DREIESKIVA​|Roald Kvam

In today’s fast-moving and often unpredictable markets, having a great product or service is no longer enough. Businesses that thrive are those that innovate not just what they offer—but how they offer it. This is where business model innovation becomes a strategic superpower.

Unlike traditional innovation, which often focuses on new technologies or features, business model innovation is about rethinking how value is created, delivered, and captured. It allows organizations—startups and incumbents alike—to find new ways to serve customers, differentiate from competitors, and build long-term resilience.

In this article, we’ll explore what business model innovation is, why it matters, and how to use tools like the Business Model Canvas to create models that are scalable, sustainable, and truly competitive.

What is a Business Model?

A business model answers three core questions:

• Who is your customer?
• What value do you deliver to them?
• How do you make money doing it?

It’s the system of how your business operates: the channels you use, the relationships you build, the activities and resources you depend on, the costs you incur, and the revenue streams you generate.

Business Model Innovation defined

Business model innovation is the deliberate design or re-design of this system to better deliver value, reach new markets, reduce costs, or gain competitive advantage.

It’s not just for startups. Established companies like Netflix, IKEA, Amazon, and Adobe have transformed their industries through innovative business models—whether by shifting from products to subscriptions, from ownership to access, or from B2C to B2B.

Why it matters more than ever

1. Rapid market changes require agility
   Customer needs, technologies, and competitors are constantly evolving. Static business models quickly become obsolete.
2. Competitive differentiation
   When products and services are easy to copy, a unique business model can become your moat.
3. Path to scalability
   A well-designed business model makes it easier to grow without proportionally increasing costs.
4. Resilience and sustainability
   Adapting your model can help weather crises, diversify revenue streams, and reduce environmental or operational risks.

The Business Model Canvas: A strategic tool for innovation

Created by Alexander Osterwalder, the Business Model Canvas (BMC) is a one-page framework that visualizes how a business creates, delivers, and captures value. It consists of nine key building blocks:

1. Customer Segments
   Who are your most important customers? What are their needs, behaviors, and pain points?
2. Value Propositions
   What value do you deliver to each segment? What problems do you solve or gains do you create?
3. Channels
   Through which channels do you reach and deliver value to your customers?
4. Customer Relationships
   What kind of relationship do your customers expect? How do you acquire, retain, and grow them?
5. Revenue Streams
   How does your business earn revenue from each customer segment?
6. Key Resources
   What critical assets (physical, intellectual, human, financial) does your model rely on?
7. Key Activities
   What are the essential things you must do to deliver your value proposition?
8. Key Partnerships
   Who are your suppliers, allies, or distributors? What can others do more efficiently than you?
9. Cost Structure
   What are your biggest costs? What drives them?

Using the canvas to innovate

Business model innovation often involves changing one or more of the nine elements in new ways. Here are a few examples:

• Value Proposition innovation: Tesla didn’t invent the electric car—but it redefined what one could be.
• Revenue Model innovation: Adobe moved from one-time software sales to a cloud-based subscription, increasing predictability and customer lifetime value.
• Channel innovation: Warby Parker brought glasses direct-to-consumer, bypassing traditional retailers.
• Customer Segment innovation: Airbnb tapped into hosts as a new value-creating segment, turning ordinary people into micro-entrepreneurs.

How to start innovating your Business Model

1. Map your current model
   Use the BMC to visualize your existing business model. This creates a shared language and clear starting point.
2. Identify pressure points or opportunities
   Where are your current bottlenecks? Where are customer needs changing? What do competitors do differently?
3. Generate and test variations
   Brainstorm alternative configurations. What if your value proposition were different? What if you changed how you charged or delivered?
4. Prototype and validate
   Before making major changes, test your assumptions through customer interviews, landing pages, pricing experiments, or minimum viable products.
5. Align your organization
   Business model changes often affect teams, incentives, and operations. Communicate clearly and ensure alignment across functions.
6. Iterate continuously
   Treat your business model as a living system. Markets evolve. So should you.

Common innovation patterns

Certain business model shifts have emerged as common innovation strategies:

• From ownership to access (e.g. Spotify, Zipcar)
• From product to platform (e.g. Amazon Marketplace, Uber)
• From one-time sales to subscriptions (e.g. Netflix, Salesforce)
• From B2C to B2B (e.g. OpenAI’s API shift)
• From vertical integration to ecosystem (e.g. Apple’s App Store)

These patterns aren’t templates—but they’re useful inspiration.

Challenges to watch out for

• Internal resistance: Change often threatens existing structures or mindsets.
• Overcomplication: Too many innovations at once can confuse customers or dilute focus.
• Timing mismatch: Innovative models may require time to mature or may not match current customer readiness.

— — —

Business Model Innovation is not just about staying competitive — it’s about staying relevant. It’s the art of designing a system that consistently creates and captures value, even as your market shifts.

By using frameworks like the Business Model Canvas, organizations can make innovation tangible, strategic, and testable — not just creative guesswork.

The future belongs to those who can not only build great products, but design great systems around them. In the end, it’s not just what you sell — it’s how you sell, to whom, and why.

That’s the power of business model innovation.