How To Do A Business Model – Part 2 – Lord of the Rings Meets Business Analysis
In the last post, we took a look at an important business concept that is a mystery to entrepreneurs and business students young and old: The BUSINESS MODEL (an important underpinning of the business plan). In this post, I discuss a creative idea for looking a business models which you can apply in your daily life or the classroom.
Lord of the Rings example. What does the movie trilogy Lord of the Rings (LoTR) have to do with business models? In fact, from a business standpoint, the movie was filmed in quite an ingenious way.
Lord of the Rings Exercise / Non Traditional Business Model Exercise
A. 12 box grid, 2 columns of 6, on a piece of paper. Students fill out the grid as follows: Left – place the business model topic and any crib notes. On the right part, fill in with information about the business/movie/or other venture.
The grid should follow this structure, interpreted – in layperson’s terms – from my favorite writing on business models ever: Michael Morris paper.
1. How we create value – what you do/make and put out there in society
2. For whom – target customer population
3. Internal competitive advantage – operational efficiencies or processes that make you better
4. External competitive advantage – how consumers/stakeholders outside the company know you’re better
5. Economics – how you make money
6. Exit strategy – what is your exit from this business, is there one?
B. Mon-businessy article (e.g., Lord of the Rings write up I use in my class).
Discussion: After students read the article, and fill out the different parts of the grid, go through the boxes one-by-one and discuss. With the Lord of the Rings example, I hand out a summary about the filming, the tax advantages they gained filming in New Zealand, how they filmed it all at once, how they locked in the stars for all three in doing that, the rights to the book, the cult following, and some other data. Then, using information we just know (being consumers) the students talk about how the movie makes money. Exit strategy is sometimes tough. For typical businesses, options are usually grow and sell, or hold and generate cash over time. This is severely over-simplified, but, a good intro to the concept of planning ahead for business growth or sale. When you read an article, hear about a business, think about six points and see if you can fill in a grid.
Tips: Look for the lightbulbs – When students realize they know more than they thought about business.
Inside knowledge: Mark Ordesky was one of the LOTR producers and knows about this exercise, and thinks it’s cool.
How to get started:
Have students read an article about a business (suggested sources include Inc or Entrepreneur online). See if they can pick out the 6 parts of the grid. If there is a missing part, have the students act as consultants and fill it in. What would they suggest if the business were their client?
Example 2: Sundance, Synthesizing Art and Business
What elements are clear and unclear for the business model boxes in the profile of Sprouter and Sundance? Act as a consultant, speculator, and historian to fill in the boxes not supported by the article.
The NFIB Young Entrepreneur Foundation is a 501(c)(3) organization promoting the importance of small business and free enterprise to the nation’s youth. More information is available at www.NFIB.com/YEF. The Foundation is associated with the National Federation of Independent Business; NFIB is the nation’s leading small business association, with offices in Washington, D.C. and all 50 state capitals.
Entrepreneur In The Classroom. The NFIB Young Entrepreneur Foundation Entrepreneur-in-the-Classroom (EITC) supplemental curriculum exposes students to entrepreneurship and the necessary steps to take an idea and turn it into a business. The free curriculum can be integrated into classes teaching a variety of subjects including music, art, fashion, business and many more. You must be registered to view the full Entrepreneur-in-the-Classroom curriculum.
Follow NFIB on Twitter
Follow blog author Kathy Korman Frey on Twitter