Monday, February 28, 2011

Innovation : Open and Closed Models

What are some of the key characteristics of open and closed business models?

Open

1.) Speed to market
2.) Iterative design (constantly being virtual and scrumming)
3.) Release smallest subset of functionality - test for consumer /customer demand and build on learnings vs assumptions
4.) Strong in monitoring competitors
5.) Absorb ideas in real time - so agility is typically in founder DNA
6.) Use contract labor vs FTEs
7.) More aggressive in orientation
8.) Focus on Customer Traction and Sales traction vs IP (tail that wags the dog)
9.) Value is placed on financial performance vs projected
10.) Tend to be B2C vs B2B

Closed

1.) Slower to market: focus on perfecting working protoypes before hitting the market
2.) Brand sensitive and protectionistic
3.) Tend to be B2B vs B2C
4.) Dragged down by legacy infrastructure and processes that require customization
5.) Scale and Size matters so tight scrutiny on approach
6.) IP Matters and often complexities lose out on innovation as arrive too late to market
7.) Can be great if the recognition in the market is early enough ahead of the curve to continue to refine models

In the prior blog I wrote on open or closed business models, I indicated that knowing which approach to take is highly predicated on the type of innovation and the type of company you are in.

I always recommend if large global companies are trying to innovate emergence they do so outside the core, and have separate practices and processes from the core, and use the channel/sales capability of the core, but not ingest NEWCO.

I also question the needs for IP protection when in technology web centric models these are nearly impossible to protect and energy I believe is best spent on securing real paying customers.

Companies such as Apple, Google (Android) typify the new world of more open business models. The ecoystems they are building to allow others to take advantage of are simply mind boggling..... abundance rules and scarcity is for dinosaurs.

1 comment:

pollok said...

I would like to start with Jay's statement that Innovation refers to ... Collaboration is related to trust. And trust is related to conversations.
Web Designing Institute

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