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Prototyping’s Value

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PROTOTYPING Prototyping is a powerful tool for developing new, innovative It is important to understand that a business model prototype
is not necessarily a rough picture of what the actual business
business models. Like visual thinking, it makes abstract concepts
model will actually look like. Rather, a prototype is a thinking
tangible and facilitates the exploration of new ideas. Prototyp-
ing comes from the design and engineering disciplines, where it tool that helps us explore different directions in which we could
162 is widely used for product design, architecture, and interaction take our business model. What does it mean for the model if
design. It is less common in business management because of we add another client segment? What are the consequences of
DESIGN the less tangible nature of organizational behavior and strategy. removing a costly resource? What if we gave away something
for free and replaced that Revenue Stream with something more
While prototyping has long played a role at the intersection of
business and design, for example in manufactured product design, innovative? Making and manipulating a business model prototype
in recent years it has gained traction in areas such as process forces us to address issues of structure, relationship, and logic in
design, service design, and even organization and strategy design. ways unavailable through mere thought and discussion. To truly
Here we show how prototyping can make an important contribu- understand the pros and cons of different possibilities, and to
tion to business model design. further our inquiry, we need to construct multiple prototypes of
our business model at different levels of refinement. Interaction
Although they use the same term, product designers, architects, with prototypes produces ideas far more readily than discussion.
and engineers all have different understandings of what consti- Prototype business models may be thought-provoking—even
tutes a "prototype." We see prototypes representing potential a bit crazy—and thus help push our thinking. When this hap-
future business models: as tools that serve the purpose of discus- pens, they become signposts pointing us in as-yet unimagined
sion, inquiry, or proof of concept. A business model prototype can directions rather than serving as mere representations of
take the form of a simple sketch, a fully thought-through concept to-be-implemented business models. “Inquiry” should signify a
described with the Business Model Canvas, or a spreadsheet that relentless search for the best solution. Only after deep inquiry can
simulates the financial workings of a new business. we effectively pick a prototype to refine and execute—after our
design has matured.

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