Business model pretotyping: exploring pre-commercialisation opportunities in practice

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98 Int. J. Innovation and Learning, Vol. 17, No. 1, 2015 Copyright © 2015 Inderscience Enterprises Ltd. Business model pretotyping: exploring pre-commercialisation opportunities in practice Jacob Brix* School of Business and Social Sciences, Aarhus University, Fuglesangs Allé 29, DK-8210 Aarhus V, Denmark Email: [email protected] *Corresponding author Henning Sejer Jakobsen Center for Ideas and Innovation, Danish Technological Institute, Kongsvangs Alle 29, DK-8000 Aarhus C, Denmark Email: [email protected] Abstract: Most practitioners working with innovation agree that business modelling is imperative for their organisations’ survival. Nonetheless, the same practitioners still spend the majority of the time devoted for innovation on their product/process, and only limited time – if any – on exploring new or complementing business models. This myopic ‘product/process’ focus is no longer enough for organisations to create new radical breakthroughs in the market(s). Thus, to assist practitioners in changing this behaviour, our paper prescribes a directly implementable method named the vertical innovation process (VIP) framework. The VIP framework can be used to create different alternatives and variations of business models (pretotypes) when practitioners find themselves between the discovery of a breakthrough and the commercialisation of it. Keywords: business model innovation; learning; pretotyping; radical innovation; organisational practice. Reference to this paper should be made as follows: Brix, J. and Jakobsen, H.S. (2015) ‘Business model pretotyping: exploring pre-commercialisation opportunities in practice’, Int. J. Innovation and Learning, Vol. 17, No. 1, pp.98–110. Biographical notes: Jacob Brix specialises in radical innovation management. He is an Industrial Researcher at Aarhus University’s School of Business and Social Sciences, and in 2012–2013, he is a Visiting Scholar at the Lally School of Management and Technology at Rensselaer Polytechnic Institute in Troy, New York. Henning Sejer Jakobsen is a Civil Engineer and Senior Innovation Consultant at the Danish Technological Institute’s Center for Ideas and Innovation. He has global experience in radical innovation management and he is the creator of the VIP framework.

Transcript of Business model pretotyping: exploring pre-commercialisation opportunities in practice

98 Int. J. Innovation and Learning, Vol. 17, No. 1, 2015

Copyright © 2015 Inderscience Enterprises Ltd.

Business model pretotyping: exploring pre-commercialisation opportunities in practice

Jacob Brix* School of Business and Social Sciences, Aarhus University, Fuglesangs Allé 29, DK-8210 Aarhus V, Denmark Email: [email protected] *Corresponding author

Henning Sejer Jakobsen Center for Ideas and Innovation, Danish Technological Institute, Kongsvangs Alle 29, DK-8000 Aarhus C, Denmark Email: [email protected]

Abstract: Most practitioners working with innovation agree that business modelling is imperative for their organisations’ survival. Nonetheless, the same practitioners still spend the majority of the time devoted for innovation on their product/process, and only limited time – if any – on exploring new or complementing business models. This myopic ‘product/process’ focus is no longer enough for organisations to create new radical breakthroughs in the market(s). Thus, to assist practitioners in changing this behaviour, our paper prescribes a directly implementable method named the vertical innovation process (VIP) framework. The VIP framework can be used to create different alternatives and variations of business models (pretotypes) when practitioners find themselves between the discovery of a breakthrough and the commercialisation of it.

Keywords: business model innovation; learning; pretotyping; radical innovation; organisational practice.

Reference to this paper should be made as follows: Brix, J. and Jakobsen, H.S. (2015) ‘Business model pretotyping: exploring pre-commercialisation opportunities in practice’, Int. J. Innovation and Learning, Vol. 17, No. 1, pp.98–110.

Biographical notes: Jacob Brix specialises in radical innovation management. He is an Industrial Researcher at Aarhus University’s School of Business and Social Sciences, and in 2012–2013, he is a Visiting Scholar at the Lally School of Management and Technology at Rensselaer Polytechnic Institute in Troy, New York.

Henning Sejer Jakobsen is a Civil Engineer and Senior Innovation Consultant at the Danish Technological Institute’s Center for Ideas and Innovation. He has global experience in radical innovation management and he is the creator of the VIP framework.

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This paper is a revised and expanded version of a paper entitled ‘The vertical innovation process: constructing sustainable business models in practice’ presented at the International Society for Professional Innovation Management (ISPIM) Symposium, Seoul, South Korea, December 2012.

1 Introduction

At the moment, the largest growing management fad is business modelling, and this tendency goes for all types of organisations, both public and private. The interest is accelerating because of the increased complexity and agility in the contemporary business world, e.g., Dobni (2012), Sankowska (2013) and Pastuszak et al. (2013). Here it is no longer enough to develop business plans with an one product – one solution perspective, because this type of set-up is easily copied by competitors and it is not disruptive enough to change the market(s) cf. Johnson et al. (2008), O’Connor et al. (2008) and Zott et al. (2011). Consequently, new ways of sustainably creating and maintaining businesses are needed if top managements, Board of Directors, City Councils, etc., want their organisations to survive, to be efficient/effective and to prosper on the long run (Huber, 2011; Burton et al., 2010; Phusavat et al., 2009).

In the academic community, the business model literature is starting to sprout as a scientific revolution (Kuhn, 1962). Here only little coherence exists regarding definitions, scopes, and areas of application (Zott et al., 2011). Until now, there are only two generic aspects about business models that scholars agree on. First, having a clear and stated business model can be the key to create and maintain a sustainable business, as the holistic approach to innovation is superior to focusing narrowly on a great product/service/etc. (e.g., Chesbrough, 2006; Johnson et al., 2008). Secondly, the most generic way to describe a business model is to state ‘how a company creates and delivers value to its customers, and how (some of) this value can be put back in the company’ (e.g., Chesbrough, 2006; Zott et al., 2011).

The premise of this article is based on our experience as a consultant and an industrial researcher. For the last years we have realised that there is an immense shortcoming in the way people in organisational practice initiate and utilise business modelling. Some use business modelling to understand and communicate about their business internally in the organisation, and others use it to improve their business in general by understanding and trying to improve the value creation mechanisms. In short, it seems that strategists and innovation professionals believe that business modelling is the new panacea to survive on the short-term basis and to flourish on the long run. However, when asked about the content of a business model and concrete methods to describe and develop a business model, most of the practitioners rely on their own understanding (read: assumption) of what a business model consists of; or they relate uncritically to Osterwalder and Pigneur’s (2010) business model generation canvas. This shortcoming characterises the reality of the practitioners working with business model innovation. This is claimed, because most of the professionals we advise and collaborate with still focus narrowly on ‘the brilliant idea/product’, the ‘optimised production process’ and/or the ‘best procedures for maintaining a high service level with fewer resources’. Hence, only limited resources are dedicated to explore all the other aspects that can influence the

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potential success of the new business model, because the majority of the allocated time for innovation still is spend uncritically on the product/service/process. Nevertheless, most managers claim to understand the importance of the business model and that they understand their business or services in a holistic context – but mainly as a stable situation. This perspective of the practitioners’ false assumption about business model innovation is substantiated by our observations determining that these individuals uncritically keep focusing on the usual marketing channels and sales as a product/marked approach because these factors are known and (to some extent) still working reasonably. In short, they do not seek new potential because of the high uncertainty represented by such strivings.

To stretch the existing research frontier of business model innovation, we present a practitioner oriented perspective that is directly implementable to reduce this high uncertainty in organisational practice. The purpose of this study is hence to present a novel way to create new business model pretotypes to increase the potential of new business creation and simultaneously to reduce the high uncertainty related to these kinds of processes. The creation of the business model pretotypes is based on the vertical innovation process (VIP) framework, which is a systematic process consisting of nine steps. The VIP framework has been developed and utilised as a consultancy model for the past 15 years in the Danish industry, in Eastern Europe and in Asia. By pretotyping, we refer to the process of using the VIP framework to create multiple outlines of new business models. Here knowledge is to be sought and integrated into the different outlines to understand the full potential and future implication of implementing these pretotypes as full-born business models into the organisational practice.

The goal of the study is twofold. The first goal is to present the VIP framework and how it is operationalised. The second goal is to widen the current understanding of business modelling in practice by presenting a method that seeks business model innovation as a separated process before business model commercialisation.

2 Current state of the business model literature in organisational practice

The literature on business models is scattered and is not developed in a uniform direction, cf. Morris et al. (2005) and Eppler et al. (2011). Since the beginning of the new millennium, the publications in the business and management field have exploded having business modelling as core subject, both in terms of special subject articles (non-peer reviewed) and journal articles. In their 2005 review, Morris et al. (2005) found that three general categories of definitions had emerged and were utilised to describe business models. At the time, these categories represented ‘economic’ [profit generation], ‘operational’ [architectural and design configuration], and ‘strategic’ [direction, competitive advantage and sustainability] perspectives on business model generation.

A more recent review made by Zott et al. (2011) found that 37% of the publications take the concept of business models for granted in which no definition is given. Moreover, they found that less than half (only 44%) explicitly define or conceptualise what a business model is, when claiming new knowledge. According to et al. (2011) current state-of-the-art has centred itself around three different silos, each containing different conceptualisations. These silos are

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1 e-business

2 strategy models (value creation and value capture)

3 technology and innovation management models (Ibid).

The issue of having un-defined contributions and having different silos of research creating different discourses in each of their branch is expected when embryonic research becomes more saturated cf. Kuhn’s (1962) perspective on the development of normal science.

To demonstrate the line of business modelling that is most utilised in contemporary innovation research the most cited constructs (cf. Google Scholar) are summarised in Table 1. The table is divided into the originators, their definition of business models, and the areas of inquiry they find important when organisations strive to create new business. Table 1 Recognised business model frameworks

Author(s) and name Definition Areas of inquiry Chesbrough’s (2006) Open business model framework

A business model performs two important functions: it creates

value and it captures a portion of that value (p.108).

Value proposition Market segment

Value chain Cost structure and profit

potential Value network

Competitive strategy Johnson, Christensen and Kagermann’s (2008) Innosight model

A business model consists of four interlocking elements that create

and deliver value (p.52)

Customer value proposition Profit formula Key resources Key processes

Osterwalder and Pigneur’s (2010) Business model generation canvas

A business model describes the rationale of how an organisation creates, delivers, and captures

value (p.14)

Customer segments Value proposition

Channels Customer relationship

Revenue streams Key resources Key activities

Key partnerships Cost structure

Source: Authors’ elaboration

The comparison of the most cited frameworks found three interesting shortcomings. First, the business model frameworks are biased towards marketing and customers. All the frameworks focus on value generation and capture and therefore they can according to Zott et al. (2010) be categorised as ‘strategy models’. This claim is further strengthened because Chesbrough (2006) emphasises ‘value chain’, ‘value proposition’ and ‘value network’; Johnson et al.’s (2008) have ‘customer value proposition’ as one of four interlocking elements; and Osterwalder and Pigneur’s (2010) focus on ‘customer

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segments’, ‘value creation’ and ‘customer relationships’, three elements out of nine in total.

The problem that emerges based on this biased value orientation is that organisations utilising these frameworks miss out on a large potential of new business creation. This is argued since these frameworks are convergent of nature, because they do not seek business model innovation as a goal; rather, they concern value creation and caption as a strategic goal, thus business model commercialisation. Hence, these models should first be applied in practice when commercialisation of an innovation is the goal, and not when using business modelling to explore new innovative types of opportunities during the innovation process.

The second shortcoming found when comparing the models is their customer/market-orientation, and their lack of differentiation between customers and users. In many industries the customer and the end-user are not the same entity - especially when referring to public organisations that pay for a product/service and subsequently makes it available to either an employee or citizen in the community. In addition, when being in the industry of buying and selling CO2 quotes, electricity, medicine on prescription, etc. that is not controlled by the customers as end-users, but by the buyer (often politicians/legislators), there is a significant potential, which can only be sought by going beyond the strategy and marketing-biased perspective on existing business model frameworks.

The third shortcoming we found is that existing frameworks are not operational enough to implement in organisational practice. For example, Chesbrough (2006) and Johnson et al. (2008) claim to be operational in their set-up. However, we stress that they are not operational enough. This bold statement is argued since the scholars do not present concrete examples of ‘how to’ start each process in the generation of the business model. E.g., Chesbrough defines a four-phased process to start the development of new business models, where six functions must be treated to describe it (Chesbrough, 2006). Here he describe what large corporations have done to create new business models, but no further explanation is made to prescribe the process. Similar critique can be pointed at Johnson et al. (2008) who state exactly what the four interlocking elements of their business model framework are, but they do not clarify how to generate new ideas, or how to explore different alternative business model outlines. In short, they do not demonstrate how to mix different set-ups in the process before selecting the final business model outline (before commercialisation, that is). This critique does not necessarily mean that the models are not good. They are good constructs, but unfortunately they are too difficult for practitioners to understand to implement in practice. Only Osterwalder and Pigneur’s (2010) canvas presents precise processes and tools, which practitioners can apply in their organisations when they want to work with business model generation. It is operational frameworks like these that people in the industry ask for when striving to strengthen their business or when creating a new business – and it is properly therefore their (2010) business model generation canvas is so immensely successful in organisations across Europe. Still, even though Osterwalder and Pigneur’s (2010) present an excellent operational method for implementing their canvas, it remains biased towards the strategy and commercialisation perspective that reduces its applicability in many specialised industries, e.g. the ones where the customer and the user are not the same entity, and where legislation pays a crucial role.

These three shortcomings do have an effect on organisational practice. As stated before, the frameworks presented in table 1 mainly represent what Zott et al. (2011)

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would categorise as ‘strategy models’ because they focus primarily on generating and capturing value. The problem is that business professionals utilise these strategy models when striving to create business model innovation. This is a fundamental fallacy, since the strategy models are made for purposes of commercialisation and not business model innovation. In short, (if utilised) practitioners apply these models wrongly and not least prematurely in their innovation process, when their projects are not fully developed. This is argued because there is a large difference between describing an existing business model by utilising a business model framework and prescribing, e.g., a new technological breakthrough as multiple potential business model outlines (pretotyping).

We argue that the VIP framework can act as a solution to the three identified shortcomings above, because it

1 represents a ‘technology and innovation management model’ cf. Zott et al. (2011)

2 that it is divergent (opportunity seeking) because it goes beyond the value creation and capture as well as the market perspectives

3 because it is of prescriptive nature.

Figure 1 The VIP framework (see online version for colours)

Source: Authors’ elaboration: inspired by Drejer (2001) and the Doblin Group’s Innovation Landscape (see Keeley et al., 2010)

3 The VIP framework

The VIP framework is a business model innovation process. It can be utilised to pretotype different outlines for new business creation when an organisation has got a breakthrough (e.g., technological) that is not yet a finished product ready for sale. To explore/find multiple areas of application, practitioners should focus on the function of their new breakthrough, and investigate how and where this function could be applicable, e.g., in other industries and/or in other technological processes. Hence, the VIP is a divergent process that seeks potential in different aspects. The simultaneous development of multiple business model pretotypes in the VIP is important both to explore and learn

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about the full potential of the new breakthrough, and finally to lower the high level of insecurity related to creation of business model innovation. We define a business model pretotype as ‘a systematic description of the potential area(s) of application for the new breakthrough including a description of the hindrances that must be removed/reduced to for the pretotype to succeed’. A complete business model pretotype can therefore, when finalised, be presented to the organisation’s decision-makers who can decide to transform and describe the pretotype(s) into a strategy business model where focus is on commercialisation, e.g., by using Osterwalder and Pigneur’s (2010), Chesbrough’s (2006) or Johnson et al.’s (2008) frameworks. Figure 1 presents the VIP framework.

The VIP framework consists of nine areas of inquiry that must be thoroughly explored and described before business model pretotypes can be developed. The nine areas of inquiry are inspired by the Doblin Group’s Innovation Landscape (e.g., Keeley et al., 2010) and Drejer’s (2001) perspective on the pace of changes in relation to the innovation landscape. In Table 2, the content of each of the nine levels of inquiry is explained to demonstrate the exact type of knowledge that should be sought when working with the VIP framework in practice, and to demonstrate where and how it differentiates from the strategy frameworks presented above. Table 2 Explaining the content of the VIP framework

Area of inquiry Explanation of content Product How technologies, techniques and design approaches must be used in

the construction of the product Process How to produce the product and/or to provide the service including the

buying or selling rights Business How to meet/interact with the customers and/or users; including

branding, creation of needs and relationship building System How ‘the subject’ interacts with other products, services and systems,

both internally and externally to the organisation Social How to get acceptance of ‘the subject’ by users and partners and their

motivation to use the product, service and/or system Financial How to finance the business model pretotype, how the ‘value’ will flow

in the business model between all the actors; e.g. money and/or barter agreements

Cultural How the habits in the target group(s), the communities, the branch and society must be considered (including written and unwritten rules/customs)

Political – legislative How decisions are made including barriers (opportunities) such as laws, legislation and competitive tendering in the context of the new idea

‘Other’ What might also be affected beside the eight areas of inquiry above

Source: Authors’ elaboration: inspired by Drejer (2001) and Keeley et al. (2010)

Drejer (2001) and Keeley et al. (2010) inspire the VIP framework because they focus on the complete external environment to an organisation and not only the product, process and value flow (strategy perspective). By integrating the ‘system’, ‘cultural’, ‘political – legislative’ and ‘other’ areas of inquiry proposed by Drejer (2001) and Keeley et al. (2010) into the VIP framework, it widens the content of the strategy models. Moreover, Drejer (2001) claims that changes occur constantly in all levels of inquiry, but at different

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paces of change according to different parts of reality. This implies that some areas of inquiry are easier to influence than others. Still, it is imperative to treat all areas of inquiry to prepare the business model pretotype to meet reality, since the levels of aggregation are intertwined and thus influence one another.

In line with this perspective, the VIP framework stresses that it is the lowest common denominator that influences the final outline of a business model pretotype. Often, legislation (political area of inquiry) is the lowest common denominator. This is especially clear in the context of developing public-private partnerships. Here, competitive tendering and procurement rules etc. more often than not decrease the potential for innovation to be successful because of pre-project compromises. The political/legislative part is henceforth considered as the most difficult to assert an influence on. However, if a strong potential is found amongst the lowest denominators, this potential often represents the highest effect of the innovative strivings – if they can be changed.

4 Operational method for utilising the VIP framework

The VIP framework is an idea generation process used to generate a large number of different ideas based on different points of view, different sources of inspiration and different approaches to each of the nine areas of inquiry. See the business model pretotyping setup below: Table 2 Business model pretotyping setup

Area of inquiry Paradigm influence

Preserving Stretching Breaking

Product Process Business System Social Financial Cultural Political – legislative ‘Other’

Source: Developed by the authors

Table 2 demonstrates a ‘screen shot’ of the setup utilised to generate ideas for new business model pretotypes. The ‘Paradigm influence’ is used to sort the generated idea(s) in relation to the project in focus:

1 if it is easy implementable (preserving)

2 hard implementable (stretching)

3 if it is considered almost impossible to realise (breaking) cf. McFadzean’s (1998) creative continuum.

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As the concept of ‘paradigm’ only refers to a ratio of the existing situation, a paradigm preserving input is easy to integrate into the business model; however this type of input often represents a ‘red ocean’ outcome according to Kim and Mauborgne (2005). The paradigm-stretching inputs represent ideas that are harder to integrate, e.g., because of the social acceptance of the perspective, because of the difficulty of integrating new technology with other software systems, etc. Finally, paradigm-breaking inputs represent ideas that seem impossible to integrate successfully – here the blue oceans wait for the organisation that succeeds in creating change (Ibid.). An example of an idea in the paradigm-breaking part of the framework could be to change a law, which could be excellent for the medico industry or by influencing politicians to create a law making existing offerings prohibited.

The operational method utilised for processing and completing the VIP (see the six steps below) is based on one or multiple workshops that are carefully prepared by the organiser(s) beforehand. Here an outsider to the organisation either facilitates the project team and invited experts relevant to the project in focus (leading them through the process) or s/he consults them by actively questioning and challenging them and their assumptions cf. Brix et al.’s (2012) methods to complete innovation workshops and Brix’s (in press) IKC framework utilised to remove assumptions. Below the operational process is presented (also illustrated in Figure 2).

The VIP is operationalised by completing six steps:

Preparation before workshops

1 Select an idea with an experienced breakthrough. It must be novel and have a high estimated potential. (It does not matter in which area of inquiry in the VIP the idea is found)

2 Find the assumptions about the selected idea on the nine levels of inquiry, so they can be challenged when generating new inputs later in the process (e.g., by using de Bono’s (1973) Provocative Operation methods)

During the workshop(s)

3 Generate new ideas in the context of each of the nine areas of inquiry (must be documented by more than one word) a Start by generating inputs in one of the areas of inquiry at a time by challenging

the found assumptions from step two. b Utilise methods from creativity literature to generate ideas – do not use/limit

idea creation to brainstorming, but use other more radical approaches, e.g., Playstorming (Jakobsen and Hansen, 2007) and by provoking the existing situation and challenges.

4 Read the stickers and sort them so their content fits one of the nine areas of inquiry according to the expected paradigm influence.

5 Discuss the ideas on each level and document additional insights from the dialogue. Here it is reasonable to consult experts (often external to the organisation) in areas of inquiry where the team is not knowledgeable enough to avoid decisions based on false assumptions.

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6 When the documentation is over, the team can start pretotyping. a Select an idea in the VIP framework that is interesting. b Start the pretotype outlining by selecting an idea on all nine levels of inquiry, so

the team can get inspired from the process. If more ideas on one level seem promising, then the pretotype must be developed in different versions, so they can be compared later.

c To satisfy decision-makers it is important to develop both short-term (preserving) pretotypes that are easy commercialised and more stretching/breaking pretotypes that can change the game on the long run.

Figure 2 Example of creating different prototypes (see online version for colours)

Source: Authors’ development

Figure 2 exemplifies the sixth step in the VIP. The yellow stickers in figure 2 represent different ideas that have been sorted according to their expected influence on the breakthrough under development (step 4), and that the team responsible for the pretotyping have discussed and further documented (step 5). In figure 2 there are sketched two different pretotypes. Pretotype ‘x’ represents a paradigm-breaking product whereas pretotype ‘y’ represents a paradigm-preserving product. By following the stippled lines it is possible to see that the two pretotypes need different ideas regarding ‘process’, ‘system’, ‘culture’ ‘legislation’, etc. These nine levels must all be described in each pretotype and be made as a short report, so no insights are lost.

5 Implementation plan

When the responsible for the work with business model innovation have finalised the six steps and described the pretotype reports they find promising/interesting, then it is imperative for them to describe an implementation plan for each of the pretotypes. This plan contains of seven headlines, so the pretotype(s) can be presented to the organisation’s decision-makers answering typical questions of doubt, e.g. concerning strategies, vision and goal (Burton et al., 2010). See Table 3.

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When having commented the seven headlines for all the pretotypes that are to be presented to the decision-makers the pretotyping is over. Hereafter it is up to the decision-makers to decide if actual projects should be started up, where commercial development of the pretotypes can be initiated, e.g. by the strategy business model frameworks. Table 3 Final business model pretotype scheme

Content Description ‘Text’ Plan How to implement the pretotype Ploy How to reach the goal of the pretotype (tips, tricks and

manoeuvres)

Pattern What are the expected emerging changes that might occur during the implementation of the pretotype

Position How to position the pretotype in relation to customers, users, external and internal environment

Perspective Which other areas of opportunity/application (might) exist in relation to the pretotype

Powers Which strengths and pioneer advantages do we have based on the pretotype

Problems Which problems may arise before, during and after the implementation of the pretotype

Source: Authors’ elaboration, inspired by Mintzberg (1987)

6 Discussion and implications

We argue that the VIP framework can be used to learn from the unexpected and to reduce high uncertainty when working with business model innovation in practice. Our approach corresponds the pre-commercialisation activity that Paulson et al. (2007) conclude to be imperative, because the transparent approach utilised in the pretotyping demonstrates and documents the entire process to both top-level management, Board of directors, city councils, etc., bringing them closer to the understanding of the roots and newly gained insight of the team responsible for developing the business model pretotype(s). This pre-commercialisation work increases the implementation of commercialisation of projects that are radical and thus defined by high uncertainty.

The contribution of the VIP framework to the literature is threefold. First, the VIP framework is presented as a transparent and operational tool that can be applied by organisations in practice, when they find themselves between the discovery of a breakthrough and the commercialisation of it. This is argued because the VIP is a prescriptive business model innovation tool in contrast to other business model constructs such as Johnson et al. (2008), Chesbrough (2006) and Osterwalder and Pigneur (2010) that are descriptive commercialisations tools. Secondly, the VIP framework addresses key players in the markets such as public institutions and the medico industry because it encompasses the ‘political - legislative’, the ‘cultural’ and the ‘system’ perspectives that other business model constructs inadequately bypass. This broadened perspective on the potential new business allows practitioners to create pretotypes that are closer to the reality in which they might be implemented, which cf. Huber (2011) is imperative for

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organisations to survive and prosper. Finally, the VIP offers a tool to specialised industries, where the customer and the users are not necessarily the same entity. Hence, the VIP framework offers solutions to the shortcomings determined in the hitherto most cited business model constructs.

The paper demonstrates that the literature on business modelling still is young and underdeveloped and that this causes difficulties for practitioners. This is argued, because the practitioners still cannot utilise most of the published research on business modelling directly in their organisational practice, because it is too theoretical and because it is not described in an operational manner. Therefore practitioners still spend most of their allocated time for innovation on the product/process and only few resources on the business model centred on their breakthroughs. Since multiple scholars conclude that it is new business models that create disruptions (Christensen and Raynor, 2003; Huber, 2011) and not only technological breakthroughs, future research should focus on how to change the current behaviour of practitioners so they will start prioritise spending time and resources on business model innovation, and not only focus myopically on their products/processes. In line with this, it is imperative that scholars clearly articulate if their business model constructs are innovation or commercialisation models, and that they are clear for which industries they are appropriate to be implemented in. If practitioners believe that business modelling is the new panacea for their organisations to survive it is our duty as scholars to assist them as much as possible in the process.

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