Experiment with your business model. What’s the worst that can happen?

business model innovation

When it comes to innovation, experimentation is expected except when it comes to your core business model.  This is one of those sacred cows that shouldn’t be touched.  The results from a well-designed experiment of business model innovation can be a real eye opener.

Take Jet Blue as an example.  Last July, they announced a promotion called BluePass that would allow travellers unlimited flights in a three-month span for one fixed price. The three-month promotional period runs from August 22nd to November 22nd. Travellers have three plans to choose from:

  • Three months of unlimited travel between JetBlue's Boston hub and any JetBlue city, all for $1,999.
  • Three months of unlimited travel between JetBlue's Boston hub and any of 13 selected JetBlue cities (none west of Chicago), this time for $1,499.
  • Three months of unlimited travel between JetBlue's Long Beach, California hub and any of nine selected JetBlue cities (none east of Chicago) for $1,299.

You may be wondering who would go for such a pricing option.  Based on the advertising and promotion put around the offer, it was clearly aimed at the frequent business traveler.  What caught my attention was Jet Blue’s willingness to perform a business model experiment this extreme.  They weren’t looking to tweak the pricing model. Instead, they framed an experiment that tested the boundaries.

At the same time, they weren’t being reckless.  They limited their downside risk by restricting the total number of passes they sold under the promotion.

Will this become a standard offering from Jet Blue? We will have to wait and see.  My hope is that it wakes up other organizations to get out of the rut of the expected business model and go experiment.

If you don’t, someone else will and the result is that you will be watching them take over your industry.

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3 thoughts on “Experiment with your business model. What’s the worst that can happen?

  1. Interesting post. What about HP? The worst that can happen when changing a business model? A company once known for innovation and quality becomes a company known for tons of mistakes, no innovation, and shoddy products. What used to be a brand people thought fondly of is now a brand people don’t want to buy.
    Experimenting is great, but keep things in the sandbox until you know you have a solid product that you don’t have to do a fire sale to get rid of. Or, don’t put the product out in the first place. If it’s not life-altering, then keep it in the R&D room with all the other “almost theres”.
    Unless anyone can beat Apple to the punch, or outdo them- notice Apple isn’t always first but they watch and then do something that becomes life-altering; then don’t try and copy their business model, or copy their products, or their services. No one so far has beat Apple at their own game. Tablets? Nope. Cloud Services? Nope. Content dichotomy? Nope. App Store? Nope. Music Players? Nope. Smart Phones? Nope.
    Everyone who has tried to do what Apple does is an “almost there” or horrible failure.

    Good thing Apple never got in the printer business.

  2. One last thing- Sony is working on the “new” television. I think when Steve Jobs said he finally cracked what a television should be, anything anyone else attempts to do (Google TV anyone?) will be an “almost there”. Or, maybe he just said that to scare the daylights out of all the TV makers….

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