An iPad App That Helps You Overhaul Your Business Model

In 2009, Alexander Osterwalder and Yves Pigneur self-published Business Model Generation, a book on business-model innovation based on Osterwalder's doctoral thesis. It became a hit among progressive business people and innovators, and in the summer of 2010, Wiley signed on as a wider publisher, greatly increasing the book's distribution and popularity. Now Osterwalder and his team have launched an accompanying iPad app, the Business Model Toolbox, aimed at giving "visionaries, game changers, and challengers" everything they need to turn an idea into a tangible business. The app holds promise, but, as most of these things go, could use some fine-tuning and additional features.

Business-model innovation is a hot topic. As the field has matured beyond a focus on new products and ideas, there is an increasing emphasis on identifying new ways for businesses to earn money. The challenge is that business-model innovation is far from straightforward. It is not a matter of simply changing how you get paid. It more often requires a fundamental redesign of how you create and deliver value, involving all aspects of the business -- and, importantly, the jobs people do.

When I first read Business Model Generation, I was at once impressed and depressed -- impressed because of the design and content of the book, and depressed because I hadn't written it myself. The book is a thoughtful collection of tools, techniques, models, and approaches to inform the Business Model Canvas -- a simple and visually elegant template that breaks a business model into 12 predefined revenue and cost mechanisms. The approach to business-model innovation outlined in the book provides an accessible resource for those wishing to challenge existing assumptions and models or identify new alternatives.

Not surprisingly, the Business Model Canvas is the center of the iPad app. Here, the canvas is used as a way to prototype and illustrate business models. The focus tends to be on disruptive models, but it can also be used to describe and develop less radical changes. In the app, the canvas supplies the main interface, and the user can apply digital sticky notes to its different elements, just as they can on the analog version.

The big enhancement over the book lies in the underlying modeling tools. By specifying customer types, revenue sources, and costs, users can sketch a quick overview of the viability of a business. While it took me a few tries to understand how it all worked (the interface is not exactly intuitive), it functions well, and the analytic tools make it a powerful resource in the right hands.

Overall, the functionality seems solid and well thought through, and the app adds value to the book by providing a useful tool for sketching out ideas and prototyping new businesses. That said, the cost and revenue calculators focus more on manufacturers and widgets and less on services, and the language used in the otherwise helpful reference section is a bit academic.

One puzzling element: the app's price, a hefty $29.99 at the Mac App Store. A new copy of the Business Model Generation book ranges from $15 to $20 on Amazon, so I?m confused as to why the app is so expensive, given that it is not really useful without the book -- it doesn't include nearly enough guidance for how to define and input information. A lower price would surely bait people into buying the book or attending the workshops.

I understand the need to recoup some of the development costs, but a few additions could make the Business Model Toolbox a standalone item that would justify its price point. A diagnostic element could be added that allows users to deconstruct their current model. Or the app could make the models uploadable to a communal database that spots patterns in cost and revenue models and links to alternative models that have been developed by others. Or, based on the patterns in existing models, it could even link to examples of companies and individuals who have been able to build successful alternative businesses.

Ultimately, models are just that -- representations and idealizations that may make logical sense but aren't real. It is not the model that succeeds as much as the ability to motivate and change ingrained behaviors rooted in outdated business models. Showing that in action would be well worth the money.

[Click here to get the app; Top image: Harry Allen's Bank in the Form of a Pig, available for $125 through Areaware]