Meet the Expert
Dave Summa
Partner, Business Model Innovations, LLC
- 33 years as CEO, consultant, in R&D management
- CEO of three startup technology companies
- Partner and Global Innovation Practice Leader at McKinsey & Company
- Closed seven financings, $250M in licensing deals, $500M in M&A deals and created three large joint ventures with Fortune 500 corporate partners.
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Business Model Innovation
Partner, Business Model Innovations, LLC
Defined Terms
- Business model innovation
- Innovations may be technological, for example CDs replaced vinyl records as land line telephones were replaced by cell phones. Another type of innovation involves changing the business model without substantially changing the technological basis for the product. For example, Netflix did not change the technology through which movies and TV programs were viewed. They changed the delivery mechanism and method by which customers received DVDs. The change was based on the insight that customers did not want to travel to a video store to rent movies, when they could order them from home and receive them through the mail. They disrupted incumbents such as Blockbuster Videos, with their chain of brick and mortar locations not through technological but through business model innovation.
- Deep insights
- A term derived from the software industry that refers to the very first complete prototype or iteration of a new product or design.
- Disruptor
- The company or entity that has either a technological innovation or a business model innovation that has the potential to disrupt the existing business or market. The disruptor is often a start-up company that is on the offense against an established incumbent, but can be a large company that seizes on its disruptive technology to change therules of the game.
- Ground zero
- This is a point in an industry or value chain where a business model innovation is focused. Ground zero is where the familiar landscape is so altered it can appear to have been devastated. The incumbent is under attack whether they recognize it or not; the disruptor has put them at a ground zero.
- Incumbent
- Usually an established company that is faced with a competitor which has either a technological innovation or a business model innovation that is intended to disrupt that company's business. Often, the incumbent either denies or downplays the threat from the disruptor.
- Margin pools
- Gross profit earned by all participants in the value chain.
Business Model Innovation:
Defined Terms
Expert Topic