Big Ideas:

• Businesses can earn a profit and help better society at the same time.
• Social entrepreneurship is a growing trend as we seek more meaning and fulfillment in our lives.

I am finding that people of all ages are increasingly searching for more meaning and fulfillment in work and life in general. There is much more to life than a good salary and conspicuous consumption. On my JetSetCitizen blog, I have interviewed dozens of digital nomads, perpetual travelers or location independents that are putting lifestyle ahead of materialism.

A great life is not just about leisure time and personal satisfaction; making a real difference in the world is also becoming an essential component. Entrepreneurship is often necessary to have the freedom to craft a perfect lifestyle, but an even more important factor is the opportunity to really create social good in the world.

What is Social Entrepreneurship?

Social Entrepreneurship is using business principles and practices in new ventures to bring about social change in the world. Profits are a by-product, or the organization will fail, but the real focus is to make a difference in the world.

Why isn’t Every Entrepreneur a Social Entrepreneur?

It is important to remember that our consumption oriented society is less than a century old. We have been trained to be consumers with insatiable wants and the planned obsolescence in all the things we buy is designed to generate more profits, not create societal value.

In the decades after WWII, affordable mass produced goods greatly increased living standards.  Large corporations mastered the art of mass advertising. Getting people to buy more goods and services, created jobs and real wealth. Life was good.

Little was known of the environmental and social consequences of those actions. Crime, obesity, pollution and all the other negative externalities of a consumer society were either non-existent or not understood. What was good for corporations, was good for individuals so everyone was happy.

Businesses don’t profit by getting us to spend less, conserve energy or be generous with our time and money. Companies want us to consume high margin products and services.

Fast food restaurants make more money selling sugared water and manufactured food, than anyone could by selling vegetables or advocating drinking tap water. How can carrots and broccoli compete with movie endorsed happy meals?

Wealth is Not Measured by GDP

The health of an economy is commonly measured by GDP growth, basically buying and selling more stuff. Clean air and water, safety, parks and wilderness, income equality, strong community, family values, general health levels and virtually everything that we consider priceless aren’t valued in gross domestic product.

An under-employed worker may only contribute $10,000 or $20,000 per year to a modern economy, however put that same individual in jail, with incarceration costs at more than $40,000 per year and you have doubled or quadrupled that individual’s contribution to economic growth.

There is a Better Way

When business oriented individuals create enterprises to alleviate societal ills, business transactions take place to satisfy the economists, but more importantly real social value or social capital is created that truly enriches the quality of life for recipients. It might not be as profitable as fast food hamburgers or financial derivatives, but there are opportunities to make a real impact in our communities. Profits alone are not a particularly good motivator, we all want to do something good in the world and social entrepreneurship might be the answer.

Social Entrepreneurship Examples

Grameen Bank - Provides no-collateral loans to the rural poor in Bangladesh

Fifteen – Jamie Oliver’s chef apprenticeship program for unemployed youth.

The Big Issue – Print magazine giving homeless an opportunity to earn an income.

The Eden Project – Promoting environmental and global awareness through arts and music events, education, gardens and social projects.

Acumen Fund – Invests in social enterprises.

Ashoka.org – Promoting social entrepreneurship for more than three decades.

If you know of more examples, please tell us in the comments. I would love to create a directory of social entrepreneurship initiatives around the world.

Action Items

• Can you shift your business to more socially beneficial activities?
• Can you employ, educate or help socially disadvantaged in your community?
• How much money do you need to earn? How about reinvesting the surplus into social change?
• Having difficulty finding meaning and fulfillment in your life? Perhaps you should start thinking of how you can give more to those in need. The greatest happiness comes from contribution not consumption.

Related posts:

1. Games Can Make the World a Better Place
2. Social Capital is More Valuable than Money
3. Alex Bogusky and the Fearless Revolution towards Conscious Capitalism

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Big Idea:

• You can’t optimize yourself to greatness, outrageous results require outrageous actions.

Entrepreneurship, Lady Gaga Style

Love her or hate her, there is no denying that Lady Gaga is a superstar. She knows how to shock, entertain and continually push the bar. From bikini stage outfits to arriving at an awards ceremony in a man-carried egg, Lady Gaga knows how to make a splash.

Most businesses don’t think like Lady Gaga. Playing by the rules and doing what everyone else is doing is much safer than taking bold risks. That is why the state of business is so damn lousy. How often are you wowed by a company?

The Problem with Businesses

Ramit Sethi of Iwillteachyoutoberich.com wrote something that has bothered me for a while:

Years ago, American Airlines removed one olive from each first-class salad, resulting in a savings of $40,000/year. They are a massive public company with huge scale, so you can’t get those kinds of results. But the principle — focusing on small actions that give you incredibly huge results — is something you can do.

I am a huge fan of Ramit and I certainly believe in the idea of the Pareto Principle or the 80/20 rule where focusing on high impact areas can deliver disproportionate results, however I don’t think American Airlines cutting an olive from salads falls in that category.

Far too many businesses strive to cut costs and get more efficient as a way to success. That mentality might of worked in the industrial age, but we are long past that stage.

Do you think Lady Gaga has achieved the level of success she has because she is more efficient or better at cost cutting than the hundreds of thousands of less successful performers?

So many businesses are obsessed about keeping labour costs to some predetermined percentage of sales. Squeezing even an extra 0.1 percent can potentially add a lot of money to immediate profits but at what cost? Companies bullshit about how important customer service and employee satisfaction are, yet try to cut worker hours down to a bare minimum. The result is overworked, stress out employees and customers that are not getting satisfactory service.

What if those companies took a hit up front and actually increased the amount of staff on hand? What would be the long term benefit of a less stressed workforce or customers that can actually get the assistance they need?

United Airlines cut the olive from martinis in business class. Do you think those passengers noticed? I know some that did. What is the cost of an olive per business class traveler? They are saving five or ten cents on a fare that can be thousands of dollars.

That type of cost cutting is short sighted and self-defeating. I wonder how much the consultants were paid that provided the idea to cut an olive from the two airlines? My guess is that companies spending their time counting olives have much bigger problems to deal with.

Seth Godin said,

We see one organization after another, left unchecked, pushing miners or laborers or bureaucrats to exhaustion, all in the name of enhanced productivity.

Cash flow and costs are important but you can’t optimize your way to greatness. (Unless you do it to an extreme, Walmart style.) Instead of trying to giving your customers as little as possible, how about taking a cue from Lady Gaga and go full out for every interaction?

Action Items

• Are you running your business with an accountant or entrepreneur mindset?
• Are your trying to be more efficient or are you growing a business?
• Instead of trying to cut from your customers, think about where you can add more value.
• What small thing could you do for your customers or staff that would generate disproportionate results?
• Is there merit in diverting a portion of your marketing budget to making current customers happier? It is much cheaper to keep a current customer than it is to find a new one.

Related posts:

1. Do you Run a Business or a Company?
2. Social Capital is More Valuable than Money
3. How David Beats Goliath – Break the Rules to Succeed

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Big Ideas:

• You can’t win against bigger or more skilled competitors if you follow the same rules. Create your own rules to succeed.
• The underdog has to outwork the competition in unexpected ways.

Malcolm Gladwell has a great article in The New Yorker on how underdogs can triumph against more skilled opponents. (Thanks to Karol Gadja for the link.) There are many great military and sports examples of how unconventional strategies and outworking your competition are the only ways to succeed.

When an underdog fought like David, he usually won. But most of the time underdogs didn’t fight like David. Of the two hundred and two lopsided conflicts in Arreguín-Toft’s database, the underdog chose to go toe to toe with Goliath the conventional way a hundred and fifty-two times—and lost a hundred and nineteen times

Insurgents work harder than Goliath. But their other advantage is that they will do what is “socially horrifying”—they will challenge the conventions about how battles are supposed to be fought.

This type of strategy is at the heart of all business model innovation. As the old saying goes, “you can’t out Amazon, Amazon.” If you want to compete against established players you need to create new rules that favor your style of company.

• Selling T-shirts is a commodity business. Threadless.com turned it into a monthly design contest where customers vote on the best designs.
• Apple doesn’t compete on price and features with other computer companies. It sells premium priced, beautiful computers that work better because they monopolize the hardware and software.
• Installed software is expensive to buy and maintain. SaaS (Software as a Service) applications turn those purchases into a monthly subscription where data is always backed up and the software is always current.
• Discount European airlines can make more money from selling hotels, rental cars and upsells than they can from the flight itself. That is how they can give the flights away for next to free.
• Starbucks has a limited food selection that is shipped out of a central location. Great local cafes bake fresh pastries right on the premises.

Action Items

• What can you do to change how your industry works?
• Could you give away your main product in order to upsell other services?
• What unique skill or knowledge can you use to compete against larger companies?
• What is the biggest bottleneck in your industry? How can you completely bypass that bottleneck?
• Instead of selling services sporadically, can you charge a monthly subscription for an ongoing solution?

Related posts:

1. Practically Radical: Four Simple Truths About Leading Change and Making a Difference – William C. Taylor
2. Rejuvenate your Business Model with the Question Framework Exercise
3. Do you Run a Business or a Company?

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Big Ideas:

• Here is a great web application that turns email into a game.
• Game dynamics promise to transform many of our experiences into fun, challenging adventures.

Email as a Game?

Finally, one of the greatest productivity destroyers has been gamified. If you have trouble emptying your inbox, Baydin’s Email Game might be the solution.

The best games are simple to understand, yet difficult to master. The Email Game magically delivers those gaming dynamics and takes it one step further by providing a real world achievement, an empty inbox.

How it Works

Connecting to your Gmail account, the Email Game has access to your emails and forces you to take action on every item in your inbox, one at a time. With a time counter racing down to zero, you need to take action quickly to maximize your points.

Quick, what is it going to be? Reply? Delete?, Archive? Take action and earn points. Can’t decide? You can skip an email but you will lose points.

There is an interesting “Boomerang” feature that lets you archive emails, yet bring them back to your inbox at a specified time in the future.

This is a fantastic idea with great execution. Everything is designed to get you to clear emails from your inbox as efficiently as possible.

What else can be Gamified?

Simple gaming dynamics exist in many areas of our lives. We compete for followers, friends and likes online. We collect rewards points and frequent flyer miles. Instantly winning a free ice cream or candy bar used to be a popular motivator for children. Cars like the Chevy Leaf even reward you with a growing electronic plant on your dashboard when you save gas. What components of your business can be turned into a game?

Action Items

• Think of ways to gamify your business offering.
• Can your employees ‘level up’ instead of taking training programs or getting promotions?
• Can you encourage customer loyalty and evangelism through friendly competitions to recommend your services?
• Can service failures like waiting times be made enjoyable through games or contests?

Links
The Gamification of a Sushi Chain in Japan
Games Can Make the World a Better Place

Related posts:

1. The Gamification of Business – Example of Kurasushi in Japan
2. Games Can Make the World a Better Place
3. Gamestorming (Games + Brainstorming) – Fun, Creativity Techniques by Dave Gray

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Big Ideas:

• Social capital is the most valuable asset.
• Startup incubators prove that very little money is needed to build hugely valuable companies.
• 8 effective ways to build social capital.

What is Social Capital?

Social capital is the idea that our networks and connections have value. We understand this idea in expressions like “It’s not what you know, it’s who you know.” However, it has only been in recent years that people are are really starting to understand and exploit their own social capital.

Let’s start off with a few questions. (I would love to see your answers in the comments.)

As an entrepreneur, what would you rather have; $100,000 in cash or strong connections with potential customers interested in buying your services? It would be pretty easy to burn through that much money without cost-effective ways of generating leads and an efficient conversion process.

Taking that first question further, would your rather have $100,000 now or solid introductions to venture capitalists and angel investors that could potentially provide millions of dollars in financing and provide the expertise to skyrocket your business?

How much money is a successful social media network of thousands of friends, followers and blog readers worth? Imagine if you had to use traditional advertising to convince that market to trust you.

With low start up costs for most technology or service businesses, access to money is nice but certainly not a barrier to success (I have a related post on this called, Is Venture Capital Dead?. Our social networks, however are invaluable in gaining valuable attention in a world awash in information.

Startup Incubators

I often point to the amazing success of start up incubators like Ycombinator and Techstars to demonstrate the power of social capital. With just $20,000 to $30,000 of investment and a few months in the programs, businesses with million dollar valuations have been repeatedly created. Two popular successes have been AirBnB and Dropbox.

Access to mentors, investor networks and just the camaraderie and support of fellow entrepreneurs is a major accelerator to business success.  A good idea and motivated team, supported with the social capital of the incubator are all that is needed.

Economics of Abundance

Unlike financial, resource or physical capital, social capital is not a scarce resource. This is a big idea. The way to get more social capital is through generosity. The more value you create for others, the more social capital, you create for yourself. You don’t need money, education or family connections to accumulate social capital, all that is needed is time and kindness.

How you build Social Capital

• Create insanely great content and give it away for free.
• Get involved in meetups and real world events.
• Be a connector and introduce people who need to meet.
• Share the valuable content of others with your network.
• Be there for your peers with an ear or a helping hand.
• Celebrate your supporters and fans with recognition and genuine appreciation.
• Connect with others without asking for anything.
• In summary: give, share, help, connect.

More Resources
Social Capital on Wikipedia
Academic Definitions of Social Capital from a variety of researchers.

Related posts:

1. Crowdfunding is Much More than Just Raising Capital
2. Is Social Media Making us Less Human?
3. Is Venture Capital Dead?

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Big Ideas:

• Guy Kawasaki talks about his latest book Enchantment.
• Brian Clark demonstrates how to write create copy that gets results.
• The best marketing is baked into the product.

Brian Clark has a great interview with Guy Kawasaki about his recent book Enchantment.  As an aside, take a moment to see how beautifully Brian Clark writes copy. Who wouldn’t listen to that interview with that much enticement? Learn from that article and use the same tactics on your own sales pages.

Clark and Kawasaki hi-light many key points of marketing and business. Here is just one of the key take aways:

The ultimate marketing is baked in. It is not lipstick you stick on a pig. If you have somebody beautiful, lipstick just makes her more beautiful. If you have a pig, you still have a pig with lipstick. So the key is to not have a pig. And not figuring that the lipstick will fix the pig.

Why are Most Businesses so Mediocre?

It is astonishing how terrible most businesses are now. Mediocre products with lousy service is the norm in English speaking countries.

When sales and profits are faltering most businesses turn to advertising to fix the problem. That is what Guy Kawasaki refers to as sticking lipstick on a pig.

If you build a great product and deliver great service, your marketing will take care of itself.

How many good shopping experiences have you had in the last month? Can you identify any companies that really delivered wow service that you told friends about? I would guess the answer to both of those questions is no.

Delivering great service costs much less than advertising to acquire new customers.

Action Items

• How can you create more value for your customers?
• Can you create exceptional service experiences that customers will talk about?
• Do you and your employees care about delivering outstanding service? If not, that is the source of your problems.

Related posts:

1. Social Media Marketing is all about Free Content
2. Your Business Needs a Growth Hacker
3. Creative Marketing and Social Media Strategy from Jerry Aulenbach

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Big Ideas:

• Start ups need a different type of marketing expertise than more established companies.
• Growth hackers can focus on scalable and repeatable ways to grow your business.

Sean Ellis of Startup-Marketing.com coined a fantastic term, Growth Hacker.

Once startups are ready to scale, their biggest challenge is often hiring someone capable of leading the growth charge.   A marketer with the right talents and approach can kick some serious ass once product-market fit and an efficient conversion/monetization process have been proven.

After product-market fit and an efficient conversion process, the next critical step is finding scalable, repeatable and sustainable ways to grow the business.  If you can’t do this, nothing else really matters.

The Problem with Most Businesses

I have seen many marketing and social media consultants put so much emphasis on high level strategy, positioning, branding, logo design, etc. that the basic and easy opportunities to generate leads and customers remain neglected.

• Who cares about your beautiful $20,000 brochureware website, if there is no content there to attract organic traffic or entice visitors to want to learn more about your offering?
• Your professionally planned social media implementation doesn’t matter if your customers are online neophytes. Getting thousands of followers that will never be interested in your business is even worse.
• Instead of looking at more effective ways of advertising, perhaps you should deliver a product or service worth buying.

A talented growth hacker can help you find the low hanging fruit to maximize your marketing budget.

Action Items:

• A compelling business model comes first. You better have a good scalable way to create value for customers and get paid for it.
• Make your business stand out from competitors. What value propositions do you offer? Make sure this is clearly communicated without the generic marketing fluff like “Customer service is our highest priority.”
• Deliver on your value propositions. Service and quality in English speaking countries is so lousy now. The cheapest marketing is to actually care about customers.
• Craft a unique story. If you want to be remembered, do something memorable. Check out my post on how a real estate agent uses bacon to stand out.
• Research the keywords your customers are searching for and then optimize your website for those phrases.
• Create online content your customers want to read, watch, listen to and share.
• Develop effective lead nurturing campaigns to convert casual browsers into interested customers.
• Have clear calls-to-action on all your marketing materials.
• Engage people online and offline as humans with real conversations, not marketing pitches.
• Consistently deliver more than you promise.

Am I missing anything? Let me know in the comments.

Related posts:

1. Is Your Business the Right Size?
2. The Gamification of Business – Example of Kurasushi in Japan
3. Business Model Management is the Only Way to Stay Competive

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Big Ideas:

• Businesses are increasingly using games to improve the customer experience and productivity.
• Kurasushi in Japan offers a perfect example of how the restaurant experience can be transformed through simple gaming elements.

One of the funnest places I have ever eaten is Kurasushi in Japan. The popular Japanese chain a a perfect example of how to turn business more into a game to enhance the customer experience, excitement and even lower costs.

Kurasushi is a kaiten, rotating sushi bar, where the sushi streams by on rotating belts throughout the restaurant. Kurasushi has taken the experience to new levels with a touch panel ordering system and plate collector that counts how many sushi dishes you have eaten.

Not only does this reduce the staff needed to take special orders and deliver the food, but Kurasushi also turns it into a game by giving users a chance to win a small prize after every five plates dropped into the collector.

Even though the prizes are small and not particularly interesting, it is a lot of fun to drop the plates and play the game to see if you win or not.

Here is an explanation of the image above.

1. Prize Dispenser – The available prizes are above every table in a clear box so that it is completely visible to everyone. You can easily see other tables win.

2. Touch Panel – Here you can order fresh dishes and other items like miso soup or deserts. It is also turns into a simple game after every five dishes dropped in the plate collector slot. Users have to chose one of three choices and variations of a slot machine type of game are displayed, slowing revealing if you have won or not.

3. Custom Order Belt – This is a special high speed belt that delivers food on a special train to specific tables. When your order arrives it starts beeping to notify you and there is a button to press to signal that you have finished taking your sushi plates off of the train. It is actually a lot of fun to see the train quickly pull up to your table and then return after it is finished.

4. Main Sushi Belt – This is the main rotating sushi belt where sushi is delivered in a steady stream to every table in the restaurant.

5. Plate Collector Slot – This is where you drop finished plates to be tallied on the touch panel display. When you are finished eating, there is a button to press to call a staff member over to give you your final bill.

The Future is Games

In a previous post, Games Can Make the World a Better Place, I have included a couple of great videos highlighting the potential of games to improve our lives. There are many examples listed in that post but here are some more ideas.

Contests and loyalty programs like airmiles or credit card rebates are common but there is still a lot of room for companies to improve the user experience through gaming elements.

Salespeople are typically motivated with incentives and publicly displayed sales records. Customer service staff compete for the most positive reviews. Manufacturing firms monitor product defects and on-time deliveries. Geo-based location services like Foursquare and Gowalla encourage repeat business. However, those measures are just scraping the surface of the possibilities to gamify our business and lives.

Restaurants could have loyalty programs that reward customers who have ordered the most dishes. Regular customers could be given special tables and items not on the menu.

Department stores could have in store treasure hunts where customers have to locate items throughout the store. To increase environmental awareness, they could  have contests to guess how many plastic bags are used by the company every year.

Toy stores could have receipts with special numbers that give online characters special powers in competitions against the characters of other customers. Kids would want to buy more things in the store to increase their character’s abilities.

Airlines could have in flight seat raffles while waiting for passengers to board. This might make the wait actually enjoyable and encourage passengers to get to the plane earlier.

Authors could have contests where users have to find mistakes in new manuscripts.

With mobile phone scannable QR codes, it is possible to link real life to the Internet. The possibilities really are endless.

Action Items

• How can you turn you business more into a game?
• Can you get customers competing against each other for more status or recognition?
• Can you get employees working together to come up with new ideas or ways to increase profitability?

Links
Gamification on Wikipedia
The Gamification Encyclopedia
The Gamification Blog
Fun is the Future: Mastering Gamification – Youtube video
The Future is a Video Game – Canadian Business Article

Related posts:

1. Games Can Make the World a Better Place
2. Business Model Management is the Only Way to Stay Competive
3. Rejuvenate your Business Model with the Question Framework Exercise

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Big Ideas:

Use the Question Framework Exercise to discover new business models and better ways to create value for your customers.

Let’s face it, most businesses are pretty underwhelming. They offer similar goods at about the same price points, generally with lousy service. For every Apple, there are dozens of other companies competing on price. For every, Zappos, there are countless competitors basically doing the same as everyone else. Creativity and innovation are the only ways to stand out above the competition. That generally means radically reinventing your business model.

The Question Framework Exercise

Here is my Question Framework for developing new business opportunities. It is best done with a diverse team of people but it can be valuable for individuals as well.

Don’t dismiss any ideas. The entire point is to examine the furthest extremes to see if there is any value at that edges. That is how breakthroughs are achieved. You can’t incrementally improve your way to a new business model. That is exactly the reason small and nimble startups are devastating old industries. Blockbuster didn’t create Netflicks and Microsoft didn’t create Google. They couldn’t have. It would have required a radically different way of thinking.

The Question Framework Exercise can help you discover radical and  compelling business models. Doing what everyone else is doing is the road to declining profit margins and intense competition.

Get out some flip charts or paper the walls of a room and write the following questions at the top of each section:

Who? What? Where? Why? When? How? How much? How many?

Many people are visual learners so I find it helpful to draw simple icons for each major idea. For example, a stick man with a question mark can be used for “Who?” “What?” might be a box with a question mark, etc.

Don’ t be afraid to jump around and add ideas where every they fit. Keep it very unstructured in the beginning.

In this example, I used a cafe owner.

Who?

Who buys? – Students doing homework, business people meeting or using the Internet, commuters getting coffee on the way to work. etc.

From here you can start experimenting.

• Students – Does it make sense to create a social venue for concerts, art exhibitions, etc.
• Business people – could this be a shared office space? Maybe they want private offices or conference rooms.
• Commuters – Could you sell a full breakfast? Do you need a drive through window to speed up the sales process? Should you be at a gas station or near a busy intersection because commuters are stopping there anyway?
• Coffee connoisseurs – Should you focus on premium coffees?
• Who delivers? – students, housewives, perhaps you could partner with another deliver service to jointly distribute.
• Who makes it? – Bikini clad servers, coffee experts, vending machines?
• Who is the most profitable segment?
• Who is the least profitable?

What?

As you can see above, what you sell is directly related to who is buying. For all the charts, you can put your main customer segments down the left side (students, business people, connoisseurs, commuters, etc.)

What do you sell? Are you selling coffee or a comfortable place for people to meet?

• Coffee – Could you offer more variety? Higher quality? A variety of roasts? More ethically sourced coffee?
• Meeting Space – Should you have more comfortable chairs? Should you have private meeting rooms? Should the atmosphere be lively or quiet?
• Convenience – Are several small kiosks better than a larger cafe?
• Coffee Culture – Should you market high-end coffee makers and espresso machines.

What complimentary products and services could you offer for each of the segment you identified in the “Who?” section.

• Students – Copy and printing services. Designer T-Shirts,
• Business People – Networking groups, office space, answering service.
• Commuters – dry cleaning drop off service
• Connoisseurs – gourmet beans, high-end espresso machines

What would change in your business if you simplified your product offering?

• For example, only 3 or 4 espresso products with one or two pastries.
• Maybe you could offer better quality products at a lower price.
• Maybe this would make the ordering process more streamlined so customers would get served faster.

What if you greatly expanded your offering?

• 100 different coffee beans.
• Maybe you would attract the aficionados.
• Maybe customers would buy in much larger quantities.

Where?

Again, as you start hashing out these questions you will notice overlap. Where you sell will depend on the segments you discovered in the “Who?” section.

Where do you sell?

• Are you selling premium coffees that people take home?
• Maybe it could be an Internet focused business?
• Maybe you could have a monthly coffee subscription?
• Should you be located in a trendy coffee district or near busy thoroughfares?
• Should you set up near a university?
• Should you be in a high end furniture district?
• Should you deliver coffee directly to offices?
• Should you do catering services for meetings?

Why?

Why would customers choose your company?

• Are you socially conscious?
• Do you have the best coffee?
• Are you the cheapest?
• Do you have the best selection?
• Is the atmosphere of the cafe important?
• Are you active in the community?
• Loyalty programs?
• Innovative marketing?

When?

When do customers buy?

• In the morning?
• Afternoon?
• During working hours?
• On the weekend?
• After school?

How?

How do customers buy?

• Internet?
• Drive through windows?

How is the coffee made?

• Automated vending machines?
• Expert barristas?

How is the coffee sourced?

• Purchased directly from growers.
• Investing in developing countries.

How is the coffee roasted?

• Onsite so that there is always a roasting aroma.
• Does this add to the experience of the cafe?

How much?

• Should you be very expensive to convey exclusivity and high quality?
• What if you doubled your prices? What would you have to change to keep customers? Would you be more profitable?
• Could you offer the coffee for free, in exchange for advertising on cups or the up sell of other products?
• Could free coffee be the loss leader for other products?
• Could the coffee be an inexpensive sampler to get consumers to buy beans?

How many?

• Are you selling one cup of coffee at a time or are you focusing on large conferences and events where you sell hundreds?
• Could you have a buyers club for beans where you can offer discounts if enough people agreed to purchase at the same time?
• How many locations? Should you have kiosks on both sides of a street to make it easy for commuters to quickly stop by?
• How would the business change if you had no staff? (vending machines)
• What if you tripled the staff and increased the quality?
• What if you had ten times the volume in one location? What would you have to do differently?

These questions and answers are just a starting point. A good group of people can come up with many more opportunities in a short time. Don’t dismiss outrageous ideas because that is where the real breakthroughs are discovered.

Other companies have succeeded by asking questions like:

• What if we didn’t use the hub and spoke model for airlines?
• What if we gave our product away for free and made it up with advertising?
• What if we stopped using gasoline powered cars?
• What if we don’t need to physically attend a university to learn?
• What if we didn’t rent an office space any longer?
• What if workers could work any hours they wanted?
• What if our employees were all over the world and never met?

Question your assumptions and you will find new opportunities. It is important to learn from the past, but don’t let the old way of doing things constrain your possibilities.

If you need help discovering new business models, I can help. Email me at (john (at) ideaeconomy (dot) net.

Further Reading

Dan Roam’s book The Back of the Napkin offers some great techniques for both visually representing ideas and questioning assumptions.
Download the Business Model Canvas for a different look at the same types of questions from Business Model Generation.

Related posts:

1. Do you Run a Business or a Company?
2. An Amazing Example of Curated Content: Free as a Business Model
3. Business Model Generation Book

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Big Ideas:

• “The only way to stand out from the crowd is to stand for something special.”
• Look at your business from the perspective of different CEOs to gain insights and make creative breakthroughs.
• Focus on what is right with your business, not just what is wrong.

FastCompany magazine cofounder and author of the book, Practically Radical: Not-So-Crazy Ways to Transform Your Company, Shake Up Your Industry, and Challenge Yourself, offers four simple principles to transform your business in this ChangeThis PDF.

We are living through the age of disruption. You can’t do big things if you’re content with doing things a little better than everyone else or a little differently than how you did them before. In an era of hyper-competition and non-stop dislocation, the only way to stand out from the crowd is to stand for something special. Today, the most successful organizations don’t just out-compete their rivals, they redefine the terms of competition by embracing one-of-a-kind ideas in a world filled with me-too thinking.

There’s nothing quite as exhilarating as watching a young organization reshape its field—a blank-sheet-of-paper startup that transforms an industry, a challenger brand that redefines a market. Alas, there’s nothing quite as common as watching an established organization—a company that reached great heights in one era of technology, markets, and culture—struggle to regain its stature as a force for leadership in a new era. The work of deep-seated, sustainable change remains the hardest work there is.

Here are four of those principles—simple rules for transforming your  company, shaking up your industry, and challenging yourself

1. What you see shapes how you change
We’ve all experienced déjà vu—looking at an unfamiliar situation and feeling like you’ve seen it before. Vuja dé is the flip side of that—looking at a familiar situation (an industry you’ve worked in for decades, products you’ve worked on for years) as if you’ve never seen it before, and, with that fresh perspective, developing a distinctive point of view on the future.
TBWA also uses what it calls the “CEO Hat” exercise to encourage organizations with tunnel vision to develop a new line of sight. Participants search for out-of-the-box answers to big strategic questions by reaching into boxes filled with hats, shirts, and other paraphernalia from breakthrough organizations such as Apple, Virgin, Target, Southwest Airlines—and then adopt the mindset of those free-thinking companies as they think about the questions with their clients. “We define possible strategies for companies through the eyes and values and under the leadership of a different CEO,” explains Laurie Coots, TBWA’s chief marketing officer. “The sheer act of being free to think like somebody else gives you permission to generate ideas that you might not get to otherwise.

2. Where you look shapes what you see
The most creative leaders I’ve met don’t aspire to learn from the “best in class” in their industry—especially when best in class isn’t all that great. Instead, they aspire to learn from innovators far outside their industry as a way to shake things up and leapfrog the competition. Ideas that are routine in one industry can be revolutionary when they migrate to another industry, especially when those ideas challenge the prevailing assumptions that define so many industries

3. There’s nothing wrong with your organization that can’t be fixed by what’s right with your organization.
I’m convinced that one of the big reasons for the failure of so many change programs is that by focusing almost solely on what’s wrong with their organizations, and by importing off-the-shelf strategies devised by outside experts consumed with what’s new, leaders undervalue what’s right with their organizations, and overlook home-grown strategies rooted in the wisdom of the past.

4. Success is not just about thinking differently from the competition
Even the most creative leaders recognize that long-term success is not just about thinking differently from other companies. It is also, and perhaps more importantly, about caring more than other companies—about customers, about colleagues, about how the organization conducts itself in a world with endless temptations to cut corners and compromise on values. For leaders, the pressing question isn’t just what separates you from the competition in the marketplace. It’s also what holds you together in the workplace.

Action Items:

• Use the CEO Hat excercise to look at your business and industry with the perspective of different executives? What would Richard Branson or Steve Jobs do with your business model?
• Look at what is working in other industries and try to bring it to your business? The next time you go to a magazine rack, read something completely unrelated to your business. Find out the most successful companies in that industry and analyze what they are doing right.
• Don’t focus on the negative. What is right about your firm? Can you build on that to really become exemplary?
• The hardest part of business and life is building and maintaining quality relationships. Businesses shouldn’t only be run by numbers. What can you do to care more about your customers and employees?

Links:
Practically Radical PDF
Practically Radical Book on Amazon
Willliam C. Taylor Website
Follow Taylor on Twitter

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