Innovation is often seen as the creation of entirely new and disruptive ideas. However, many breakthroughs come from recombining existing concepts. What if the secret to innovation isn’t about starting from scratch but about using established patterns to build a winning strategy? Discover Business Model Hacking—a methodology that empowers startups to innovate their business model effectively by leveraging proven patterns and strategies.

What is Business Model Hacking?

Business Model Hacking is an practical & strong method to design new business models or strenghten excisting ones. Instead reinventing the wheel, this method encourages entrepreneurs to draw from a rich repository of over 200 business model hacks. These patterns and strategies have been successfully employed by a multitude of companies, providing a roadmap to replicate their success. The method contains numerous inspiring examples and can be easily combined with popular innovation tools such as the Business Model Canvas.

Why use Business Model Hacks?

Here are 3 reasons why you should use Business Model Hacking:

1. 90% of past successful business model innovations were recombinations.

Research from St. Gallen University shows that 90% of successful business model innovations over the past 50 years were not groundbreaking inventions but clever recombinations of existing ideas. This powerful approach, known as recombinant innovation or “Business Model Hacking,” provides a proven design methodology to uncover surprising new options.

2. Practical and efficiënt

Creating a business model from scratch can be slow and uncertain. By leveraging business model hacks, entrepreneurs can quickly generate a higher volume of high-quality business model ideas.

3. Inspiring and educational

Business Model Hacking is not only effective but also engaging. Real-world case studies demonstrate how successful companies have used these hacks, offering inspiration and valuable insights into creating winning business models.

Examples

To clarify what business model hacks are, a few well-known examples:

Example 1: Blitzscaling

Blitzscaling is a strategy focused on rapidly scaling a business to achieve significant growth, often prioritizing speed over efficiency. This approach is commonly used by technology startups that aim to dominate a market quickly, even if it means incurring significant losses in the short term. For example, companies like Uber and Airbnb utilized blitzscaling by aggressively expanding into new cities and markets, often with little regard for immediate profitability. This rapid expansion helped them capture large market shares and establish themselves as leaders in their respective industries.

Innovation questions:

• Is growing fast a critical strategy to become and stay successful?
• Can a sustainable competitive advantage be achieved if a critical size in the market is reached?
• Can your company attract enough resources to finance the extreme growth?
• Are you willing to bear the risks of following this strategy?
• What is the impact on your company if a competitor manages to scale up quickly?

Example 2: Direct selling

Direct selling involves bypassing traditional distribution channels to sell products or services directly to customers. This method shortens the supply chain and often leads to better profit margins. For instance, companies like Tesla use direct sales through their own stores and website, rather than relying on third-party dealerships. This approach allows for a more personalized customer experience and greater control over branding and pricing.

Innovation questions:

• What does the business column look like?
• What value do the parties between your company and the end consumer add?
• What is the balance of power between your company and brokers?
• What resources are needed to take control of the entire sales force yourself?
• Is your company able to reach customers well?

Example 3: Buying club

A buying club is a collective purchasing model where a group of consumers comes together to buy products in bulk at discounted prices. An example is Costco, where members pay an annual fee to access lower prices on a wide range of products. By leveraging the collective buying power of its members, Costco can negotiate better deals and pass those savings on to its customers.

Innovation questions:

• For which products and services are attractive for ‘individual buyers’, you can organize a buying club?
• How large is the group of interested parties?
• At what number are the scale benefits large enough to attract individual customers with competitive prices and to be left with an acceptable margin?
• Is your company able to attract a large group of buyers?
• Can it collaborate with other parties in the market to gather enough buyers?

Example 4: Revive a legacy

Reviving a legacy involves bringing new life to an old product or brand. For instance, the reboot of classic video games or the reintroduction of vintage fashion items are examples of this strategy. A notable example is the re-release of the Polaroid instant cameras, which combines retro charm with modern technology to appeal to both nostalgic customers and new audiences.

Innovation questions:

• Which brands with a nostalgic value does your company have in its portfolio and how can they be put back on the market?
• What lost brand names outside your company might be interesting to revive?
• What risks are associated with the brand names?
• What can you learn from best practices?

Example 5: Cash machine

The cash machine model focuses on generating cash flow before delivering a product or service. This can be seen in pre-order campaigns or crowdfunding platforms like Kickstarter, where customers pay upfront for a product that will be delivered at a later date. This approach helps businesses secure necessary funds for production and reduces financial risk.

Innovation questions:

• What is the latest payment date to your suppliers?
• What are the consequences of paying late?
• Can you negotiate new, better conditions with suppliers?
• How can you make customers pay faster?
• Can the finishing of products and services be postponed until they are paid?

Are you ready to hack your business model?

I hope this article has inspired and convinced you to stop ‘’trying to reinvent the wheel’’ when it comes to designing new business models. Research which business model hacks there are and get new ideas for your business model.

Bio

Robbert Fransen

Passionate innovator & author of the book Business Model Hacking.  Always exploring how things can be done differently and better.