Thought Leader Software | Alex Osterwalder

Peter Winick

Thought Leadership Through Software.

An interview with Alex Osterwalder about taking the tools found in a book and making them into software.

Today’s guest is Alex Osterwalder, an influential strategy innovation expert, the co-founder of Strategyzer, and author of the best-selling book, Business Model Generation. Alex shares how he followed the positive signals he found in response to his blog and other early sources towards writing his first book and the unconventional ways he found the funding to get an unconventional book to market.

Three Key Takeaways from the Interview:

How to take your Thought Leadership from book to digital products.
Why you need to listen to even the weak signals in your Thought Leadership.
What you can do to build a business model around the Thought Leadership in your book

If you need help with any aspect of your thought leadership, contact Thought Leadership Leverage. We will be glad to assist you starting with a strategy session to discover what you might need.

Transcript

Peter Winick And welcome, welcome, welcome. This is Peter Winick. I’m the founder and CEO of Thought Leadership Leverage. And you’re joining us on the podcast today, which is Leveraging Thought Leadership. I’m honored today to have our esteemed guest, which is Dr. Alex Osterlander. He’s one of the most influential strategy and innovation experts. He’s a leading author. He’s an entrepreneur and an in-demand speaker. He is number four on the on the top 50 management thinkers worldwide. The list goes on and on and on. In terms of the companies he’s worked with, Microsoft, Coca-Cola, Leslie. We don’t have all that much time. But I will say his business model generation book is amazing. Here we are. So let’s just let’s just dive right in and take advantage of the time we have. Alex, how are you?

Dr. Alex Osterlander Pretty good. Yeah. Thanks for having me. It’s great.

Peter Winick Great. So let’s just sort of start here. Most people in the position that you’re in, author, thought, leader, speaker, advisor. Well, you know, well recognized, didn’t have a deliberate plan that said, this is how I will accomplish this, right? If you want to be an accountant, you take math classes, you take accounting classes, you get a CPA. So there is no specific and deliberate path heading. What was your path? How did you get here?

Dr. Alex Osterlander That’s a pretty broad question. It’s pretty big.

Peter Winick I think, you know.

Dr. Alex Osterlander I just always did things I’m passionate about and I happen to be very passionate about companies, institutions and kind of went into that. So I did a PhD on business models and I had a great opportunity to work with these pioneer. And that’s how it all started out. I just wanted to understand how do companies work? Like why are they the way they are? And business model seemed like a great topic. So I’ve was looking for somebody on that topic. That’s how it started out. And then, you know, we put stuff out there all the time, shared and shared, and those beginning of blogs and SlideShare and seemed to like it. So because of those signals, you know, I started to do more. I started to talk in places. And so it kind of just all emerged. But, you know, I guess. Well, let.

Peter Winick Me ask you, when you say people started to like it, I want to push on that. Yeah, because I doubt it was stay at home moms in Idaho. Like what are the patterns that you see based on the types of people that the content resonates with?

Dr. Alex Osterlander So at the very beginning it was people downloading my blog and that was like other people researching doctoral students, professors, researchers, but then also business people. So that was surprising. You know, if it is not written to be read.

Peter Winick Together, it’s never.

Dr. Alex Osterlander People learn to read it. So that was an interesting site. Then I packaged it into slides and then, you know, it kind of started out in the startup world and that’s what we targeted first when we did the research on business models, really took the startup world pretty quickly and started being incubators, accelerators for sure, and then it spread to large companies. So now is everywhere. The business, small canvas tools we do our thinking. It started out first and startups on the periphery. So my very first speaking gig was in Columbia. And when I got there, you know, I didn’t really know much about Colombia. I had the old school reputation, all this dangerous country, you know, the drugs over there and already changed the law. It’s actually a fabulous country. But that’s where I got my first paid speaking gig. And that’s how, you know, things emerge. So first at the periphery, when I say periphery, I mean you’re not the core. You know, where you think management, thinking, United States, etc.. So it’s really in different places. And then it got just more and more traction. Just like a product would get more and more traction around the world.

Peter Winick So then, you know, talk a little bit about, you know, there’s a testing mentality there, right? You throw a bunch of stuff out, see not only what sticks, but to whom it sticks. Right. And then obviously, the startup community is important relative to business models. Right? So that would that would sort of be logical. And then there are some markets that I think it’s linked into that probably wouldn’t have been ones that you might have picked. Right. And sometimes it’s as important to have some solutions on the front end as it is to really, really assume that your assumptions are useful and the market will guide you to some degree. So I want to talk for a moment about the sort of the product path, Right? So a lot of people in your position struggle with, Okay, so I have a book and that’s 20, 25 bucks and I put a lot of effort in to sell a lot of those, even though the return direct dollar return for energy out is nominal or it’s sort of a silly business model. Then you’ve got speaking at some multiple of thousands of the book and then there’s all the other stuff. How did you start to figure out sort of ironic to ask the business model guy the business model question. And besides reading your book, obviously getting all the answers, but how do you figure out sort of what the right product innovation path is for the subsequent markets that you serve it?

Dr. Alex Osterlander So at the beginning was actually almost the other way around. I wrote How could I finance this book? So I wanted to write a book on this topic because I saw, you know, the signals coming back from the market, from sketch and blog. So I asked myself, how can I finance the book project? Because we went for a visual book landscape, very expensive to break into print, you know, something like a half million books. And I didn’t have that money back then because I was a student, worked for an NGO, etc.. So we asked ourselves, what’s an interesting business model that we could create to publish the book? So we did Kickstarter. Before Kickstarter, we ask the pay us to help us write the book, and we put it back then, you know, knowing was that just starting out? Yeah, we put it out there on Ning and said, Hey, you can buy access to this book. We’re going to write it. We’re going to share while we’re making the book. So we pre-sold to the 470 people. First it was 25 bucks, and then at the end, it just raised the price all the time. It was 470. And when it was finished, we closed the platform. People had their name in the book, but we saw we sell. And, you know, I remember it’s actually pretty scary moment because already then I was married, had one child at the time, and we had I had huge bills to pay designed to pay the printer and was betting on the presales coming in. And so is this pretty risky entrepreneurial path. But then it worked out and the book turned out to be a best seller. But you can’t know. And if I look back now, it was a really ridiculous bet because most books, they don’t sell more than a thousand copies. We already went 50,000, which was very, you know, arrogant to certain extent to say our book is going to sell 50,000. And now we’re over the millions. Right. But so let’s get to the story in the beginning. That’s how we finance the book. Okay. So first off.

Peter Winick I would say that it couple of things on there is one is if you haven’t been online in the last ten years, Google name is that’s gone. That’s interesting. But like you said, it’s sort of the precursor to Kickstarter. I would argue that. You know, because the book was so different in its visual and its appeal and all that. Yeah. It may or may not be a fair comparable to compare it to a typical business book, you know, 240 pages, 60,000 words, blah, blah, blah, whatever. You know, there’s something about your book that when you get it opened up, there is this visceral that, wow, my brain reacts in a different way. And I think that’s sort of part of the beauty of your work is it’s not, you know, sort of ironic for it’s not going to be this big, heavy, clunky academic piece of bringing the visual. And there are others that have done beautiful things visually in Rome.

Dr. Alex Osterlander And Rome was a huge inspiration. So before we created our book, my book budget was exploding because I was buying all these visual books that were not that I knew. I bought architecture books, a lot of short, a lot of art books. Those were the inspiration for business model generation, because even I wanted to write a book that we would love to buy, and that was visual and practical. And that’s exactly this. There were some visual business books. Then Rome goes in that category, but not too many. So that was clearly the inspiration to do something we didn’t want to do differently. So it’s different. We just thought it’s the right format. Landscape is out there. Ideas should make sense, you know, And then you could say, Well, they’re consultants and they put it in. No, we weren’t consultants. We just knew our ideas fit on the slide format, which is. Lynn Yeah, right, right, right. With the text around it and.

Peter Winick The other way.

Dr. Alex Osterlander To write books differently. So we don’t write actually books. We craft them because every spread is spread is a double page.

Peter Winick Yes.

Dr. Alex Osterlander One concept. You never have texts overflowing from one spread to the next.

Peter Winick So there’s a distinct concept that lives on those two bit, right? So you sort of redesigned this sort of user experience, if you will, of a book which is typically linear and great. So but let’s go back to what I was asking. So then you’ve got the book, which in your book is a totally different model, experience and outcome, which is pretty cool. But how right now tell me how I can how I can choose to give you money from a business suite. I can just email it to you right back and then.

Dr. Alex Osterlander I’ll take it, right? Yeah. Funny story where I took money from somebody and given it back in a forgotten. I didn’t have his email address, but this is a different one. So when we had the book, it was very starting to be very successful. The question is, what do you do? You can do training, you can do consulting. I was not so interested in that because I had a consulting firm before with friends and we built that up and we realized it’s not our thing. And with Alan, my co-founder then, who was the designer of our first book, This Is My Generation, said, Well, you know, software could be cool. So we decided to go into software again, completely naive, just as naive as writing a visual book, which nobody wants. Publishers don’t want visual books.

Peter Winick If you’re enjoying this episode of Leveraging Thought Leadership, please make sure to subscribe. If you’d like to help spread the word about our podcasts, please leave us a review and share it with your friends. We’re available on Apple Podcasts and on all major listening apps as well as at ThoughtLeadershipLeverage.com/podcasts. So the common thread here is the naive are you are the more successful you will be.

Dr. Alex Osterlander So you know to a certain extent I think you’re right. And that’s what entrepreneurship is about. If you know that things are impossible and you’re pragmatic and realistic, you’re not going to do them. Sure. You know, just act quickly. And then I’ll get to your question. I asked the public, we so we self-published and prepaid, etc., put it out there and used fulfillment by Amazon. But we’re not. When we sold the rights to Wiley, our publisher today, I asked them, you know, Richard, who publishes who publish business small generation as would you have ever published before Color Landscape book. And he said, No chance. You did everything wrong. Right. And that’s the thing, right? So we didn’t care what was.

Peter Winick Well, not only wouldn’t he have published it, it wouldn’t have even made it to the pitch meeting with the other editors. To say up for consideration is because a guy we’d never heard of asking us to spend 30 times the money. Exact no words like he would have looked look like a horse’s ass. Even bringing that to the media, like everyone in that thing has a certain expectation of this is what a book.

Dr. Alex Osterlander Exactly. And that’s where you need to be naive. So with each and every business. Okay, how are the other books that were unique to, you know, do we need to make. No, we just said, what’s the kind of book we want to create? What’s the right format? Whether you buy, but it’s still mass marketable. So we never forgot the audience. It was the book for us, but we knew there are more people like us out there and we had the evidence. Here’s the thing you can be naive and delusional, but you can’t be naive and listen to week signals. So. Exactly. We did pre you know, we did pre sales. We had very strong sales. People were giving us money for the book. So we knew there was something there. So I do think that naivety, accompanied with good listening to the signals, allows you to adapt all the time. And I like to say ideas don’t matter. You know, with books and a book idea doesn’t matter. You need to adapt it to what the audience should have. Right? Fine.

Peter Winick And I like what you say because what I’ve seen masking as naivete is is doing the opposite for the sake of doing the opposite. So I’ve seen more than one author say, no one’s ever published a business book in purple, so I’ll do it in purple. And no one’s ever, you know, sort of silliness, if you will. And sometimes that might shake up the mind and get a split second of attention. But, you know, if every business book is blue and yours is purple, okay, that’s interesting. But if that’s the best you got and it could be purple, it could be orange, whatever, it doesn’t work.

Dr. Alex Osterlander So I think differentiation always needs to be to better solve the particular customer job.

Peter Winick Yeah, I like to.

Dr. Alex Osterlander Use this jobs to be done concept by. Sure. Yeah. And that’s I think what we did with the with the book that was different. We designed a book that we thought was the right thing. And I’m not saying this is the only type of book is just the right type of book for certain.

Peter Winick Actually monetizing it through the book. And because you self-published, I want to just be clear here. You are actually monetizing the book because most people that publish in a traditional publishing house, even when they say they’re monetizing it, it’s a lower case in. Right. But you actually have real margins on the book based on the fact that you’re, you know, you self-published and you took the risk to make the investment. Then you’ve got speaking, right? You get paid to speak. We all know what that business looks like. Tell me about the software, because I’ve you know, people do video based training. People do ask, people do whatever. But how do you then take the ideas that live in your head, live in the book, live in the speech, put it into a piece of technology and say go at it.

Dr. Alex Osterlander So the type of books that we make is now we’re on our fourth and we have a sure thing. There aren’t. There is always a tool at the center, a visual conceptual. This is more canvas is the first one than deeper canvas in the next one. Invincible company. It’s the portfolio map originally back to in way the software. In my PhD I wrote about business models, but a rigorous model so we could build software on top. So the original idea was that you can do computer aided design for business like in art.

Peter Winick Interesting, right?

Dr. Alex Osterlander Architect makes buildings are an engineering. Yeah. Yep. Why can’t we do that for strategy and innovation? That was the goal. And then we started that with the iPad app. So with that one, we designed an iPad app and we sold, I don’t know, a couple of hundred thousand copies for $30. That was the monetization of the business model canvas, some of the content from built into an app. And we knew that’s not going to be the business. But we again, we did that as an experiment to see if there’s a market demand. The next phase we say, what if we put the $30 app onto the web and we asked for $300 checks for $300 on it? And that does it even if you create exactly the same value, it’s in context and pricing. So we went to the.

Peter Winick Well and you’re also giving, you know, Apple or however 30, $0.40 on the dollar and then people are going to look at the comparables of a, you know, a health app for $2.99 and think you’re crazy.

Dr. Alex Osterlander It’s the context, right? So we went to the Web app and we started selling that and we made all the mistakes you can make in software because again, when you’re naive, you’ll make the mistakes. But if you smart enough, you make calculated bets. You can always kind of save yourself. But then what we realized is the market is not that big yet. Still believe the market is there. And that’s what we’re growing towards now. But we realize there’s also a market for online training. So we started packaging our stuff, but again, our own style. So it’s not just talking heads and not just on a screen talking. It’s really packaged, you know, with slides and voiceover tuning to make it extremely visual, extremely simple and be practical. So we started having clients like Mastercard, you know, who scale this to a large part of their company. So we always listen to those signals. And now, you know, we are kind of back to consulting a little bit because we do help large established companies with growth and transformation. But again, we do in our own kind of way. So this last thing just we say no consulting is throwing people at a problem. We believe we throw tools, processes and coaches at a problem. So we have to call enabled services where you replace the human, where it makes sense, and you use really good coaches, where coaches make sense. So we can deliver ten times better for ten times less because people coming forward.

Peter Winick I want to go back on the consulting piece because I like that your consultant is not traditional. You know, throw bodies at the problem because that’s what most people have a methodology. Do you trade up smart people in the methodology? Magic happens, etc.. Right. Talk about the price point you’re able to command for the consulting today versus the consulting business you were in before you were bestselling author before your top speak. Before. Before. Before. Right. And the scale and scope of the problems that you’re working on. I think I know the answer to this.

Dr. Alex Osterlander So for me, this is two aspects. One is me as a speaker and as a workshop facilitator. You know, I just here’s an interesting approach that might be interesting for people who are listening with more book sales. I just always increase the price. And my simple thing was when everybody says, No, I’m too expensive. When everybody says yes, I’m too cheap.

Peter Winick Exactly.

Dr. Alex Osterlander What’s going on my radar. So it just went up and up and up. And I don’t like speaking publicly about my speaking rates, but they’re I think they’re crazy in the sense that at the same time, I know the value of bring to a company they were winds of dollars when I do these things. So that went up a lot on the more consulting end where we have teams, technology enabled services. We went from smaller deals around 30, $40,000 to $300,000 to millions.

Peter Winick To just ten X and then more 10 to 20.

Dr. Alex Osterlander Exactly. And it’s the you know, it’s always this thinking that drives us is we had a $30 book, then we went to the $30 acquisition. And APT is really it’s not enough. You can build a business around transactional with $300 recurring revenue. Yeah, that’s not enough. We need to, you know, target the decision makers. How do we do that? So the book content we make and the software and the training always go hand in hand. So it’s almost like you have well.

Peter Winick They all have the same DNA. It’s not like there’s stuff that you omitted from the book and said, You have to pay me more money to get. It all lives in the book and all lives in the app, and there’s different markets. So I always say, listen, the same idea could be worth a dollar or $1 million depending on the context of the market, whatever. And it doesn’t mean that the million dollar one is wiser, more refined, whatever. It’s typically the context that the content is deployed in that determines compensation.

Dr. Alex Osterlander And this is the way I would look at it, is what’s the business model you want to design around your book? So if you write a book, the difference just I have nothing against that right of book and do the speaking or write a book and do the consulting. Sure. You don’t have to manage people. Right. And that’s.

Peter Winick Great. Kind of nice authors.

Dr. Alex Osterlander Like Marshall Goldsmith, number one, you know, okay. In the world is that I don’t want to build a business. So you write the speaker and he had businesses that were managed by others.

Peter Winick I’m licensing them. Right. So he repurposes the content.

Dr. Alex Osterlander Yeah, exactly. I wanted to do both because I’m fascinated about is in building them and I wanted to apply the stuff we teach because I do believe you get a different kind of view of it when you should.

Peter Winick So and I would also say the more. You’re getting data from the app that could feed more content. You’re getting anecdotal and evidence based stories from the consulting that feeds the content. And so ultimately there is this interconnected flywheel effect from a supply and demand and content creation and all that, that that that becomes pretty slick.

Dr. Alex Osterlander And we wouldn’t write what we write today. And I think it’s practical stuff. We wouldn’t know if we hadn’t always tried to improve. So for me, the team, the goal is how can we get a little bit better every day? And you know, as long as established companies are not good at growth and transformation, so they’re not able to reinvent themselves. We take it as a personal defeat. We’re doing something wrong. Sure. Stupid. They don’t get it. We say, no, no, you’re still doing something wrong. And that’s how the books and the tools, they always get better. They’re all integrated. We’ve always the missing piece. We need to talk about portfolio management, this missing piece. Let’s talk about innovation culture. So we expand and keep it integrated and always get a little bit better because we’re trying a little bit more. So we remain naive and try, okay, can we help companies design culture? Well, turns out you can’t, right? But we had to kind of work ourselves towards that and we build a business model around that. So for authors and thinkers, keeping the business, my mind that works for you is always the most important, you know? Maybe So you want to build a company, maybe you’re the one person for both is fine. It’s a choice, right?

Peter Winick Sure. Well, on that note, we’re bit out of time here, so I want to thank you for all that you’ve shared with us today. Great stuff and obviously phenomenal story. But I wish you the best on the on the next books and keep the naivete. I mean, eventually you run out of naivete. Angel may know everything about everything.

Dr. Alex Osterlander Thank you very much. Was great.

Peter Winick Great. Thanks for having me. Thanks for coming on. To learn more about Thought Leadership Leverage, please visit our website at ThoughtLeadershipLeverage.com. To reach me directly, feel free to email me at Peter at ThoughtLeadershipLeverage.com. And please subscribe to Leveraging Thought Leadership on iTunes or your favorite podcast app to get your weekly episode automatically.