A Student of the Business Model Generation

I am a new student of the Business Model Generation. I’m working to understand and apply the tools and techniques outlined by key influencers such as Steve Blank and Alexander Osterwalder. The Business Model Generation book outlines the difference between a ‘Design Attitude’ and a ‘Decision Attitude’, and how crucial the difference is to the success of business model generation. This is my reflection on that core concept.

‘Design Attitude’ is a critical yet counter-intuitive concept for successful business model generation. Discovering business model innovation in a process-oriented fashion is an ambiguous and uncertain activity – this is a foundational ideal of Design Attitude. You will invest significant time, and will throw away many ideas — this is a given. Slow and ambiguous progress with ‘throw-away’ work often feels counter-productive (‘We’ve spent all this time and we’re not getting anywhere!!!’). This uncomfortable feeling is actually progress in a positive direction. However, the process of business model generation and the concept of Design Attitude is counter-intuitive – it does not feel like a process at all to many process-oriented people.

The book offers a contrast to Design Attitude, and calls it ‘Decision Attitude’. Decision Attitude is a framework that is far more common for making operational business decisions, yet can be counter-productive for business model generation. Decision attitude ‘assumes that it is easy to come up with alternatives but difficult to choose between them.’, whereas Design attitude ‘assumes that it is difficult to design an outstanding alternative, but once you have, the decision about which alternative to select becomes trivial.’

Lacking diligence when designing business model alternatives (by using a Decision attitude instead of a Design attitude) is an easy misstep to take. To a process-oriented person, having easily measurable tasks and objectives feels natural (e.g. I want to have things to ‘check off my list’). If I’m an Engineer, it’s far easier to make up some requirements and then build towards those requirements. If I’m a Marketer, it’s far easier to imagine my customers and then build materials geared towards those customers. It’s a paradox - These activities feel like progress — when you build a thing, you feel like you’ve accomplished something. The ‘accomplishment’ feels good, and you want to do more of it. However, lacking diligence up front (in a process that paradoxically feels ambiguous) makes these accomplishments worth little in terms of $$$ (they can have negative worth due to the amount of wasted time). Unfortunately, the easiest way to feel accomplishment is by glossing over the diligence required in business model generation — but the high cannot last forever.

By glossing over designing outstanding alternatives, you get instant gratification — you can make a thing — the wheels feel like they are turning. However, the wheels are usually just spinning. Eventually, someone must buy your thing. People don’t buy things because you made them, they buy things because those things provide value above and beyond what it cost them to acquire it. Your business’ ultimate measuring stick is whether or not someone will pay you more for that thing than it cost you to build it. I don’t mean someone in a literal sense either (‘many someones’ is more accurate if you want to build a business). If someone will not pay you for what you’ve built because it doesn’t provide value to them, then nothing else matters. If answering that specific question (Who will buy and why?) is so fundamental to a business’ success, then why not try to answer that question at the beginning of the process?

The paragraph above describes the Value Proposition section from the Business Model Canvas. It answers the question ‘What value do we deliver to the customer?’. The Value Proposition is just one of the 9 Business Model Canvas sections. It is a framework to help guide you through business model generation. Through the process, the questions you must answer will be tough and the answers will be ambiguous. You will throw work away and it will feel counter-productive. You will discover that some (if not most) of your ideas will not work like you planned, and some activities will take a lot longer than expected. Sometimes, it will feel like everything sucks and you’re making no progress. But you know what will suck more? Building something without asking the tough questions, and having no one there to buy it.

This post represents me committing to designing outstanding alternatives, and to investing the necessary time and energy exploring them. It may feel weird, it may be messy, but I’m convinced this is the right thing to do. Are you with me?