W h a t ’s M y B M I © 2 0 1 0 W e a r e c l o u d b e r r y . c o m

Business Model InnovationThe latest news

Mi Casa Su CasaThe Ed’s give the skinny on Partner Networks & why you need to get involved

Keeping upThe name of the game is aggregation

The Master SpeaksAlex Osterwalder parts with some knowledge

Partner NetworksAndy looks at the who and the how

The Movers and the ShakersWhat are the big players saying about the benefits of immersing yourself in networking

Reviews Other worthy publications on issuu.com

My DayDay to day from Lincoln

My BMIMeet Hamish - Switching it up in Christchurch

What’s my BMI is a preview to what is on offer at wearecloudberry.com

Our purpose is to produce tools and resources for the owners of small to medium sized enterprises across the world. This publication is free and its aim is to aggregate as much useful, unbiased and innovative information as possible and make it totally accessible to any business owner anywhere. It’s written to inform and generate debate.

Feedback

Every issue, we will feature some of the feedback that we get from readers. Drop us a line and give us your thoughts

Andy Collyer: Managing Director

Sophie Russell: Editor

Creative Director: Courtney van Beek www.cvbcreative.co.nz

Email address andy@andycollyer.com

Ph: 03 669 3777

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This month’s reflections on business model innovation

BUSINESS MODELS & INNOVATION - Alex Osterwalders Blog

– Exert from What is a business model? Alexander Osterwalder

The term business model is also closely related to innovation. As I mentioned, the business model concept is related to a whole new range of business design opportunities. There are examples of numerous business model innovations. The most obvious is innovating in the value proposition. When mobile phones appeared in the market they offered a different value proposition than fixed line phones. In the early days of the Internet popular indexes like Yahoo! helped people find information on the Web. Regarding target customer segments, low-cost airlines like EasyJet have brought flying to the masses. Dell became really successful by exploring the web as a distribution channel. Gillette has made a fortune by establishing a continuous relationship with customers based on its disposable razors. Apple resurged based on its core capacity of bringing design to computers and electronic gadgets. Cisco became famous for its capacity of configuring activities in new and innovative supply chains. Intel thrived for its capacity to get partners to build on its

processing platform. Google tapped in an innovative revenue streams by linking highly specific search results and content with text ads. Wal-Mart became dominant by its ability to slash cost throughout its business mode.

What is your business focused on? Is business generation a priority? How are you reaching potential customers? How much worth do your clients place in your business? What are your distribution channels? What resources are the most expensive? How are you building your business?

Ok so this may translate in the literal sense, to “My House is your house” which for the purpose of relating it to Partner Networking, makes a whole lot of sense. Your saying it to someone you really trust, someone that I am willing to share things with.

When it comes to Partner networking that’s what we are aiming for. Partners that promote each other. People to have on board to achieve more. We aren’t aiming to achieve sales right away, going to your next networking event and ‘selling’ your product or service. You are selling, well, you, to people that you can see trusting to play a role in building credibility with the people that you want to do business with, and that you can see will benefit your business. In time, the benefits will be reciprocal for both parties. You’re going back to the playground and building up your gang – because as you will learn later in this issue, securing the future of your business may be reliant on the relationships you build now.

So why do you need to get involved in business networking?

The requirement is that before you get too excited about the prospect of attending a networking event you need to remember that your attendance is just necessary to have a beer and canapés – nor is it to make some instant sale. You need to be focused on making connections with people that you can see benefiting the operation of your business. “The mission of Business partnering consists

in “creating, organizing, developing and enforcing operative (short-term), tactical (medium-term) and strategic (long-term) partnerships” (Droli, 2007). So we will keep these three words in mind as we work through the issue: operative, tactical and strategic.

And what exactly are the benefits for putting in that little extra effort to go and meet some new peeps?

Reduction of general costs. Business partnering can be cheaper as it reduces the amount of resources that one business has to obtain to be able to work successfully. Business partnering will also increase your competitive advantage. This is achieved through the co-operation (the co-opetitive advantage) and even better opportunities of revenues, occupation and investment in the sector of application.

Business partnering creates a no more traditionally-based solidarity or “organic”, but a rationale form of “mechanic solidarity” (Durkheim, 1893).

Partnering takes a new approach to achieving business objectives. It replaces the traditional customer-supplier model with a collaborative approach to achieving a shared objective; Essentially, the Partners work together to achieve an agreed common aim whilst each participant may still retain different reasons for achieving that common aim.

In conclusion – business networking will ensure that your business can achieve more through collaboration, which means that you and the other parties will be able to achieve so much more than if you were going it alone.

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Specifics – Why New Zealanders are not embracing aggregation

So we come from a nation of ‘she’ll be righter’s’. When push comes to shove, how do we compare to the rest of the world with our networking abilities? Or is our do-it-alone mentality holding us back, when the rest of the world have clearly seen the benefits of collaborative work.

Deborah Hill Cone from www.unlimited.co.nz has some interesting thoughts on the nature of aggregation in New Zealand “for all the talk about networking most of us are not that good at it. And Kiwis, on the whole, don’t seem to take it seriously”. Well point taken, but if we break it down to our ‘Kiwi’ level of understanding, why is this so important? “It’s the way you find out what is happening in your industry, collect vital intelligence on competitors, influence decision-makers and, most importantly, win new business”. And as Cone goes on to elaborate, well you will have no one to blame but yourself, when you have no idea that a dream client has rolled in to town or that a great business opportunity – that you have all the key skills to do – is being talked about within industry circles.So, if take a page out of Cone’s book, how we conquer the networking process is going to make all the difference.

A few examples:

Well chosen partnerships can provide benefits such as:

Sharing the risks– working in partnership allows you to offset your market exposure.

Opportunities for growth – access to your partner’s distribution networks may help you gain market share faster than if you go it alone.

Focus on your core strengths – a good partner will offer complementary strengths, which can free you up to focus on the areas your business does best. For example you can focus on product development while your partner focuses on sales and marketing.

Access resources – your partner may be able to help you by giving you access to resources such as specialised staff, finance and technology.

Access the target market – working with a local partner may be the only way you can access your target market.

So I have a few musing as to why we aren’t all that great at working collaboratively – yet.

A primal fear that sits right in the pit of every New Zealander’s stomach, that anything we share will get nicked, and then will be claimed as somebody else’s brilliant idea or creation. Call it the Aussie effect – yup everything from

Pavlova, Farlap to Rachel Hunter - we Kiwi’s are sick of people stealing what is rightfully ours. So, as a result, working collaboratively, and putting our ideas onto the table is both overwhelming, and seen as being a potential business risk. But as Deborah Cone has shown us, the benefits can be tremendous, saving money, time and resources.

Remember our keywords from earlier in the issue – operative, tactical and strategic… All makes a little more sense now, doesn’t it? There are no losses, no compromises in business mentalities – the focus is a retention of your core business values, the collaboration is based on the belief that there is strength in numbers, and that sales/acquisition of new clients will increase to the benefit of all involved parties.

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It’s always better when we’re together…..

Reciprocal benefits of partner networking

It is essential that our readers have a wider understanding of what ideas are being generated on the global business forum. Ivan Misner is the master of all things ‘networking’. The point that Misnor illustrates so well, is that the focus needs to be on reciprocal benefit – that you have to change the way you are willing to think and feel about your own business, because to include partners, will in the long-term, lead to the most fruitful rewards. We have included Misnor’s metaphor on networking, to really hammer home the point, that this about building a mutual benefit system with long term gains.

Growing your business through the power of relationships:

Your network must not only be broad but also deep. When you rely on others to cross-market your business or promote your program to a client, you’re not asking a simple favour. For true referral networking, you need relationships that are deeper than mere contacts; you need strong connections, established well in advance.

“A farmer in Nebraska won the state fair four times in a row with his corn. Nobody had ever done that before, so the paper sent someone out to interview him.

The reporter asked, “What is your secret? Do you use special corn seed?”

The farmer said, “Absolutely. I develop my own corn seed, and that’s an important aspect of it.”

“Well, then, that’s your secret,” said the reporter. ”You plant a type of corn that’s different from your neighbours.”

“No, I also give it to my neighbours,” said the farmer.

“You give it to your neighbours?” asked the incredulous reporter. ”Why in the world would you give your award-winning corn to your neighbours?”

The farmer said, “Well, you’ve got to understand how corn is pollinated. It’s pollinated from neighbouring fields. And if you’ve got fields around you that don’t have this top-quality corn, your field is not going to grow top-quality corn either. But if my neighbour’s field has this really strong corn, I have awesome corn. And that’s how I’ve won at the Nebraska State Fair the last four years in a row.”

Put simply by the Ed, if you’re going to be an effective networker, you need to go into it with an open mind. There is no room for soloists or Johnny Bravos here.

So the nuts and bolts of the business – are we talking about following a vertical or horizontal integration model or something?

Nope, not really neither – as there is no consolidation or merging into one business, your business identity will still be retained. And you will still be your own boss, a partnership is about equal contribution, so there is to be no fear that you will be sacrificing your independence, or will someone be managing you under another businesses brand umbrella. Through your partnerships you will define your own system of promoting increased financial growth, getting more clients, and spreading the costs -so in short, lower costs and higher profits.

Check out Ivan Misnor’s Blog@Entreprenuer.com – Networking Now

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m So what’s the advantage of joining one of these groups? Well, by entering some basic details about the nature of your business, the programs will suggest people also on the network, that may be a match to your business. We don’t think that the online networking option should take precedence over actually getting out there and meeting people in local business circles. You will have the opportunity to extend your business circles online, and to see who mixes with whom – but credibility and trust will be achieved when you take the time to attend networking events, meet people for coffee, and follow up previously discussed ideas in person or on the phone. How to get started...... The online networking solutions

So Facebook has reached cult status for social networking. You can get in touch with old school chums, organise events, look at what everyone is doing, literally, every day.. it has even become a dating platform with the biggest growing age group – the over 35’s. Your FB profile acts as the cyber window into your personality (although it is a personal belief of the Ed, that the more friends you have on Facebook, the less you have in real life – come on join a sports team or something). But for businesses, there are an increasing number of options available for people needing a helping hand with building their business network. As Facebook may help you to find your ‘perfect match’ or a new buddy, it is important that these business networking sites can be utilized to your advantage. So what’s the

advantage of joining one of these groups? Well, by entering some basic details about the nature of your business, the programs will suggest people also on the network, that may be a match to your business. We don’t think that the online networking option should take precedence over actually getting out there and meeting people in local business circles. You will have the opportunity to extend your business circles online, and to see who mixes with whom – but credibility and trust will be achieved when you take the time to attend networking events, meet people for coffee, and follow up previously discussed ideas in person or on the phone.

Blue Kiwi http://www.bluekiwi.fr/We are the Global Conversation Company.

Our mission is to teach companies to engage the collective voices of the Web in conversation, in order to deliver the products and services we all deserve. We know: People on the Web + Affinity + Conversation = Instant, Passionate Community

When companies learn to listen and engage in conversations with the world, they create passionate communities around their brands and gain the insight needed to move their business ahead.

Coconex http://www.coconex.comCoconex is the ultimate resource for connecting and promoting your business. All the power of the social media phenomenon, all the strategic know-how of best business marketing. A little less about promoting your business and you (as linkedin does) more to do with focusing on the connections between you and your customers suppliers and connections.

Linkedin http://www.linkedin.comBuilding a profile, a referral system

Users can’t directly contact anyone who is not in their immediate circle of contacts, and has to request a referral endorsement from a common colleague. You have the ability to protect access to yourself and your own existing contacts.

Facebook http://www.facebook.comSo it is technically a ‘social networking site’ - but many businesses are still investing time in setting up a facebook page. I would tend to think of this as a strategic client manage-ment tool – you can add clients in, and in turn their friends will be exposed to your businesses page. Business networking could be achieved, but it will really be at a stretch – use facebook for keeping in touch with clients and promoting latest achievements, sales, upcoming events.

How to get started...... The online networking solutions

So Facebook has reached cult status for social networking. You can get in touch with old school chums, organise events, look at what everyone is doing, literally, every day.. it has even become a dating platform with the biggest growing age group – the over 35’s. Your FB profile acts as the cyber window into your personality (although it is a personal belief of the Ed, that the more friends you have on Facebook, the less you have in real life – come on join a sports team or something). But for businesses, there are an increasing number of options available for people needing a helping hand with building their business network. As Facebook may help you to find your ‘perfect match’ or a new buddy, it is important that these business networking sites can be utilized to your advantage.

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Key PartnersThere are a number of aspects to partnering in your business that you are either doing right now, want to do right now or have no idea about. Partnerships add a huge new dynamic to your business and you may have ‘partners’ right now but don’t regard them as such. We’re going to try and encourage you to think more broadly about this aspect of your business model and find new opportunities to innovate.

Here’s the four we’ll cover in this issue;

Strategic AlliancesWe are writing this publication in Canterbury, New Zealand for readers all over the world. So here’s a true story from down home regarding the value behind strategic alliances.We’re blessed in NZ with a small population, plenty of elbow space and the ability to produce a high ratio of smart people who back them-selves to be successful.In the ICT sector here in Canterbury there are ¬ 900 companies trading in the space. Over two thirds employ one person – the business owner. However, they are we believe, in the main, non-competing but they are also very definitely ploughing their own furrows.Strategic Alliances provide a huge step up in the game – it’s a bit like signing a new striker and a new centre half from Brazil – immediately everyone around them has to lift their game. We positively encourage these guys to reach out and initiate contact with the other guys around them, potential SA partners and start to explore

the opportunities and the new dynamism that might be created. Chances are that they are all oblivious of one another’s existence and so will need some sort of medium to connect. Plenty of those around we’d say! So -

- Get yourself some rules of engagement put together – we’ll include these in our next issue in case you’re flat tack and your nose is flicking sparks off the grindstone. - Stick you head out of your silo and see what else is going on.- Get to work on your business model. Carve out some time in your week to check your BMI and plan. - Most of all – be brave and bold and go and communicate with new people.

Cultivating SA partners locally is the first and moist significant step in reaching out to SAP’s beyond your shores. If you’re hanging on to the reins of an aspiring business model that aims to take you off shore – you can’t afford not to cut your teeth on your local and as yet unfound network.

Co-PetitionCrikey! You mean I need to go and talk with my competition! The minute I walk in their building they will scan me for everything I know and point the desk lamp in my………a bit too dramatic maybe but gives you the sense of what goes on in the mind when this area of the partnerships within the business model is brought into play.The secret here is to first understand which

sandpit you play in, as a business not a mid-morning alternative to the b-ball net in the office.

To understand that, you’ve got to be clued in to your….you’ve guessed it…business model. What room have you in there to give you the boldness of action that means talking to your competition? Here’s one – you may have a direct local competitor selling what you sell at the price you sell it to the people you want to buy it. Happens everywhere, however, this may well be the likely outcome of both parties not actually doing the work inovled in identifying what it is you do and who you do it with. It takes one of you to innovate and identify that there’s a better way of doing business – more money, better growth prospects, new venture. You could take the initiative and talk to your competition about partnering – avoiding the potential risks of both trying to take the same slice of cake, again.What it also does, on a much lower level, is engage you with likeminded individuals who, you presume, are fighting to get your customers. Normally this is crap. It’s the product on uncer-tainty, disconnection with the market because you’re always in your silo and lack of belief in the value proposition of your own business model.

Get over it.

I regularly meet with two other business advisors and we knew from the start that we don’t compete with each other. We have skills

In a networking group, you should talk about more than just business. A referral relationship is more than just, “I do business, you do business, let’s do business.” A much better approach is to find common ground on a personal level, then relate your business to it.

What does Alex Osterwalder have to say:

Osterwalder distinguishes between 4 key types of partner networks:

* Strategic alliances between non competitors * Strategic partnerships between competitors * Joint ventures to develop new businesses * Buyer – supplier relationships to assure reliable supplies

Our partner networks are so closely relating to our KA’s (Key Activities) and our KR’s (Key Resources), that at times, the differences seem indistinguishable.We want to get these areas sorted and remain clearly organised, as these are the factors that will inevitably effect the efficiency of how your business operates. So in short, here are some explanations of why it remains to be so crucially important to get these factors right; ensure that your part-nerships can reduce your business costs and reduce risks, will mean that these partnerships can evolve together, as your business grows.

Optimisation and the economy of scale - it is illogical for one company to have all the resources that they need – O and EOS are usually formed to reduce costs and often involve outsourcing or sharing infrastructure.

Reduction if risk in an uncertain market – It is not unusual for competing parties to combine forces – this may mean seeing the mutual benefits in working together on a project.

Motivation to form partnerships based on the need to acquire a certain element that another party may possess.

This could be access to key customers or relationships with key resource providers.

Business Model Generation on issuu.com

- Who are our key partners?

- Who are our key suppliers?

- Which key activities do partners perform?

that are different and often complimentary and it goes without saying that we have no intention of ripping each other off. More so, we innovate and look for ways to collaborate.

Joint VenturesAcross the coffee houses of the world you will hear the terms JV and joint venture bandied around. If Starbucks ever collated the top ten phrases used on their premises I reckon it would be right up there, slightly further back that credit crunch.Joint ventures are the ultimate and don’t refer to going on a camping trip loaded up with smoke able contraband. No, we refer to them as mutu-ally beneficial partnerships between probably non-competing but complimentary entities.There are rules of engagement again (yep, we’ll cover this in the next issue too) but that’s all good.

The killer here is getting your head in the right space to realise that you have an opportunity for an as yet low detail venture and you’ve realised you’re missing something. The business model innovation process helps you do this. The next step is to work through the process of identify-ing who or what you’re missing. Once that’s done the whole process goes through the sugar rush phase of getting to know each other and sharing common goals and aspirations. Much like the sales process, you’ll know if it’s a fit pretty early on in the piece. What we want you to do is stick JV on the list and check it out as an option for innovation. Buyer Supplier.

You buy stuff and sell stuff. So that covers a significant chunk of business models. I buy because the guy is cheap and it gives me great margin. I buy because I like the guy. We’ve always bought from these guys.They sell us good gear.My customers want what they’ve got.Could be any number of reasons. But when did you ever sit down with the supplier and listen to what they are trying to do and where they are going with their business?

In the current economic climate, many long term buyer supplier agreements have vaporised in the trail of destruction caused by touch cash flow. Many of these could have been saved if the parties had taken the time to talk beyond the simple transactional stuff. New opportunities could have been explored and issues of potential jeopardy more quickly identified. Message here – take the time to talk to your customers in the supply and value chain more often and at a different level.

Well, there’s enough here to be going on with and we have no intention of turning What’s My into a wiki. We want to plant seeds and we want you to apply the methodology.

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Hamish, we’re talking about partnerships and their role in the business model, Switch is a well know brand here in Christchurch with advocates everywhere – can you tell us your take on partnerships and why you value them so highly?

As a Retail Café business the obvious partner/relationship is the customer. If you don’t look after your customers they won’t come. But I believe the customer isn’t the only partner youneed to keep on side. There are also 2 others, your staff and your suppliers. If one of thesepartners gets off side there seems to be a domino effect. Once one partnership is strainedthe pressure builds and directly affects the others. On the flip side if you look after your staff, suppliers and customers you will have a much higher chance of a healthy business and a successful business model.

You’re very big on getting counsel from your customers – asking their opinion and responding to their feedback – is this a customer as partner model?

I am and therefore my business is very customer focused. It’s like I have another sense inwhich I can directly see and feel customer satisfaction. Every time we serve a customer wehave a chance to make their day better. Not only through the purchase of the product but onan interactive level as we believe or customers want more than just the product. They wanta relationship and a place of ownership.

This is why we listen to our key regular customers through a variety of systems.

1. Casual communication asking how they are and watching their visual satisfaction

2. Organised focus groups – targeting our key regulars

3. Anonymous text feedback – having an open line of anonymous communication

4. News letters asking for feed back

5. Loyalty cards with feedback opportunity within redemption.

Before we make big changes we listen to our customers and find out what they want andtest our ideas. This model works very well for us and we feel we have our finger on the pulseand a good understanding of our customer’s needs.

Your wholesale customers – you regard them as key partners ahead of customers?

As a Wholesale Coffee Company the customer partnerships are a higher level of relationshipand we call them clients. To us, this identifies these relationships as a higher level ofsignificance and importance. But again, if you aren’t looking after your staff or suppliersyou won’t be able to look after your clients. Our client relationships tend to be more on the

personal side as we get to experience the highs and the lows of small to medium businesstherefore the partnerships are very strong.

Tell us Hamish, how often do you review your business model?

I’m a strong believer that the coffee market changes quickly and you need to keep yourrunning shoes around your neck to keep up. I’m always analysing what’s new and who’s not.Why this works and why that doesn’t. It’s the part of the game I love. Looking to adapt andchange to keep ahead of the market requires to some extent a flexible business model, aslong as the partnerships are kept healthy and strong.

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