{"id":1469,"date":"2011-01-26T08:51:44","date_gmt":"2011-01-26T16:51:44","guid":{"rendered":"http:\/\/www.artsjournal.com\/artfulmanager\/wp\/2011\/01\/back_to_business_models\/"},"modified":"2011-01-26T08:51:44","modified_gmt":"2011-01-26T16:51:44","slug":"back_to_business_models","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/artfulmanager\/main\/back_to_business_models.php","title":{"rendered":"Back to business models"},"content":{"rendered":"

Diane Ragsdale pulls on the ‘broken business model’ thread<\/a> in her Jumper blog, and triggers a bunch of interesting comments on the subject. She wonders what, exactly, her colleagues mean by a ‘business model,’ and what specifically is broken about it. It’s an essential conversation, and worth every moment of attention it gets (even when we don’t know how to focus that attention).<\/p>\n

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A key challenge in most ‘business model’ conversations in the arts is that they almost immediately focus entirely on revenue streams, rather than the larger integrated system of a functional and vital business model (of which revenue is certainly an essential part).<\/p>\n
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The best attempt to reframe a more coherent and systemic approach to business model discussion, analysis, and design is the book Business Model Generation<\/a><\/i>, by Alexander Osterwalder and Yves Pigneur. It’s not specifically about arts organizations, creative enterprise, or nonprofits. But it sets out a useful definition of what a business model is, how it works, and how we can bring innovation and focused attention to its many moving parts.<\/div>\n
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To start, the book offers a rather useful definition of what a ‘business model’ is:<\/div>\n
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A business model describes the rationale of how an organization creates, delivers, and captures value.<\/div>\n<\/blockquote>\n
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Then, it describes nine essential elements (building blocks) of any business model — for-profit, non-profit, whatever — that work together as a system to create, deliver, and capture value (or not, as the case may be). These are:<\/div>\n
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  • Customer Segments<\/b>: The one or more customer segments the enterprise seeks to serve.<\/li>\n
  • Value Propositions<\/b>: The problems the enterprise seeks to solve for those customers, or the needs it seeks to fill.<\/li>\n
  • Channels<\/b>: The communication, distribution, and sales channels used to connect customers to those value propositions.<\/li>\n
  • Customer Relationships<\/b>: The nature, tone, and intensity of relationships formed between and among customer segments.<\/li>\n
  • Revenue Streams<\/b>: The cash or other economic value generated when value propositions successfully connect with customers.<\/li>\n
  • Key Resources<\/b>: The assets required to develop and deliver the elements described above.<\/li>\n
  • Key Activities<\/b>: The activities required to develop and deliver the elements described above.<\/li>\n
  • Key Partnerships<\/b>: The organizations, individuals, or resources outside the organization required to make the system work.<\/li>\n
  • Cost Structure<\/b>: The costs generated by the interconnection and execution of all the elements defined above.<\/li>\n<\/ul>\n
    While the above elements may seem overly focused on generating profit, the authors of the book are quite careful not to do so. They use ‘value’ as they key issue, and specifically value delivered to a defined group outside the organization. In my ongoing conversations with arts professionals, I’ve actually started to float the term ‘value model’ rather than ‘business model,’ as the latter almost always either derails the conversation into revenue, or disconnects the many for whom ‘business’ is an uncomfortable term related to their work. (The jury is still out on whether the alternate phrase is any better than the original. I’ll keep you posted.)<\/div>\n
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    In a future post, I’ll explore some of the specific business model patterns identified in the book that seem most compelling to our work in the arts.<\/div>\n<\/div>\n
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    Thanks, Diane, for nudging the conversation along!<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    Diane Ragsdale pulls on the ‘broken business model’ thread in her Jumper blog, and triggers a bunch of interesting comments on the subject. She wonders what, exactly, her colleagues mean by a ‘business model,’ and what specifically is broken about it. It’s an essential conversation, and worth every moment of attention it gets (even when […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[4],"tags":[],"class_list":{"0":"post-1469","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-main","7":"entry"},"_links":{"self":[{"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/posts\/1469","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/comments?post=1469"}],"version-history":[{"count":0,"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/posts\/1469\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/media?parent=1469"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/categories?post=1469"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.artsjournal.com\/artfulmanager\/wp-json\/wp\/v2\/tags?post=1469"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}