are you adding to your marketing and communications?
How EVs could transform the streets of Africa: WSJ reports proponents of electric vehicles and renewable energy see motorcycles as the fastest way to promote inexpensive, clean-energy transportation in Africa, where roads are often traffic-clogged and potholed.
Bikes and utility automobiles of every type are the fastest-growing sectors of the African automotive market. According to the United Nations Atmosphere Program, gross sales of electrical and conventional two- and three-wheelers in Africa will expand 50% by 2050.
Micro-mobility continues to expand.
Pep Guardiola: Football's restless innovator: Simon Kuper writes, sure sometimes Guardiola's experiments fail, but if you're not experimenting, you're not evolving. And his experiments have led to success everywhere he has coached. The coach has now won nine league titles in three different countries.
Next weekend he will compete for the 2021 UEFA Champions League title against Premier League foe Chelsea. A win over Chelsea will secure the third major trophy for his team this season and cap one of his most spectacular seasons of coaching.
But why does he keep evolving even with all this success? His worldview requires it.
"My children will be better than I am. And the coaches of the future will undoubtedly surpass me."
Watch Pep Guardiola in action with Amazon's All or Nothing: Manchester City episodic sports documentary. Watch the trailer here.
BRIGADOON EVENTS
Media Trends + Tendencies | How To Workshop
May 25, 2021
Thought Leader Communications How To Workshop
June 8, 2021
Speak Globalization | How To Workshop
June 15, 2021
Adventures with Fiat Pandas + Autogrills + Negronis | Brigadoon Monthly Call
Matt Hranek | Founder + Editor @ Wm Brown Magazine
June 16, 2021
More details and passes - click here.
Thanks for supporting Brigadoon. See you next week.
-Marc
Curation + commentary by Marc A. Ross | Founder + Chief Curator @ Brigadoon
Brigadoon is always powerpoint free and conversation-driven for better insights and connections.
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