Business Model Generation

Authors: Alexander Osterwalder, Yves Pigneur
Year: 2010
Innovation and Businees -BMC-2026-v1.pdf Open PDF
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AARHUS UNIVERSITY ITPDP 2026 Innovation and Basic Business Modeling for IT-products

Kaj Grønbæk

PROGRAM

› Part 1: Innovation Perspectives › What is Innovation? › Incremental vs. radical innovation

› Part 2: Basic Business Modeling › Business Model Canvas method

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INNOVATION

3

SOME DEFINITIONS OF INNOVATION?

The classic definitions of innovation include:

  1. the process of making improvements by introducing something new

  2. the act of introducing something new: something newly introduced (The American Heritage Dictionary).

  3. the process of translating new ideas into tangible societal impact (Krisztina Holly, Vice Provost, University of Southern California, and Executive Director of USC Stevens Institute for Innovation)

    1. the introduction of something new. (Merriam Webster Online)

  1. a new idea, method or device. (Merriam-Webster Online)

  2. the successful exploitation of new ideas (Department of Trade and Industry, UK).

  3. change that creates a new dimension of performancePeter Drucker (Hesselbein, 2002)

  4. A creative idea that is realized [(Frans Johansson)] (Harvard Business School Press, 2004) 9. "The capability of continuously realizing a desired future state" ([John Kao, The Innovation Manifesto, 2005])

  5. "The staging of value and/or the conservation of value." (Daniel Montano 2006.)[1]

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(wikipedia.org)

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THREE INNOVATION MODELS (TUOMI)

Heroic Innovation Model

  • Ex. Thomas A. Edison, James Watt, Tim BernersLee,…

Combinatorial Model (“LEGO model”)

  • Ex. World Wide Web

Organic Model

  • Ex. Linux, Apache, Wiki and other open source

See more on….

http://www.meaningprocessing.com/personalPages/t uomi/articles/NetworksOfInnovationSummit07.pdf

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HYPE, DREAMS AND HOPES J

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Quantum
Computing ?
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INVENTION, INNOVATION AND FUNDING

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INNOVATIONS OFTEN BUILD ON STATE INVENTIONS

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DONALD A. NORMAN & ROBERTO VERGANTI

INCREMENTAL AND RADICAL INNOVATION: DESIGN RESEARCH VS. TECHNOLOGY AND MEANING CHANGE

13

INCREMENTAL AND RADICAL INNOVATION

  • Discusses the role of

  • Design Research

  • Human Centered Design (HCD)

• Incremental innovation: improvements within a given frame of solutions (i.e., “doing better what we already do”);

  • In relation to innovation…

  • Radical innovation: a change of frame (i.e., “doing what we did not do before”).

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DIFFERENCES ILLUSTRATED

› Incremental innovation is climbing on the same mountain

› Radical Innovation is moving to a new and unknown mountain

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TECHNOLOGY AND MEANING CHANGE

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Radical Innovation No Yes Meaning Change E.g. • From Desktop to Notebook Metaphor • From PC to UBI comp Kaj Grønbæk March 2026 16

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EXAMPLES OF INCREMENTAL INNOVATIONS

18

BLACK BOARD à BRIGHTSPACE

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WIKIPEDIA - INCREMENTEL INNOVATION BY THE USERS

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RADICAL INNOVATION

  • Criterion 1: The invention must be novel: It needs to be dissimilar from prior inventions.

  • • Criterion 2: The invention must be unique: It needs to be dissimilar from current inventions.

  • • Criterion 3: The invention must be adopted: It needs to influence the content of future inventions.

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EXAMPLES OF RADICAL INNOVATIONS

24

VIDEO GAMING

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WRIST WATCHES

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SMARTWATCHES?

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Pulse, EEG,
Blood O
2,
Smart-
Watches
Watches as
Health
Trackers
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A REFINED VIEW OF INNOVATION

  • › Technology Push: Radical changes in technology, but meaning remains the same

  • › Technology Epiphanies : Radical change in meaning enabled by new technologies

  • › Meaning Driven: Radical reframing of the (cultural) meaning without changes in technology

  • › Market Pull: Incremental products developed from user needs

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A REFINED VIEW OF INNOVATION

E.g. GenAI tools

E.g. faster GPUs or higher resolution displays E.g. users wish to utilize existing technology in new ways E.g. Computer as automation, tool or medium

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INNOVATION AND DESIGN

› Basic design: Explore new meanings without a specific product in mind

  • › Design-driven: Envisioning new meanings within a product/domain

  • › Human-centered: Explore and understand existing meanings

  • › Tinkering (with technology): (aimlessly) playing with technology

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QUESTIONS ?

34

TO WHAT DEGREE DO YOUR DESIGN IDEAS HAVE HAVE FOCUS ON:

› Meaning change

› Technology change

› Both?

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BUSINESS MODELING

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AARHUS UNIVERSITY Business Model Canvas method Introduced by Alexander Osterwalder

BUSINESS MODEL CANVAS

  • › Alexander Osterwalder

  • › http://alexosterwalder.com

  • › http://www.businessmodelgeneration.com/canvas

  • › http://www.businessmodelgeneration.com/book

  • › https://strategyzer.com/app

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UNIVERSITY
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Tool for basic business model development

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EXAMPLE - ITUNES

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MULTIPLE CANVASES FOR SAME TYPE PRODUCT

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BMC develops over time

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An example – archetypical physical IT-product

Example: Activity Tracker/Fitness Wristband

You’ve arrived at this product idea – how do you build a business model around it?

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ACTIVTY TRACKER CANVAS ?

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ACTIVITY TRACKER CANVAS ?

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  • General public - Fitness enthusiasts

    • People with special movement needs
    • People with sleep problems

  • Kaj Grønbæk March 2026

ACTIVITY TRACKER CANVAS ?

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More movement and General public better sleep - Fitness Access to data enthusiasts via all - People with platforms special Social fitness movement community needs - People with Nudging to sleep more activity problems and sleep Kaj Grønbæk March 2026

ACTIVITY TRACKER CANVAS ?

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More General public movement and - Fitness better sleep enthusiasts Access to data - People with via all special platforms movement Social fitness needs community - People with Sold via web Nudging to sleep shops or more activity problems physical and sleep shops. Kaj Grønbæk March 2026

ACTIVITY TRACKER CANVAS ?

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More Ads
movement and
better sleep
Access to data
via all
platforms
Social fitness		 Social medie
Activity data
on Web
Community		 General public
-
Fitness
enthusiasts
-
People with
special
movement
community
Nudging to
more activity
and sleep		 Sold via web
shops or
physical
shops.		 needs
-
People with
sleep
problems
Kaj Grønbæk March 2026

ACTIVITY TRACKER CANVAS ?

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More Ads movement and Social medie General public better sleep - Activity data Fitness Access to data on Web enthusiasts via all - Community People with platforms special Social fitness movement community needs Sold via web - People with Nudging to shops or sleep more activity physical problems and sleep shops. Price per sold tracker Accessories sale + upgrades (No subscription) Kaj Grønbæk March 2026

ACTIVITY TRACKER CANVAS ?

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More Upgrade Ads movement and General public physical design Social medie - Accessories better sleep Activity data Fitness Access to data enthusiasts New SW, Apps on Web - via all People with and services Community platforms special movement Social fitness needs community - People with Sold via web Nudging to sleep shops or more activity problems physical and sleep shops. Price per sold tracker Accessories sale + upgrades (No subscription) Kaj Grønbæk March 2026

ACTIVITY TRACKER CANVAS ?

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Upgrade
physical design
Accessories
New SW, Apps
and services		 General public
-
Fitness
enthusiasts
-
People with
special
More
movement and
better sleep
Access to data
via all
platforms
Ads
Social medie
Activity data
on Web
Community
Production
facilities
SW Services
Cloud		 movement
needs
-
People with
sleep
problems
Social fitness
community
Nudging to
more activity
and sleep
Sold via web
shops or
physical
shops.
Price per sold tracker
Accessories sale + upgrades
Kaj Grønbæk
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(No subscription)

ACTIVITY TRACKER CANVAS ?

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Manufacturing
partner
Marketing
partner
Cloud host		 Upgrade
physical design
Accessories
New SW, Apps
and services
Production
facilities
SW Services
Cloud		 General public
-
Fitness
enthusiasts
-
People with
special
movement
needs
-
People with
sleep
problems
More
movement and
better sleep
Access to data
via all
platforms
Social fitness
community
Nudging to
more activity
and sleep
Sold via web
shops or
physical
shops.
Ads
Social medie
Activity data
on Web
Community
Price per sold tracker
Accessories sale + upgrades
HUS Kaj Grønbæk
March 2026
(No subscription)

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ACTIVITY TRACKER CANVAS ? ACTIVITY TRACKER CANVAS ?
Upgrade
physical design
Accessories
New SW, Apps
and services
Manufacturing
partner
Marketing
partner		 General public
-
Fitness
enthusiasts
-
People with
special
movement
More
movement and
better sleep
Access to data
via all
platforms
Ads
Social medie
Activity data
on Web
Community
needs
Social fitness
Production
facilities
SW Services
Cloud
Cloud host		 -
People with
sleep
problems
community
Nudging to
more activity
and sleep
Sold via web
shops or
physical
shops.
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UNIVERSITY
Workforce salaries
Production facilities
Cloud-hosting
Marketing (if not outsourced)		 Kaj Grønbæk
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Price per sold tracker
Accessories sale + upgrades
(No subscription)

Use BMC for your IT-product ideas!

  • › Start with ”customer segments”

› REMARK: Customer and User are not necessarily the same group of people

› Focus on ”value proposition”

  • › And move on to Revenue stream

› REMARK : Many IT-products do have a ”free” element,

  • › It is important to consider if the value proposition holds for all the Revenue streams assumed…

› The other fields follows naturally from the start fields …

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