Creating Business Models in Real Time

In 2009,  I was privileged to co-create an awesome book, Business Model Generation, with Alex Osterwalder and Yves Pigneur.     Co-creating the book with Alex was an amazing experience, created some lasting friendships with other co-creators, and of course Alex.  After Angela Dunn's monthly twitter-chat, #ideachat, I decided to ask Alex what made him decide to do co-create this book:

Why did you decide to co-create Business Model Generation?

Several managers and consultants around the world were already using the content of my doctoral dissertation because I put it online. Yves, my former PhD supervisor, and I thought it would be great to involve these practitioners and their experience to evaluate our content and make the book more relevant. It would allow us to test each and every one of our ideas with practitioners immediately. Co-creation helped us assure we were on track in creating a useful book.

Of course we could only do this because we decided to self-publish at the expense of the comfort of the infrastructure of a publishing house.

How did you decide whom to invite?

I wrote a blogpost and anybody who paid our “entry fee” was able to join. Each member would become part of our so-called “Book Hub”, get access to content, be able to give feedback, and they would have their name in the book. The fee was first USD$24 and we raised it gradually to USD$243 to keep the community exclusive. We tested the limits.

How did you manage all the ideas and comments you received?

We posted our content continuously as so-called “book chunks”. These were raw and undersigned pieces of content. For each chunk we started a discussion thread and answered almost every comment personally. The comments helped us create better content. Sometimes we specifically asked people about their experience or about their opinion. For example, it took some iteration to get members of the Book Hub behind a title for the book.

What tools did you use to help with the project?

I customized a Ning.com platform – an online website to create communities. We had to do everything ourselves, since no publisher offered a platform to do this back then.

How did you decide which ideas to use?

We selected content and ideas based on the strength of the argument or the relevance of the experience. We already did research on business models for 10 years, so it was easy for us to weed out pure opinion. I believe every co-creation project needs an experienced core team that makes final content decisions.

Was most of the input valuable or was there a lot of “noise”?

Well, even when it was “noise”, it was usually a good indicator that our ideas were not clear enough or our arguments too weak. Very little content was useless. Of course some of the co-authors were more experienced than others and their comments were naturally more relevant. However, since we wanted to create an inclusive book we carefully listened to every single comment in order to sense what people were concerned about, what they wanted (or needed) to learn, and to learn how we could best convey our ideas.

What were the benefits of co-creating the book?

• It forces you to make every idea you write about relevant. Feedback is immediate, which makes you vulnerable as an author in the short term, but the long-term benefits outweighs this: it forces you to do your best for every piece of content you submit to co-creators.
• We could immediately test what would or would not work/resonate with our audience.
• Co-authors brought in a lot of experience and good comments that guided us throughout the writing process.
• The 470 co-authors became a powerful global sales force, because each and every one of them had their name in the book, contributed to it, and believed in the final outcome.
• It helped us pre-finance the expensive design and production of the book, since we managed the whole publishing process from A-Z on our own with a core-team of 5 people.

What were the limitations or obstacles, if any?

Co-creation is much more work than writing somewhere in a hidden corner and then publishing your content. However, the benefits outweigh the costs.

It was hard, hard, hard, to set-up everything ourselves and do something totally new and different. We were running the project on a shoestring budget, but aimed at creating a global management bestseller.

Nobody believed this could work: Two no-name authors who wanted to create a visual management bestseller and get people to pay to help him or her write the book. People thought we were crazy. All of them probably thought we were totally naïve.

Now publishers are studying our project to learn how they can set-up co-creation platforms for authors who want to go down a similar path.

What did you learn from the experience?

You need to be naïve enough to do things differently. No big publishing house would have allowed us to co-create a fully designed, four color business book in landscape format – because it was contrary to the publishing industry logic. However, we thought of Business Model Generation as a product, not just a book – similar to Apple products.

Our goal was to create the same kind of “unboxing experience” you have when you buy Apple products. This obviously meant breaking with most of the rules of traditional business book publishing. That’s exactly why it became a bestseller. Yves and I created a book on business models that we would have loved to buy ourselves. Since nobody had done it, we did it ourselves.

Would you do it again? And if so, what would you do differently?

We made countless errors on the way, but they were not foreseeable, since we created something totally new. We needed to make the mistakes to learn and iterated.

However, our biggest mistake was not sticking to our plan A of using Fulfillment by Amazon to distribute the book. We wanted to save the margins and went for plan B, which was partnering with a Dutch direct mailing company. That was a painful experience that I really wouldn’t want to live through again. After switching back to Plan A we got back on track again. After a couple of months of proving the success of the book we sold the publishing rights to Wiley – a big publishing house – in order to get physical distribution as well. Now it’s Wiley’s best selling international book.

What advice would you give someone who was thinking of co-creating/co-reviewing?

Don’t look at it as a pure marketing stunt, because it’s trendy to do co-creation. Ask yourself how the process of co-creation can help you craft a better product. Also, be aware that it’s much, much more work to co-create.

Note: Last year, I was honored to co-review Steve Denning's book, Radical Management.  An interview with Steve will be coming shortly.