From Doctoral Student and Business Model Canvas to Platform Entrepreneur with Strategyzer (including detours)

I decided to write this post to answer four questions. These all relate to inquiries I get by email or Linkedin and I simply can’t answer them all personally. Firstly, I often get asked how we turned Business Model Generation into a book that sold millions of copies in 40 languages. Secondly, many doctoral students ask how I went from academic to entrepreneur. Thirdly, people ask me what it takes to become a successful scale-up CEO.?

I structured this post into the three phases of my career, even though there is no clean cut between the phases. It doesn't include all the activities and start-ups I was involved in, just those that marked me most in the run-up to Strategyzer 's scaling.

My three career phases are...

1. Thinker with an entrepreneurial flair???
2. The creator ???
3. The scale-up CEO with a dual mindset ??

1) Thinker with an entrepreneurial flair: from PhD to Business Model Generation selling millions of copies ??????

Long story short: I always liked to understand stuff. My studies in political science were about understanding society and institutions. My masters in management information systems was about understanding how information technology could improve business institutions. My PhD was about understanding how one might bring Computer Aided Design (CAD) from architecture to business to help startup entrepreneurs design their business models.?

This first phase happened with the mentorship of long-time co-author and friend Yves Pigneur . It turned out to become the launchpad of my business career. What I described in my PhD The Business Model Ontology (over 5k citations) led to the Business Model Canvas and ultimately to the platform that my company Strategyzer is now building.?

The real start of my business career was the success of our first book, Business Model Generation . I remember when Yves and I had lunch at the main restaurant of the University of Lausanne. We wrote down on a napkin that we’d consider selling 50,000 copies of our book as a success. Little did we know, that would be a crazy underestimation ??

Here are the four reasons why I believe Business Model Generation became a success:

1.1 Business Model Innovation: co-creation, new value proposition, direct-to-consumer, crowdfunding.?

I refused to follow the traditional publishing playbook of writing 300+ pages around a great concept and selling it in bookstores. I convinced Yves that we couldn’t write a book about business model innovation without an innovative business model. You gotta walk the talk. Hence we set out to do things differently. Here’s the skeleton of what we did (and if you want the Canvases we explored, you’ll find them in Business Model Generation):

1. Co-Creation: Anybody who wanted to could join our book project. We would share raw, undesigned book chunks with people on a regular basis. They could give us feedback and we’d comment on each and every input. We reserved the right what we’d take or leave. It definitely made our work strong to get it scrutinized by practitioners.?
2. Direct-to-Consumer: We sold the first two prints directly to consumers, much before self-publishing was a thing. After some detours we leveraged Amazon’s infrastructure to succeed. Once we’ve proven it could work we sold the publishing rights to Wiley.?
3. Innovation: Because we sold directly to consumers publishers couldn’t hold us back from innovating. We designed a landscape visual book in four colors. A publisher would have never allowed us to do so because it’s too expensive and doesn’t fit into bookshelves. We’ve proven the concept and created a new category of visual landscape business books in the process ??.
4. Crowdfunding: Visual books are expensive to make and print and I had no money. We used crowdfunding to finance design & print. People first paid $25.- to be part of the process. The last ones paid $250.- to have their name in the book. I’m still grateful for the 470 who participated before crowdfunding was a thing ????!?

1.2 Design and User Experience (UX): breaking with conventions - what could be??

Key to Business Model Generation’s success would be an outstanding design and a great user experience (UX) of the book. We achieved that thanks to a collaboration with extra-ordinary designer Alan Smith who would later become co-founder of The Business Model Foundry AG (later Strategyzer). Visual business books were extremely rare at the time, so we got inspiration from architecture, design, and art books. Now there are a ton of visual (landscape format) books and most of them still get the design wrong. Here is how we approached design:

1. Design for usability not “lipstick on the pig”: Many visual books use design to make them look pretty. We didn’t design for aesthetics first. That was just a spillover effect. We used design and visuals to convey our ideas more clearly. Every design and visual aspect would satisfy a functional need.?
2. The Laws of simplicity: We used design to follow John Maeda 's Laws of Simplicity . We cut back on anything that wasn’t necessary. Many business books are based on a simple concept described over hundreds of pages. Yves & I don’t have the patience for those kinds of books, so we created a different one.?
3. Visuals not words: Most importantly, we used design and images to express things visually that should not be expressed with words. A lot of business concepts and processes are inherently visual. Hence, Business Model Generation is a collection of concepts illustrated with words.?
4. Spreads not pages: Last but not least, we didn’t “write” our first book in the traditional sense. We thought about ideas and concepts that could be described on a page or double-page (spreads) and then put words around them. As a consequence, you’ll never find an idea or sentence that goes from one spread to another.?

1.3 Testing: challenge your ideas, iterate, co-create, build community

I believe a big part of our success has always been to believe our ideas as if we were right, but test them as if we were wrong. It’s been part of our DNA forever and has become explicit once we met Steve Blank , who became a good friend and mentor.?

1. Testing concepts: The desire and necessity of testing goes back to my PhD days. When you write a doctoral thesis you can’t just make shit up and publish it. You’re supposed to test stuff so it is replicable. In natural science that is obvious. In social science less so. Luckily in my domain, information systems, there was a methodological trend at the time called “design science ”. You’d come up with a concept and test its applicability rigorously. That’s exactly what I did with our Business Model Ontology. That’s one of the reasons why it stood the test of time.?
2. Co-create: As described above, we put our book content out there for anybody to scrutinize. That makes you vulnerable, but ultimately it makes your stuff stronger. You don’t need to integrate everything people ask you to. Gosh, no. You just need a good answer to everything they want you to do.?
3. Community: Gathering innovators and learning from them helped us but also connected everybody as a community. Also, I’m still convinced that our 470 co-creators who have their name in Business Model Generation kickstarted our success. They proudly “sold” the book to their friends and contacts because of their names in it.?

2) The creator phase ?????????

We launched Strategyzer as a group of three co-founders with the intention to create a software business. Back then it was called The Business Model Foundry AG. It wasn’t my first entrepreneurial gig, but back then I definitely wasn’t equipped to build a Silicon Valley style scale-up. Worse, I didn’t really understand the difference between a creator (or lifestyle business) and scale-up entrepreneur. There is nothing wrong with being a creator rather than a scaler. However, you better know the difference!?

My co-founders and I aspired to be scalers, but behaved like creators. I clearly remember Yves pointing out this schizophrenic behaviour diplomatically in his own style at our Business Design Summit in Berlin in 2013. He wondered if there was a gap between our ambition and our resources ??.

In this section I want to describe a couple of things we got right and a couple of things we got wrong regarding business building.?

2.1 Pros

1. Multi-million dollar products: At Strategyzer we built several multi-million dollar products. This included an iPad app, Web app, e-learning courses, workshops, books (licenses and sold by Wiley), and an advisory business to large multinational companies. We were actually pretty good at getting to single digit millions for almost all of our products.?
2. Brand: In 2014 we pivoted from “Business Model Foundry” to “Strategyzer”. There were two reasons. Firstly, our ambitions were larger than business models and we wanted to go beyond the Business Model Canvas. Secondly, I wanted the company to rely on the Strategyzer brand, not me. We created the name and a logo and put it on every book and tool. Our brand gained strength rapidly, given that our books and tools are used by millions. Today, all our clients are inbound and few ask for me. I’m a full-time CEO, not a consultant. I advise only a few top leadership teams and rarely get involved in projects.?
3. Domain-matter expertise: We’ve been in innovation for over a decade and I’ve worked on the topic for a quarter of a century (that’s how old I am ). We’re better than anybody. That’s not because we’re smarter, it’s because we’ve worked on hundreds of innovation projects and learned from thousands of mistakes. It’s what we do.?
4. Tech knowledge: Over the years we’ve done so many things wrong with technology that we now know how to leverage technology to do things right. Without the formative years of my creator phase, I wouldn't understand technology and product management like I do today. We/I made all the mistakes you can make. I definitely won’t make those again.?

2.2 Cons

1. Lack of focus: The biggest mistake we made as a company in this phase was a lack of focus. As the majority shareholder I own this mistake big time. We wrote bestsellers when we should have focused on scaling our business. We created new products without focusing on which ones to scale. We prematurely pivoted too often when we didn’t find scalability immediately. We had way too many products and were actually running several business models under one roof. Getting each of them to a couple of million in revenues actually prevented us from killing the non scalable ones. Personally, I focused on our consulting business and took my eye off the platform business. I don’t blame anybody. I own it.?
2. Under-invest: Our most criminal offense as a company was to under-resource our most ambitious projects in the most critical phases. We were pretty good at understanding customer needs and creating value propositions, but failed at scalable go-to-market fit. Because of our books & tools we had a strong brand that brought us customers. That led us to single-digit million revenues per product pretty quickly. Life was almost too easy and we didn’t realize we needed to find a real go-to-market strategy that could scale.?We underinvested in this most critical last phase because we thought if you build it they'll come (in masses). Now I understand the phases of entrepreneurship better!
3. Lack of scaling experience and pressure: Because of the success of Business Model Generation and our products we didn’t need to take on funding. I subsidized our business personally with running workshops that brought in millions. That also meant we had no pressure to set up a board of directors bringing in an outside view. Combined with our ignorance and maybe even slight arrogance that prevented us from getting to the next level. My mentor Steve Blank told me a lot of things, but back then I didn’t really hear/understand him. Now I do. Being outside of an entrepreneurial ecosystem like the Valley is a huge disadvantage. Today I’d talk to a lot more scaling founders to learn.?

3) The scale-up CEO with a dual mindset ??????

I vividly remember the moment I made the decision to shift from a creator to a scaler. It was August 2019 when I drove my breakthrough coach Shani Ospina to the airport after an offsite in Italy with the Strategyzer team. She said “Alex, you guys need to grow up”. She was right. It took some time until I actually pulled it off (some of us Swiss are slow ??), but that’s when I woke up.?

Here are the big shifts I embarked on as a CEO:

1. Focus, focus, focus: I stopped writing books and put all my energy into shifting our global consulting business towards a true platform business with recurring revenues. In 2020 I also decided we would deliver all our consulting projects on our own platform. That put our platform at the center of everything, because you just can’t screw up when some of the world’s largest brands are your user. Gradually we shut down even extremely profitable products if they didn’t contribute to the shift towards the platform. Building one big thing is hard enough. You can’t afford a single distraction of resources and mindset.?
2. From dreamer to pragmatic resource allocator: Before the big shift we used to dream big, but not admit that big dreams require the right resource allocation. Channeling all our resources to one goal wasn’t enough. We also brought on our first investor with our alliance partner Emergn. It was our first investor ever, after I bought back shares from my co-founders. This was a game changer as Emergn brought on developer and designer capacity and product management knowledge. We made a stratospheric jump thanks to our alliance partner. Now we are raising a bridge round from a convertible note to scale our commercial expansion and go-to-market strategy. Contact us if you’re interested (min. ticket $100k for this $1.5M round).?
3. It’s supposed to be hard: I read The Hard Thing About Hard Things by Ben Horowitz without really understanding what he meant. Now I know. Making a couple of million in revenue is pretty feasible, while scaling a business is insanely hard. If it wasn’t hard anybody would do it. Don’t get me wrong this is not a value judgment. Scaling is not a respectable goal per se, but if you want to have impact scaling is often a prerequisite. At Strategyzer our purpose is to unlock millions of people’s potential to create value for themselves, their organizations, and society. You can’t do that without scaling.?

In one short paragraph from the Hard Thing about Hard Things, Ben Horowitz describes the life of a scale-up entrepreneur:?

“The hard thing isn’t setting a big, hairy, audacious goal. The hard thing is laying people off when you miss the big goal. The hard thing isn’t hiring great people. The hard thing is when those “great people” develop a sense of entitlement and start demanding unreasonable things. The hard thing isn’t setting up an organizational chart. The hard thing is getting people to communicate within the organization that you just designed. The hard thing isn’t dreaming big. The hard thing is waking up in the middle of the night in a cold sweat when the dream turns into a nightmare.”

Today I’m excited to embark on this scaling journey, because I’m more mature as a CEO than ever before (still tons to learn of course). Strategyzer has never been as well positioned with as much evidence for the future path. We’re now also pragmatically taking on one scaling challenge after the other. It's just part of the game.

Here’s why I’m so confident:

1. Customers want our scalable value proposition: With innovation programs on our platform , we finally unearthed a scalable value proposition and business model. We know our two main ideal customer profiles (large corporations and SMEs) and we know how to convert them to buyers. We now need to unearth the go-to-market fit that gets us to $100M in ARR in the coming years.?
2. The best team we've ever had: Our team has never been as strong thanks also to some tough HR decisions. Yes, we lack sufficient scaling experience, but that’s normal in the phase we’re in. We’re expanding and strengthening our scaling experience as fast as resources permit.?
3. Alignment: We learned as a team how to run a business (exploit), while getting everybody to focus on the shift (explore). We also finally dedicated sufficient resources to making this shift happen. It’s only a question of time that the new business takes over the “old” one.?Read more about this difficult shift to scalability here .

Last but not least I want to thank all our fans, clients, and users for standing by us. There were phases during which I had a hard time standing behind our tech products. That’s over. Our product team is world class and we’re on track towards creating an entirely new category: a platform to design transformation programs (beyond innovation). More about that in another post on another day ;-)?

... oh, and if you happen to have $100k lying around (minimum ticket) and want to invest in a convertible note at Strategyzer: Just get in touch privately on Linkedin. It's your opportunity to be part of another exciting category-creating growth story that's 100x bigger than Business Model Generation and the Business Model Canvas. We created a category of business tools (canvases), then a category of business books (landscape format visual books), and now we're creating a category of software tools and programs. Join us to be part of this new exciting journey!