Erik’s expertise cuts-across the business innovation cycle, with a focus on three main main opportunity areas: venture innovation, market creation, and bottom of the pyramid.
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“Give me the freedom of a tight brief.” Many popular business model innovation approaches are about brainstorming things you can do. Effective venture innovation is about brainstorming what you should do. That requires first defining four key strategic fundamentals: 1) the operating unit’s transaction volume and intensity; 2) the operating unit’s steady-state customer base; 3) the “lever” consumer and activity set that will drive volumes; and 4) the degree and intensity of consumer touch required to drive product adoption.
EXPERTISE: • Ask the right question, not the big question, to set your strategy and frame the opportunity • Model your venture’s operating unit at-scale to ensure a clear and credible path to profitability • Map areas of customer lifestyle disruption to understand barriers to adoption
“Technology is easy to develop. Developing a new attitude, moving the culture, is the hard part.” Using “consumer education” and “social marketing” to drive demand for new products and functionalities is a losing game, as the high marketing costs can never be re-couped within a reasonable investment time frame. To profitably drive consumer learning of a new product routine, learning and behavior change strategies have to be integrated into the business model and offering.
EXPERTISE: • Use a Market Creation Mix to Kick-Start Consumer Sensemaking around Your Product • Leverage Seed Groups to Create an Initial Base of Demand at Pilot Launch
Bottom of the Pyramid
“The path to sustained corporate investment in BoP lies in generating returns competitive with alternative uses of capital.” The conventional wisdom that low-income consumer markets require low-margins and price points and high-volumes rarely holds in practice. Instead, companies inevitably discover that a high contribution per transaction is required for profitability. But driving down variable costs and pushing up price points requires a suite of strategies, including bundling products, using refillable format packaging, aggregating customers in groups, and layering in “knowledge-based” services that carry low variable costs
EXPERTISE • Re-frame BOP to resonate with core business operations. • Segment BOP market opportunities according to their investment profile • Boost margins and contribution per transaction to overcome higher operating costs and slower growth.
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