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The Business Model Innovation Factory: How to Stay Relevant When The World is Changing by Saul Kaplan

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Chapter 1

Don't Get Netflixed: Your Current Business Model Isn't Going to Last Much Longer

The nuclear industry measures how long a radioactive material will retain its potency by its half-life, which is the time it takes for the material to lose half of its radioactivity. For instance, the half-life of Uranium-235 is 700 million years. No wonder nuclear proliferation is so feared! During the industrial era the half-life of a business model has been measured in generations. Business models have always lasted a long time. Business models rarely changed and were handed down from generation to generation. Most business leaders have never had to change their business model. Most CEOs have led a single business model throughout their entire career. They never learned how to change a business model in business school or from their peers, who also have never had to change their business models.

During the industrial era once the basic rules for how a company creates, delivers, and captures value were established they became etched in stone, fortified by functional silos, and sustained by reinforcing company cultures. All of a company's DNA, energy, and resources were focused on scaling the business model and beating back competition attempting to do a better job executing the same business model. Companies with nearly identical business models slugged it out for market share within well-defined industry sectors. There was a mad rush to copy so-called best practices in order to not be ...

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