Conclusion

In this thesis we have tried to outline and explain how a company can focus their attention on changing and emerging conditions in the innovative landscape of technologies, relevant to company’s business value context, and what the consequence to the business model can be of adopting relevant innovations. This thesis is based on three assumptions;

 According to Kurzweil (2001) Technological and innovative progress and evolution happens at an increasingly faster pace. This fast pace creates an unstable environment for firms competing in the ICT sector where they are to respond to these changes quicker than ever before if they are to stay competitive.

 Business models scholar agree that business models are an essential part of every business since it describes and visualizes how a business creates, captures and deliver value. Yet many entrepreneurial companies often neglect to formulate and validate a business model.

 Responding to uncertainty, competition and rapid changes in the technological and innovative landscape through innovation adoption can have an impact on the company’s business model.

Business model are not static entities and should not be treated as such, and through innovation adoption a company can innovate their business models and respond to changes. Innovating a business model through innovation adoption will impact the types of innovation a company should focus on, since their business value context might shift.

The primary objective of this thesis is to examine the results of innovation adoption as a mean for innovating a firm’s business model, through a structured approach. Our case company, Qwiki, had not formulated nor thought about their business model which leaded us to our first research question:

How can Qwiki’s business model be described and what does their current model look like?

The literature on business models are not in consensus, many different scholars and theorists propose different definitions, taxonomies and, components. Through an extensive literature review Osterwalder (2004) proposed a business model ontology. Based on which this ontology Osterwalder & Pigneur (2010) developed the “Business Model Generation” book with the purpose to provide a hands-on guide to develop and/or redefine one’s business model, with tools and techniques for these purposes. Through

106 Osterwalder’s (2004) ontology and the tools and techniques from the business model generation we developed Qwiki’s business model on the basis three pillars; Products, Customer Interface, and Infrastructure Management. As we stated in the delimitation section, we have not addressed the pillar of Financial Viability due to sudden termination of our collaboration with Qwiki which limited our access to financial data.

Qwiki’s business model is rather simplistic due to their size and number of offering and they are moving towards a mobile application business model with their pursuit of the smart-device sector.

Mobile application business models are hard to sustain since 59% of all apps do not breakeven and 80%

of developers cannot sustain a viable business on apps alone (Arstechnica, 2012, A). Despite Qwiki’s simplistic business model there are several areas noteworthy to highlight;

 At the core of Qwiki’s business model is their value proposition of the “information experience”. Qwiki turns dull information and content into an interactive and very appealing experience called a qwiki. With the introducing of their two latest products (one which is discontinued) users could themselves create their own personal qwikies with content of their desire.

 Qwiki has managed to generate a lot of hype and attention to themselves and their products as a key activity, by engaging in important key partners with larges and noteworthy players such as Microsoft Bing and ABC News.

 Wining the TechCrunch Disrupt Award gave Qwiki momentum which fostered an increasing growing interest by tech-reporters, which has been nourished by their key resource of the PR and promotion team. This team has also been good at engaging with their users through email, social media sites, and early invites to product tests.

A visual representation of Qwiki’s business model is presented in Figure 12 page 75. Establishing Qwiki’s business model was a prerequisite in order to better understand Qwiki as a business and their environment, and a necessity for analyzing the context of innovation adoption relevancy.

The literature on innovation adoption is primarily focused on the how-to evaluate, prioritize, manage and implement innovations e.g. as the Diffusion of Innovation theory or the Stage/Phase-Gate (primarily used for NPD, but it can be altered for innovation adoption as well) process. They do not offer any suggestions as to the what-to search for and track. As described in the thesis, innovations and technological advancements occur at an increasing fast pace. Companies do not have the resources to rank and evaluate all the different innovations, and must carefully select which innovations are relevant to them in regards to their business value context. Diffusion of Innovation and Stage/Phase-Gate fail to

107 help companies set a scope or business value context from which innovations are tracked and ranked, which is the primary focus of Fenn & Raskino (2008) STREET process. The STREET process is based on a decade of observations and studies of innovation hype cycles and businesses successes and failures in adopting innovations. With Qwiki’s business model analyzed and formulated we have applied the STREET process in order to answer our second research question:

How can Qwiki narrow their focus and search for adopting innovations based on their business value context, and which relevant innovation for Qwiki to adopt can be identified?

Natural filters for focusing on innovation adoption are present to every company through a combination of ongoing challenges the needs to be solved and metrics the needs improvement in the firm. However looking outside clearly defined processes and functions and focusing on innovation adoption to improve the company, enable growth, improve products and value etc. becomes unclear.

Fenn & Raskino (2008) propose looking into the business value context as means for companies to narrow their focus and attention on what types of innovations are potentially valuable to the firm, through three focus method. Irrelevant and non-valuable innovations are thus filtering out. We have addressed two focus method; corporate core and current business objective and initiatives to determine Qwiki’s business value context. The last focus method – speculation and aspirations – was not addressed due to the fact that Qwiki’s enterprise personality profile – which determines the company’s risk profile – is that of a type B organization.

Type A organizations employs high risks to pursue high rewards by investing extensively in R&D initiatives and are considered very aggressive in innovation adoption and adopts first-mover strategies.

Qwiki does not have the resources to be a type A organization and they are not eager to pursue first-mover strategies as they demonstrated in the lack of interest in the “Instagram for video”-race. Qwiki cannot be classified as a type C organization defined as industry laggards when it comes to adopting innovations, unwilling to take any risks. They took a huge risk in abandoning their roots by discontinuing their QR iPad and QC solutions and focusing on the QM solution.

The speculation and aspiration focus method is a long-term planning initiative that target speculative future opportunities and scenarios, and relates to type A organizations. Qwiki simply does not have the resources to focus on the long-term since they have been funded for the past 2-3 years solely by venture capital and not produced any revenues. Qwiki’s current business objective and initiative is to focus on contemporary ubiquitous devices as their targeted segments. Qwiki’s corporate core was analyzed through four different approaches to the heart of Qwiki’s values and their value proposition: value discipline, core competent, value curve, and persistent business needs.

108 1. Qwiki’s value discipline approach in the marketplace was determined to be within the discipline of product leadership due to their innovative and highly differentiated approach to information and content consumption, creation, and distribution.

2. Qwiki’s core competence is the way they excel at understanding, packaging, and compiling information and content into an interactive and seamless experience.

3. With Qwiki’s objective to focus on contemporary ubiquitous devices and the QM solution we analyzed Qwiki’s value curve for the QM value proposition in the smart-device app market setting based on an analysis of the 46 most popular photo and video apps. Six elements of performance were identified and Qwiki could differentiate by outperforming competitor in the neglected areas of service and accessibility.

4. Three persistent business needs were identified through an unstructured interview with Qwiki’s COO and CEO;

a. To enhance the way people experience, consume, create, access, and distribute information and content, and spread the “Qwiki Love”.

b. To increase the targeted markets, devices, and platforms.

c. To generate revenue and profit and not being dependent on venture capital.

Based on the analysis of Qwiki’s corporate core, current business objective and initiative, and enterprise personality profile we established Qwiki’s business value context. From this context Qwiki can narrow their focus and search for adopting innovations that: enhances their products to sustain a competitive edge, contributes to their core competence, improves the service and accessibility of the QM solution, generate revenue, and increase their targeted segments.

Within the parameters of our analysis of Qwiki’s business value context we identified eight different innovation candidates that could be relevant for Qwiki to adopt. Due to limitations in the number of pages this thesis may consist of we have only processed the four most relevant candidates in regards to their potential impact on Qwiki’s business model. Two innovations were combined due to their similarities and interdependences. The three most relevant innovation candidates identified that Qwiki can adopt are;

 Cloud solution in terms of storage as a service (STaaS) and software as a service (SaaS).

 Tablet industry and app programming language.

 Activity streams.

With these three candidates (tablet industry and app programming language combined as one) we could answer our third and last research question;

109 What are the potential impacts these innovations pose to Qwiki’s business model, should they adopt the identified innovations?

The first candidate, the cloud solution, covers two different levels of abstractness that Qwiki can pursue. Adopting a STaaS innovation would have very low impact on their business model and only affect value proposition, where users would be given value by being able to store their personalized qwikies in the cloud. This feature would relate to the accessibility element of performance. Adopting a SaaS innovation for the QM product would have a large effect on the Qwiki’s business model. The targeted customer segments would not be limited to iPhone users, but anyone with a device capable of Internet browsing, which would also have a very positive effect on the value proposition. Qwiki would lose Apple as a channel for acquiring the product, and not have to rely on them as a key partner. Instead a cloud provider would have to fill the spot both as a key partner and as a channel. Qwiki’s would have to replace or train their current iOS developers and designer which is a key resource for Qwiki.

Outsourcing the proprietary software which is a key resource for Qwiki to a cloud provider could pose different risks since control and security of the software would be forfeit to the third party vendor.

Adding an API to the SaaS innovation would add a customer relationship of co-creation, and opening up the proprietary software for corporations would introduce a new targeted customer segment from which a potential source of revenue lies. This innovation relates to multiple aspects of Qwiki’s business value context e.g. enhance the product, increase targeted customers, generate revenue, and improve accessibility of the QM.

The second innovation candidate – tablet industry and app programming language – would only have a minor impact on Qwiki’s business model by expanding their targeted customer segments to include any smart-device across multiple platforms. Qwiki’s key resources of skilled developers would have to be either trained in programming for devices on different platforms or new personnel would have to be acquired.

The third innovation candidate, activity streams, would be completely transformational for Qwiki’s business model. Qwiki’s business model would transform from a mobile application type into a social media platform business model where users could engage and interact with each other, share qwikies within related communities through public and private channels or pages similar to that of Facebook and Twitter. This would introduce a new customer relationship of user communities, and a new value proposition of social network and interaction with this innovation. By adopting this innovation Qwiki could establish a very strategic channel where they can each every user in the app e.g. by having all users subscribing to this in-app channel. But the largest effect on Qwiki’s business model this innovation would introduce is their value configuration of activities. Qwiki’s current value

110 configuration is the classical value chain that sequentially transforms input to output in a highly standardized and structured manner. Adopting the activity streams innovation could be the linkage between QM users making their product into a platform solution and transforming the value configuration into a value network activity configuration.