How business model innovation changes the game

Are your customers buying your stuff the regular way, by the hour or by volume? If your offering has a limited added value that might be a good way of charging based on cost. Charging based on value is of course a much better model for everyone, both you and your customers. This is sometimes called business model innovation when you switch from charging based on cost to charging on value. In a recent IBM CEO study more than 80% said business model innovation was a top priority during 2009.

As you can imagine its easier said than done. Not many companies changes their business model until they're forced by competition or customers. Look at the music industry and torrents ...

Today a small company in Gothenburg, Sweden, won the second place in Venture Cup 2009 called AdFreight. Their idea is simple yet changes the game for internet shopping. They basically sells the space on the parcels to advertizers. When you receive the parcel there is custom ads printed automatically on it. Now freight can be free simplifying both internet shoping and enabling efficient advertising. Not just by getting customer cycles, but more the goodwill you get when paying for the freight. A completely new experience where you as a customer gets something of real value when getting exposed to advertisements.

So what is new in this you might ask? Well, it is a combination of a new advertising model where a third party picks up the tab and for internet based businesses to sell the freight space. For advertisers it enables them to get undisturbed time with the customer where he or she is devoted to your message while opening the expected package.

A true win-win building goodwill for advertisers and enabling internet shoping to truly differenciate itself by adding an additional value that in-store shoping will have trouble copying.