We’ve heard about how the introduction of Apple’s iPhone changed the business model of Apple (again) and how this one product represented 60% of the company’s revenues before the iPhone was four years old.
Apple is certainly one company that continues to innovate it’s business model.
Well, the most innovative distributors are doing the same. These Innovative distributors see the need to evolve the business beyond the traditional – of just moving products – box in box out.
Valin Corporation, out of San Jose California is once such distributor led by our guest, CEO Joe Nettemeyer.
That was the great warning sign to us is we’re going to march into oblivion if we don’t find ways to create new value streams.
- Joe Nettemeyer
In 2010 about 90% of Valin’s revenues were generated through the traditional distribution model of what Joe calls box in, box out. Now, between that 2010 and 2014, while generating compounded annual growth of just under 20%, Valin innovated it’s business model where 54% of its revenues were now being generated from services and capabilities of a new business model – providing value outside of the product.
It’s a model of being indispensable to the customer, of course through product, but through a model of augmented engineering, data and analytics, and by being integrated into the customer’s systems.
In this episode, Joe shares the story of Valin’s business model innovation and the outstanding results achieved including, increasing the value of the company 6-fold – in this four year period.
In this 33 minute episode Joe and I discuss:
- Why distributors must innovate their business model beyond just moving products – box in and box out.
- The mindset of a CEO who makes the decision to innovate the business model
- The direct lesson learned from Apple applied to Valin’s business model innovation
- Competing against Amazon when they can spend more on IT in an hour than Valin can in a year
- The accelerating pace of change and identifying market transitions
- How data and analytics are at the center of future business models
- The role of fear and personal growth in business model innovation
- The Evolving Model Of Selling In Distribution
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