Almost every business model change moves along six dimensions: who you serve, what you sell, how you get paid, how you reach the customer, who you work with, and how costs behave. The companies that succeed typically move two or three of them, not all six.
Look at a large enough collection of business transformations, the successful ones and the others, and the same thing emerges: nearly all of them are about moving the business model along a few dimensions.
Not all dimensions. Usually two or three.
Here are the six. If you can name which ones apply to you, you have a direction rather than a list of ideas.
Shift 1: Who do you serve?
The movement runs either narrower or broader, and both can be right.
Narrower means becoming more valuable to fewer. A booking tool for all kinds of business becomes a booking tool for clinics, with the fields, integrations and wording clinics actually need. The price can go up, because the alternative fits less well.
Broader means becoming relevant to more. The same platform opens to every industry that works with appointments.
Most start narrow and grow broader. The interesting question is not what is typical but what solves your problem: is the margin squeezed because you sit too broadly to be anyone's obvious choice, or has growth stopped because the segment is used up?
Shift 2: What are you selling?
Moving from ownership to access, or the other way.
When Netflix started, it sold DVDs. Then it sold access to films. Same underlying need, entirely different product.
The reverse direction exists too and gets overlooked. A company selling an ongoing subscription may discover customers would rather pay to have a problem solved once and be done.
Try the test: what would customers say if you asked what they are buying? If the answer differs from what you think you sell, your shift is here.
Shift 3: How do you get paid?
From one-off to recurring, or to commission on a transaction.
This is the shift that changes the economics most, because it changes when money arrives relative to when the cost lands.
A printing business selling job by job can move to a fixed monthly agreement covering the customer's total need. Same work, but now staffing can be planned instead of reacted to.
The warning is the usual one: recurring payment without a reason to stay is just a worse one-off.
Shift 4: How do you reach the customer?
From direct to through others, or from physical to digital, in either direction.
An IT services firm can move from sitting on site forty hours a week to delivering through a portal with support on call. It does not change the expertise. It changes how many customers the same person can cover.
Be clear about what you give up. Selling through someone else's platform buys reach and costs you the customer relationship. Sometimes that trade is right. It just has to be a decision.
Shift 5: Who do you work with?
From doing everything yourself to being one node in a network, or to being the thing others build on.
An agency can move from producing copy, design and film in house to coordinating a network of specialists and being the point that holds it together. Fewer permanent staff, broader capacity, but also a new job: keeping quality consistent when the work is done by others.
In practice the shift is about where the boundary of your company sits, and that question rarely gets asked directly.
Shift 6: How do costs behave?
From fixed to variable, or the other way.
A manufacturer moving from its own factory to outsourced production trades a fixed cost for a variable one. The company becomes less rigid and survives a bad quarter better, but also gives up some control over quality and lead time.
The opposite shift is equally valid. If demand is predictable and the price of bought capacity has risen, owning again can be the right answer.
The big changes use two or three shifts
This is where most people go wrong. They look for the one right shift, and real transformations usually use several at once.
A newspaper business sold printed papers to a broad readership, paid for per issue. Today it sells subscriptions to a defined group of readers through a digital channel. That is three shifts at once: channel, payment and segment.
A consultant worked on the client's site at an hourly rate. Turn that into a digital product sold broadly on subscription and it is three shifts again.
But notice what did not happen: neither changed all six. Two or three shifts thought through beat six done halfway.
Find yours in twenty minutes
Go through the six and write, for each: today we do this. Is there a reason to do the opposite?
- Are we too broad to be the obvious choice, or too narrow to grow?
- Are we selling a product or a solution, and what does the customer think?
- Do we get paid before or after the cost?
- Do we own the customer relationship, or does somebody else?
- Are we doing something in house that someone else is better at?
- How hard does a bad quarter hit us, and why?
Pick the two or three where the answer hurts. Those are what you build the next eighteen months around.
Which concrete patterns exist within each shift is covered in 66 business model patterns. To work out which box carries the risk first, start with stress-test your business model, and to run it as a process, the phases are in Rethink NOW.
Why a shift can be calculated rather than debated
The problem with six dimensions is that they are connected. Move the payment and the cost profile changes. Move the channel and who you actually serve changes.
In 360° Sprint the business model is therefore a node connected to the other analyses, and the connections determine the order. Change one shift and the analyses downstream inherit it, instead of sitting there with the old assumption. The version history makes it possible to play a shift through and roll it back field by field.
That is what makes it practical to try three combinations instead of debating one.
A business model does not become a different one by changing everything. It becomes one by changing two or three things on purpose.
The whole subject in one place: business model: what it is and how to change yours.