I've never had that as an applause before.
That's interesting.
You invented that?
Not always.
It's very German.
Wow.
I never had that before.
Okay.
Wow.
Is that the highest form or would standing up and knocking on the table?
Okay.
Well, thank you very much.
Yeah.
So a lot of people, I like to start off by saying what my, the letters beside my name.
Everybody's always curious.
Come on in.
Just in time.
So BDI is baccalaureate in industrial design.
That's my undergrad.
And then I did a master's in applied sciences.
And I was interested in systems design.
And then ADDIC is the professional association of designers in Quebec.
So the Q is for Quebec.
And NPDP is a professional certification that demonstrates that I know what innovation is.
It's called the new product development professional.
So it's a little exam with a lot of knowledge and a lot of jargon and special words that
you're supposed to know to say that you really know how to do innovation.
So that's, it gives you an idea of my pedigree and my background.
Other than that, I'm wearing my sunny yellow shirt today because I was told that Hamburg
is always rainy and today is not rainy.
So I was trying to bring a little sunlight in your day.
But other than that, I'd like to start off with an example of what's a business model.
A very concrete example.
Now, of course, when I show this to the people in my province of Quebec, they really quickly
understand, first thing you see, it's a Rona Eco Blade.
But I'm going to translate this for you guys.
Maybe you've heard of this company before.
No, you've never seen this.
But I'm sure you've heard of Bauhaus, the company Bauhaus where you buy building materials, right?
So imagine if this is not a craft-o-matte blade, but it's a Bauhaus, an eco Bauhaus blade.
Imagine Bauhaus created its own little brand and they created their, they put the brand
on an existing product.
We see this a lot in food products, right?
There's a white label or a liter price or I'm thinking, what are the other?
Netto, I guess, has its own little, it's the same juice, but it's Netto juice.
It's not, okay.
You guys understand this concept?
Good.
So what's special here, I'm asking you guys, what's special about this product?
Imagine it's written Bauhaus Eco.
What's the first thing that you see on this product?
Don't be shy.
Eco label, yeah, okay, that's one of the things.
Another thing that you see on this label?
Yes.
But more specifically, there's two prices on this product.
How weird, no?
How often you go into a store and you see two prices on a product?
Doesn't happen often, right?
Okay.
And there's another word, notice on this beautiful German one, there's no words, nothing.
But on this one, there's a big word here, professional.
So Bauhaus, usually, who do they sell to, Bauhaus?
Is it to businesses or to consumers?
Consumers.
And now we have the word professional, so they're trying to sell to professionals,
therefore they're trying to move into the business to business relationship,
even though they're usually a business to consumer.
Okay, so what is special about this?
I'm trying to get you guys to get into this,
but what's special about this is that this is, what do you think the two prices mean?
How do you interpret that?
Why do you think there's two prices, yes?
Good thinking.
Ah, good thinking, but no, that's not it?
Fair price.
Fair price?
Oh, that's interesting.
A fair trade version and, okay, that's not it, but I like that idea.
Yes?
Yes, you're very close.
Lease and buy, you're in the right direction.
So here's what it is.
The first time you buy this, it costs you $43.
$42.99, okay, $43.
The second time, if you bring it back to the store, it only costs you $21.
Isn't that interesting?
They're finding a way to get you back into the store.
Now, how many times do you have to buy this so that, let's say this is $28.
Okay, let's say this one is 28.
I'll go euros just for, that's not how you do euros, is it?
It's like that, right?
No?
Okay, hold on.
No?
I forget.
Let's go back to dollars.
Okay, so 28, and here we have 43, and the next time is 21.
I forgot how to do, oh, I know it is.
There it is.
Okay, so who can calculate very quickly in their minds, how many times do I,
if there's a difference of $7, how many times do I have to buy this for it to be,
for me to start saving money?
The second time, really.
I think it's more than that.
Yeah?
Two and one-third.
Two and one-third?
Yeah.
How do you do that calculation?
If you buy two, you have to pay 64.
Yeah?
In this case, and in the other case, you buy two, you have 56.
That's not the case.
Okay.
Okay, so you buy a third one here at 21 euros, and then you add that up.
64 plus 21 is 85, and then I buy a third one here, and this is 28 plus 56 is,
remind me, 84.
Right, so that's the correct answers.
At the third time, actually, it's the fourth time you buy it,
because here there's just one euro, but the next time you start buying.
And how much do you save every time after?
Seven euros, because that's the difference between the, that's what you're saving.
But look how difficult that was for us.
We're 15 people, and we're there calculating, going, I don't know,
how many times do I have to buy this?
Now, is this, according to you, a great way to show this?
Hey, you're going to be saving after the fourth, where's this information that,
everybody's, the reason why we're doing this is to save, right?
We're not buying this because it's written for me because I'm a professional,
or because it's cabinetry, or whatever.
You're buying this because you want to save money.
That's one of the, there's multiple reasons why we're buying this product,
but it's not communicating very efficiently that you are going to be saving.
Do you agree with me?
Okay, and it's, and you know the contractors,
how often do you think contractors are mathematical geniuses,
that they can very quickly understand how many times they have to go back
and buy this product?
Not very often.
I don't think that mathematics is the number one characteristics
amongst professional people who buy saw blades.
So, but what's interesting, so put that aside, there's,
there was three interesting things.
So one was the pricing, the model, the pricing model,
which was, we've discussed.
The second element is the fact that this is a product within a label,
which is Bauhaus, or in this case Rona, created its own label,
its own white label is what it's called.
And that's very interesting, the fact that they're not just selling a product
under somebody else's brand.
This is a retailer that decided to sell its own product under its own brand,
and not only that, but they chose to, when they created this brand Eco,
they decided to make it a green brand to distinguish their products,
to make them higher end compared to more traditional models, products.
So that's number two, is that they created their own label,
and they purposely directed this label to be an Eco label.
It's even called Rona Eco, therefore everything that's in that label
has to be validated through life cycle assessments.
How many people have heard of life cycle assessments, LCA?
Good, okay, that helps.
And then the third thing is professionals, because usually it's people like you and me
who go into Bauhaus, but in this case they're trying to get professionals,
and the pricing mechanism is coherent with the idea of professionals
because they want them to come back often, whereas you and me, if we buy a blade,
we'll maybe buy one blade every six years, or ten years,
I don't know how often we change blades,
but professionals, they use blades enough that they would want to come back and change it.
So what's interesting is that Rona Eco, what they did is they had a supplier,
that their business model is to shave off the used part of the blade
and re-sharpen the blade.
So instead of throwing away 99% of the material,
when what you want is the 1% of the blade that cuts,
well this company says, bring us back the blades and we'll sharpen it,
and then we'll send it back to the customer.
So Rona said, well that's a great business model, but let's put it within my label,
and that's how this product came to life,
by changing not the product, not the service, but changing the business model.
And that's what's really interesting about this,
and this is my first lesson for you guys,
is that we can innovate without changing the product.
It's the same product, exactly the same, same function, same size,
same opportunities, same materials, same everything when it comes to the product.
But they changed the business model,
and they changed three aspects of the business model in a very coherent fashion.
They changed the pricing or the revenue model,
they changed the label or the marketing or in the customer relationship,
and they changed the customer segment, they're now going towards professionals,
even though customers can still buy it,
but they wanted to get professionals back into their store.
So I think this is a really good way to start an introduction,
why is business model innovation so interesting,
is that it can even change a regular commodity like a saw blade,
and change the complete relationship that we're having with this,
and it's an opportunity for innovation.
That's my introduction.
So why did I personally get so interested in business models?
Well the story is, I was working with a table manufacturer,
and I'm an eco designer, so I've learned how to use lifecycle assessments
and redesign products thinking in terms of the environmental impact,
and stakeholders and the business challenges.
And every time I would meet the companies,
and I'll take the example of the table company,
they were making aluminum legs,
and I said well why don't we look at,
we have plenty of options how to make this table better,
we could look at where the wood is coming from,
we could maybe recycle the aluminum,
that'll take down maybe 3% of the impact
if we go from normal aluminum to recycled aluminum,
and I had six or seven different ideas,
and one of the idea was to rent the tables instead of selling them,
and I showed them, wow this could reduce the impact by 80%
if we start renting the tables, taking them back,
because the part of the table that gets used is the top of the table,
and you could just change the top of the table,
and you don't have to sell the whole thing again, just change the top.
And they looked at all the opportunities,
and I gave them a beautiful report,
I called them six months later,
and I asked them hey what did you guys choose
amongst all the beautiful ideas I gave you,
and they said oh we went for the simplest 3%,
we're just going to use more recycled aluminum,
we're not going to change anything.
And this happens all the time is that they choose
the most first simple step, which is okay,
but I want to give them a vision,
I want to give them an opportunity to hit the 80% improvement.
So this is how I feel, I feel that companies are very interested
in product improvement, and this is my example with cars.
So this is a product improvement,
it's usually cars have a gas or a diesel engine,
and in this case, you recognize this car?
Yes it's Prius, the pixels are maybe not perfect for you guys,
just to understand the curve,
but the Prius basically has the same Toyota thinking,
but it's not the same motor, it's a hybrid motor, big deal.
Okay, so this is product improvement,
and what we're saying here with this curve is that product improvement
we can improve maybe about a one time factor,
the environmental improvement is about one time.
Product redesign is about thinking about the relationship
with the user and the product,
so a smart car is actually maybe a potential of up to four times,
why? Because this car is made for four people,
but we know that there's only one person often driving in the car,
whereas this car at least is made for,
this car is thought for city driving and for two people,
so there's a new relationship.
And then the third level is function innovation,
and this is the idea of having access to car sharing,
so you choose which date you want it,
there's not one user, but usually they say that car sharing,
there's six to 23 people using the same car,
and the average is about eight.
So that means that we're taking off seven cars
or six to 23 cars off the streets.
And then the last part, which is something that Europe is very good at
and North America, we're getting there,
is urban design or urban developments
or thinking about how we live in a bigger scale.
So yes, this is a product, this again is a product,
this is more of a, and this is what's interesting,
this is a business model, but this is more of a political decision
and this implies so many people that one business can't change
the shape of the street and mobility in a city, right?
Not just one company can't decide,
okay, we're going to start creating bus lanes
and this is outside of the one business opportunity.
So that's why I focused on function innovation
and I believe that business model innovation arrives at this level
and this idea of improving by ten times or 90% the environmental impacts.
So that gives you an idea of why did I get into sustainable business models
is because I want to at least hit the ten to twenty times
environmental improvement through my actions.
I don't want to be stuck in small ideas, which is okay
because we need to do product improvement
and we need to do product redesign.
But I wanted to, how can I say, climb up the ladder is my feeling
and I'm trying to inspire you guys to do the same.
So this is today's agenda.
We're going to try to answer these questions.
First of all, what is a business model?
Why do companies not or why do companies innovate their business models?
Then we're going to start understanding them more in a practical way.
We're going to start adding layers to this business model canvas.
Then we're going to talk about patterns
and we're going to create and share business models through scenarios
and I'm going to conclude with a few challenges for the next century.
Is that okay for you guys?
So what is a business model?
I have maybe three or four definitions of a business model.
I'm sure that now that you've learned to talk to Florin,
he loves business models and this is sort of the evolution
of how business model thinking has started.
So it started with the theory of a business by Drucker in 1954.
Yes?
Yes, I can give him a copy and he can send it to you.
Is that okay?
So you don't have to take notes all day.
And there's no exam at the end of the day, so just enjoy yourselves.
So it started with the notion of a theory of a business,
this idea of something that's intangible, this business model.
And then fast forward a lot of years, 40 years, to 1998
and then we came back to this idea of architecture of flows,
which sounds a little technical.
Then we have structure of content and transactions.
Again, we have this notion of flows.
Move on, logic connecting technical to economic.
This is a very special one, Magretta, story of how it works.
The story, the notion of story in a business model,
of explaining how it works.
Then representation of relationships, again, the notion of flow.
Four elements to deliver value.
Value finally comes up as one notion in business models
and this one is kind of weird.
The reflection of realized strategy.
This is kind of like back to the future thinking for me.
The reflection of realized strategy is like, I don't know,
this one's a little crazy for me.
But the definition that comes with the most popular book on business model,
the business model generation by Auster Waldron-Pignard is this one.
It's the rationale of how a business creates, delivers and captures value.
And this is important.
There's three aspects to a business model.
There's the creating value, delivering the value and capturing the value.
There's three different elements to every business model.
Now, what's really interesting with this book
is that they created a visual map of a business model.
This is really useful because it becomes something we can talk about,
we can share, we can explore.
These are the nine elements that describe these three activities
of creating, delivering and capturing value.
Let's look at this drawing here.
It always starts with the value proposition.
This is the gift that the company is trying to offer to its client,
the value that it's trying to offer.
Now, when you have this gift or this value,
you want to offer it to whom?
You want to offer it to your customers,
and you will have to segment your customers.
But you can't just click your fingers
and the value proposition is now in the hands of your customers.
There's two types of relationships that you build with your customers.
You have, first of all, a customer relationship,
which is an emotional relationship.
It's something that's intangible.
It's about touch points.
There's the channels, which is a tangible means
of getting the products into a store or into the hands of your customers.
A channel could be a website, it could be a store,
it could be by phone.
You can buy things by phone.
A bank branch, for example, would be a channel.
So this is the tangible way of getting the value to the customer,
and this is the intangible.
Often we talk about marketing or a way of communicating with the customer,
is the relationship that you're building with him.
So that's how you deliver the value to the customer.
But before you deliver that value, you have to create it.
So you have key activities,
which is basically everything that you do when you go into work,
and you have resources, which is all the people,
all the financial resources, all the materials,
everything you need to do your activities.
So this is basically your capabilities,
is what you have and what you do with it.
And then everything you can't do inside the business, you have partners.
So if you're not very good at accounting, that's okay.
You can maybe have an accounting professional
that comes and helps you with your accounting.
That's an example of a partnership.
And I'm sure you've all heard of the bottom line, Nisbha.
So this bottom line is represented here,
and on one side you have the revenue,
which is when the customers buy, they give you money,
but before that you have costs to create the value.
And you want to make sure that your revenues are higher than your costs
to make sure that you're a profitable company.
Does this make sense to everyone?
It's pretty simple, right?
This is very useful.
So let's see how well you understand this.
This is the same thing, but this is my little personal interpretation
of this image on a 2D canvas.
And here, let me give you an example
that the business model can be used for anything.
This is a business model of Christmas in Spanish,
just to make sure that you guys understand.
So what are we offering as a value proposition?
We're offering toys and joy to the children.
This is what we're offering.
What is the market segment?
Well, we have the kids here who are...
Can you see the difference between this guy with a slingshot?
You know what the difference is?
Yes, that's right.
Who has been naughty and who has been nice.
The customer relationship.
What did the children do?
They write letters to Santa Claus.
How does Santa Claus get the gifts to the people?
He's got his sleigh.
Now, the key activities is making sure
that we know which gift goes to which house.
The resources are the distribution, the production,
and distribution again.
And the partnerships, well, the letters,
they have to go to the mail, and this is sort of...
I would say this is the religion aspect
or the religious aspect of Christmas
that we'll just put as a partner.
Let's not get into that.
Now, this is the funny part.
What does Santa Claus get for his efforts?
Cookies and milk.
And who pays for this?
No costs. This is magic.
This is the magic of Christmas.
Toys magically arrive underneath the tree on Christmas Day.
So what I'm trying to show with this example
is not only the dynamics between the different elements
in the business model, but mostly what I'm trying to show
is you could look at any activity.
You could look at the library.
You could look at the person on the street asking for money.
You could look at any economic activity.
And think about what the business model is.
How does that organization, how does this nonprofit,
how does this person, how does this entrepreneur,
how are they generating a business
or making a business that has a life?
It's through this structure that we analyze
the business model of pretty much anything.
And it's not just companies.
I mean, it could be nonprofits like the Red Cross,
governments, libraries, pretty much any activity
has this type of dynamic in it.
So it's really interesting.
Let's see now if you guys, whoops, this is the answer.
Let's see now if you guys, I'll try this.
We'll see if it works.
Okay, let's see.
So I'm going to ask you guys what is the business model
of everybody's favorite restaurant?
I'm not going to do better than that.
Okay, so what is the business model of McDonald's?
Let's start with the customer segments.
Who eats at McDonald's?
Youngsters, good answer.
Who else?
Let's have three segments.
Working class, yes.
Can I say professionals?
Okay, another group of people that eat at McDonald's
or families, good.
Okay, what is the value proposition of McDonald's?
Fast food, what else?
Tasty, okay.
Okay, location we'll put here.
Okay, you guys are too quick.
American lifestyles?
Yes, okay, cheap.
Yes.
Familiarity, okay.
Anything else that they're offering?
Ambience.
I'll put that in American lifestyle.
Okay.
Joy, we talked about fun.
With that tasty fun, it's pretty much everything here is.
Anything else?
Okay.
What about the customer relationship?
How does McDonald's create its customer relationships?
Advertisements, yes.
Anything else?
Yes, okay, so the relationship is built on,
what's the word, communality or consistency?
That's the right word.
No, I was wrong.
I'll get it.
Okay, anything else in the category of customer relationships?
Yeah, service is definitely part of it.
Okay, let's leave it at that for now.
Let's look at the channels.
How do they get the product to you, we said through locations?
Restaurants, yeah.
Now, what is special about these locations?
Ah, okay.
Yeah, that's an aspect.
Yes, so how do you call it?
High footfalls?
Interesting, what's a footfall?
No, but what does it mean, a footfall?
Okay, high traffic?
Yeah, okay, I like that.
Okay, that's perfect, we've filled that one up.
Now, activities, what are the activities that McDonald's does
to offer this value proposition?
Yeah, okay, so they?
Farming?
You think they farm their own?
Sorry?
Standardized?
Recipes, okay.
So, cooking, recipes.
I forget how you write recipes.
I forget.
Yeah, okay.
Okay, anything else that they, the other activities of McDonald's?
Cultural adaptations.
Okay, so what would be the cultural adaptation here in Germany?
Spätze?
Spätze, I mean?
Beer.
It's true, the first time I, yeah, there's no beer in Canada in the McDonald's.
Okay.
Good point.
Let's have that discussion in a few minutes.
Okay, now we said the partners.
Okay, that one goes there.
So, partners, who are their partners?
This is an error, this shouldn't be there for now.
So, who are the partners of McDonald's?
One number of time, what did you say?
Global supply chain, so this is not community, okay?
Global supply chain.
And you were saying, sir?
Okay, supply, yeah.
Who are the other partners?
Yes, okay, so now we have franchise sort of at two areas.
We'll have a discussion about that.
Any other type of partner?
Very evident, what do you?
Employees, are there partners?
Yeah, I would say, actually I forgot resources.
Employees are, I forgot to talk about resources first.
Yes, yeah, okay, so the stations.
Okay.
Farmers, yeah, we had them in farming as an activity,
but farmers may be part of the global supply chain,
one of them is farmers.
Okay, I'm thinking of a big, red brand, Coca-Cola.
Okay, so that's a partner.
They don't have the recipe for Coca-Cola,
it's hidden in Atlanta somewhere.
I don't know, I don't know what Coca-Cola is.
Yes, actually they were, I think in Canada it's now illegal
for them to give toys to associate fast food with fun,
so I think they're not allowed to do that.
The food, yeah.
Okay, yeah.
Good, okay, and now let's look at the cost and the revenues.
What do you think is the biggest cost for McDonald's?
Marketing, you think, is their number one cost.
Okay, so labor.
What else is there, do you think?
Okay, so let's call it locations.
What else?
Sorry?
Supplies.
So we all take it, we all take it for granted that the food doesn't cost anything,
the marketing is very expensive, the labor, the food is so cheap,
is what you're saying here, but it's okay.
Okay, now in terms of revenue, how do they make their money?
McDonald Corp.
How do they make their money?
Sales of, okay, so food sales, or I should say meal sales.
Yes, license agreement of what?
Yes.
So what do you think makes more money?
You think this makes more money than that?
Yes, I'm talking about ratio.
Corporation, yeah.
Okay, great, this is a really good start.
You guys did better than I've seen many people do.
Let's look at what I have here.
Okay, so actually first, let's see what I've seen here
and then we'll have a conversation about franchise
and the other one was, there's another element that we had.
Which one was it?
Whoops, come on.
Okay, all right, so let's start with the customer segments.
Families, youngsters, professionals, bravo, you guys were spot on.
Value proposition, fast time, consistency around the world, and a meal, okay?
Distribution channel is the location, it's the store,
it's the restaurant is the distribution channel.
Customer relationship, now I don't know, I think this is weird
but I think it's the image I took from the internet,
I didn't create this beautiful image,
but I think that they're trying to go towards online and more mobile marketing.
I don't know why they chose mobile, but I don't know,
maybe he didn't want to draw television, but for some reason there's,
I think it's the idea of advertising.
Okay, this one's interesting, key activities, branding, billboard, okay?
And number two, this is the same meal over and over again
and this is the industrialization of service.
So that's one of their big activities, McDonald's, as you guys said,
you guys said they create their own specialized cooking,
you put it in as a resource, but they see it as an activity.
They see it as we have to make sure that the meal,
that the production of the meal is always the same,
we're going to create the machine that makes the egg come out perfect for the bun
so that there's no extra egg outside of the bun, you know, things like that.
Key resources, of course, the service team,
and having a resource, you guys said it, location,
but having property on certain land that is very special land,
of course you guys talked about high foot, what was the expression,
high footfalls or high traffic areas,
and initially McDonald's started with a relationship between highways.
In the United States, in the 1950s there was,
they were building the highways back then
and they had spaces beside the highways
and they would have auctions for people to buy the space beside the highways
and McDonald's was one of the first to buy these spaces beside the highways.
And what are they saying here?
Franchises, so we have McDonald Corp that sells a franchise to their partners
and they see their franchisees as partners,
but we said the distribution channel is the franchises.
What do you guys think about that?
Is the idea of having a franchise, is it a partner
or is it a distribution channel, is it a way of getting the food out there?
It's both, it's both.
So it's hard, this is the proof that it's not a perfect,
scientific thing, it's not like we're splitting atoms
and we know exactly how many quarks and, you know,
this is, we use this to have a discussion
and we understand that there is a notion of partnership
with the McDonald's Corp and the franchises,
but at the same time the way for them to get the food out
and to make it that there's a McDonald's here in Germany,
the way there's one in Canada and the United States,
it's the notion of a channel and distributing the food.
So it's up to discussion.
Now let's look at the costs.
Marketing, food, locations, labor, four on four.
Revenues, franchising, meals.
You guys said more money from the franchising than the meals.
Good job. You guys are very good. Bravo.
You guys did a great job at this.
Okay. So there was another point, but I forget.
We'll see if we can ever think about it later.
So we have franchising here and here.
So we even had franchising as a relationship.
I don't think it's a, I think it is more of a distribution channel.
And then we're talking farming is where we had farming at two areas.
Right. So we had farming as an activity
and they didn't put it here as a partnership.
So I'm kind of sad about that, aren't you?
Aren't you kind of sad to think that, you know,
their farms are not part of their partner.
They're just, their partners are franchises, not farms.
Yes.
Yes. Exactly.
Yeah. It's one sided, isn't it?
I agree. I agree.
So I'm not saying this image wasn't made by McDonald's.
Hey, this was made by another person.
This is not a McDonald's image.
It's someone who did an analysis on McDonald's
and we're reacting to this analysis.
Okay. So if you could change one element of that business model,
what would you change?
If you could change one element of the McDonald's business model,
I'll put it back.
Does everybody have a pen and paper?
If everybody could take out a pen and paper and just write down,
just think, I'll give you guys three minutes to think about what,
you can change one element.
You can choose one zone and say,
oh, I want to create a new segment and I'm going to use,
I'm going to say we're going to create McDonald's for seniors.
So everybody take out a pen and paper,
choose one area and change it.
No. Just in general.
Yep.
I really want everybody to write down an area and a new idea.
Yep.
Do we have to change one segment of the canvas?
Yes.
Or the content?
Both. You have to choose one area.
Is it distribution that you want to choose, segments or whatever?
Yes. Change something else.
You can say, in the resources, I want a new resource.
You can say, I don't want this or I can still want this and I want to add
or I want to just change one thing.
Choose whichever one you want.
One more minute.
It's a quick thing. It's just for fun, for discussion.
Sorry? Too much pressure.
Okay.
So how many people, did everybody write something down?
Okay. How many people touched the value proposition?
Directly.
How many people chose the value proposition?
Okay. How many people chose the customer segments?
No one.
How many people chose the relationship, the channels?
One person.
How many people chose the activities?
One.
Resources?
Partners?
Three.
Costs?
Revenues?
One person.
Okay.
So most people chose the value proposition.
What did you choose to propose?
Having more controls over the calorific content.
More healthy food.
Excellent.
Okay. Any other ideas on the value proposition?
Yes.
So slow health food.
Okay.
No.
Okay.
Okay. So you're talking about the revenues here.
You're trying to find a way to reduce the costs maybe to...
Yes. Of course.
It's too cheap. It's not cheap.
Okay.
Okay. Any other thing we want to change to the value proposition?
Healthy. Yeah. Anything else?
Yeah.
I thought that healthy is not really fitting to my goals at all.
Maybe because also professionals can be there.
You go there and you have to have those.
Yes.
Everyone has to be petty as well as the clients.
Okay.
Maybe you can start to change your key resources for at least some part of your product
which you're going to offer more to biological points.
Okay. Yeah.
So they do have this kind of really specialized activities.
Mm-hmm.
So they would be able to offer also biological food in a very cheap way in comparison to other restaurants.
Okay.
That would be a way to find it.
Right. Organic resources. That's a great idea.
Any other elements?
Okay. So who talked about, I think Florian, you chose channels?
Yes.
What did you propose?
I was supposed to think about the different models.
Yes.
So are you suggesting that the chef goes to your house and makes the food with your...
Yes. And he's on a bike.
And he's got the food on the back and just arrives at your house and cooks you a hamburger.
Of course.
Yes.
It's okay.
Well, maybe it's from every franchise.
Franchise has a different model. Maybe.
I always say both of them and they have, they've had to be randomized restaurants.
Yes.
So a high-end experience.
Didn't last.
Okay. Other ideas?
I also read about the kind of lessons where you get your meal at the table and it's very tiny.
Yes.
And they think about it as new kind of what you said.
Yes.
So what's interesting is we're playing with our understanding of the brand and of the value proposition and of the product of McDonald's.
We're playing with these elements.
You know, this idea of having someone, a chef come over to your house.
Is this really the McDonald's brand?
You know, so we're pushing.
We're experimenting and we're using the business model to show where would it still fit and where would it fit.
But the big lesson I want to show you, actually before I come up to the big lesson,
if you had to give a score from one to ten to the quality of a meal at McDonald's, what score would you give it?
Yeah.
Two on ten.
How many people give it three on ten?
Four on ten.
Anybody want to go to five?
You like it?
It's okay.
Anybody want to go at six?
Seven.
Anybody want to go for eight?
Anybody want to say it's a ten on ten meal?
Okay.
So it depends.
What you're actually looking at.
I agree.
It's really true in the sense that you can get the same every time that you know exactly.
Yes.
But it's always the same if it's true that it's always that.
Okay.
It's not really true.
Okay.
But here's the big idea.
We can all agree that it's not the best meal of your life when you go to McDonald's.
It might be the most convenient.
But let's agree that it's not going to be memorable for the rest of your life.
Right?
Okay.
So the big lesson with business models is that a mediocre technology or in this case a mediocre meal
pursued within a great business model may be more valuable than a great technology,
great product or great meal exploited via a mediocre business model.
So what I'm saying is if you go to the fanciest restaurant but there's only one restaurant
that is this fancy restaurant and sorry that's my computer.
And if this fancy restaurant only makes a small margin from the food because it's so expensive to get this
and they don't sell it, they only have a mediocre business model but they have a great technology,
great product, great meal.
But it's not as valuable as a medium, as let's say a great business model.
Now of course look in my image here what I'm saying is a super business model that holds a technology
is greater than an okay business model with superb technology.
Okay.
So it is technology plus.
So I'm not saying you can have a crap disgusting meal.
It's got to be a good meal.
It's got to be a positive element in this box.
It can't be anything.
But what I am saying is McDonald's is probably one of the most successful business models when it comes to food.
I mean I'm coming from Canada and we can talk about this restaurant easily and we can do a business model about it.
We all understand it.
So there's something working within this business model of franchises and sadly of fast food.
But if you have a superb product and you don't have a great business model you're not going to go very far.
So when you think of Apple in the 1980s when they weren't doing so great they had a superb product
but they didn't have yet the perfect business model.
It's only when same jobs came back and everything that they started realizing what the proper business model was for these products.
They reduced the number of products.
They simplified things and that's now Apple is now the most valuable company in the world or second where they were close.
They were first for a little while anyways.
And same thing with oil.
Oil not a great product.
I mean there's better than oil.
There's electricity but the business model of oil getting subsidies and getting out there in cars.
Great business model to get this commodity out.
So do you guys agree with me?
Do you see how this makes sense?
How first thing we learned was that to do innovation you don't have to change the product.
You can think about the business model.
And now second of all I'm saying well the product within the business model is not even the centerpiece.
The business model itself has value.
As long as your product is good if you have the right business model to pursue it it's better.
So yes.
Can you talk about oil as a business model?
Yes.
Is it possible to emphasize?
Sure.
Do you have to talk about it?
That's interesting.
What do you mean by social?
Social technology?
Yeah.
And we need like to provide actors, like what was the effort necessary in order to have a leading product.
Yes.
I never thought of it like that.
So the business model of oil is to produce it from very far away and to produce and then refine it at different steps.
And then at one point you sell it as a commodity in franchises that gas stations for example is probably where.
That's a good question.
Another thing is where does most of the oil go?
Does it go into our cars or does it go into something else?
Does it become the plastics that becomes our laptops?
Can you talk about business models?
Yes.
That's more like my question.
Yes.
So Chevron is usually the most successful business in the world is Chevron that makes oil mobile.
So that's why I mentioned it.
So I'm trying to it was in my point of saying that the biggest the most the best in business models aren't always about the best products.
Now I haven't thought about oil as the business model.
Yeah.
Have you?
Yes.
Good point.
And then we see some similarities between Shell and P, Chevron, XO, whatever.
And then we can estimate the average in the business model and maybe this is the point you're making.
So the business model of oil, of the global oil industry.
But then we can not only help another particular company and identify and understand why XO is only different from sales laptops.
That's a great answer.
Another question.
Yeah.
Yes.
Yeah.
Power plants.
Yeah.
Of course.
And now they're saying that the future of energy is distribution and everybody is going to be producing their own amount of energy.
And that's one of the reasons why windmills are solar is because people think that there should be windmill parks and fields.
And they're still in the mentality of a lot of production for that is distributed when this technology might be better itself distributed and more local.
Yes.
So these are things you're right.
This is the things that we have to think about when we're using a business model for the right technology.
Sometimes we create the technology before we figure out what the right business model is.
Yes.
And that's what we're going to be looking at today.
How can we change regular business models to more sustainable business models?
Now, why do companies innovate their business models?
Or the question is, why not?
Let's start with why do they do it.
And this is a classic Harvard Business Review about Christensen.
This is in the innovator's dilemma.
This is how the shifts in the basis of competition.
It's a classic, classic thing.
Let's take the example of the 1900 car.
OK.
It's the first Ford Model T car.
So at first he invented the car with product innovation because people were using horses.
And the car was incredible.
It was the new thing because horses get tired.
They have to eat food.
And they don't go as fast as cars.
So cars have these advantages.
But the early cars, when they started in 1900, were not so reliable.
The wheels would break.
The motor and everything would break.
So that was the next innovation into making sure that the cars were reliable.
And then convenience.
Cars were not distributed everywhere in the United States.
It started where Ford was in Detroit.
And then to get the cars into your small local community was difficult.
And then that's when the dealerships became more popular.
And they wanted the convenience of being able to buy a car and getting a car from one place to another.
And then comes the cost.
So every industry basically goes through this type of shifts of competition.
And as we said, and you rightfully said, it often starts with the product.
And then the process, or it's the means of getting the product out.
And then it becomes business model innovation that allows us to go down to costs.
So if you think about leader price or netto, the products exist.
But it's a new business model to have these types of stores and to create these labels and brands
where they can really reduce the cost because we're not even doing any marketing on these things.
So they're funding places to cut costs.
And that becomes a new business model.
So this is interesting because this is why companies, when I approach them now,
I sort of ask them, where do you think your product is?
Are you trying to sell at Walmart and your number one objective is to reduce costs?
Are you doing enough innovation that you're talking about new performances?
So I have this discussion often with companies to try to figure out
where are they in their shift of basis of competition.
And then once we agree on where they are, and often they're sort of here,
and I start telling them, well, let's do some business model innovation.
I'll get back to the other slide.
They start giving me pushbacks.
They start giving me reasons why they shouldn't be doing innovation.
So product innovation, business model innovation.
So they'll shoot the messenger.
What that means is that if you're in a company and you go see your boss and you say,
hey, maybe from now on we can do healthy food at McDonald's.
Well, he'll shoot you.
Then he might say something like, let's not change a winning strategy.
We're the best company in this product domain.
Why would we change the business model?
What's the return on investment?
I'm sure you've sort of this expression, ROI, return on investment.
So what's the return on investment?
Very difficult to determine beforehand in a new business model what the return on investment.
Sometimes you don't even have sales.
You've never met this customer segment, which is another element.
This isn't for our clients.
We're scared to propose new ideas to our clients.
Internet just reduces costs.
And sometimes businesses don't realize that internet changes the whole game.
Product is king.
People think that product is the most important thing and the business model isn't as important.
But I proved just a few slides ago differently.
It will be the next CEO's job.
Let's not cannibalize our offer.
You know what cannibalizing an offer means?
You have one offer and then the other one is so popular that it's eating up and no one's doing the old thing anymore.
And we shouldn't experiment with the market.
So that's old thinking that when you go out to the market, you know what you're doing.
But let me give you an example.
Windows 95, Windows 97, Windows 2000, Windows 2002, Windows XP, Windows 7, Windows 8.
This is all experimentation with the market.
When Windows came out, look at all the revisions they've done.
They didn't come out with the perfect product.
They evolved with overtime and they're experimenting with these product evolutions.
So these are all the reasons why companies don't change their business model.
Now, we have to understand the business models.
Sorry about the French here.
This is an image.
I couldn't change it.
But what's interesting about the business model is it goes to the core of a business in the sense that it asks,
why does the business exist?
Whereas services or the operations and practices ask, how are we going to deliver value?
Or how are we going to create value?
Or how are we going to create revenues?
The business model says, why are we in business?
Why are we doing these types of things?
And then we have products and projects, which is the third level, which is what?
Which is very quantitative questions and very around materials and around flows
and around things that we can manage.
So the more we move up, the more intangible the things are.
And the more we move down, the more tangible they are.
So this is just a little bit of thinking on business models.
Now, third element, understanding business models to innovate them.
We're going to start the workshop now.
The way it's going to work is I'm going to do an example with you guys about an espresso case.
And then after that, I'm going to give you guys each table will have a case,
and you guys will do the same thing that we'll have done as a group, but for your own little case.
So let's start with an espresso.
We're going to do it again.
Now, I hope that I can erase a little better than the first time, but...
Are there any coffee drinkers in the room?
Yes.
Yeah, can you?
So, are there any coffee drinkers in the room?
Yes.
How many coffees a day do you guys drink?
Two to three.
One, Miss Columbia.
How many coffees do you drink a day?
Three.
Anybody drink more than three coffees a day?
Yes, how many?
Depends.
An average.
Four.
Okay, that's nice.
Okay, anybody not drink coffee?
Yes, okay, some people.
Florian has at least six coffees every day, by the way.
Zero.
I don't drink coffee.
I had one coffee in my life, and I was so thirsty.
I was in an architecture expo.
I was so thirsty.
There was no water.
There was no bathroom.
It was in Venice.
And I was so thirsty, I said, just give me anything.
The guy said, I only have espresso.
It was a little illy booth.
And I said, okay, just give me it.
I drank it.
I was like, this is not refreshing.
And I saw the whole expo.
I read everything in the expo.
I was going crazy.
I had too much energy after one coffee.
Okay, so what is your benefit from drinking coffee?
You who drinks a lot of coffee, what's your benefit?
Awake.
Okay, any other benefits?
Good taste, yes?
Socializing.
Right.
Okay, I agree.
Okay, so I should write these down.
They'll come back later.
So we said socializing.
He is going to erase this.
We'll laugh when he erases this.
Socialize, we had taste, and we had feeling awake.
Oh, relax.
Coffee is relaxing now.
Okay, a break.
Yeah, okay.
I'll put it here.
Okay, feeling awake.
Okay, you can erase everything except this.
Yeah, okay.
Okay, so we're going to do the same exercise,
but this time we're going to talk about Nespresso,
the 1997 coffee machine that we saw.
Did you see yesterday it was on the campus, the little truck?
Yeah.
How many people saw the truck yesterday?
Two people?
How many people drank from the truck?
No, you didn't?
Okay.
Yeah, so let's look.
What do you think?
Let's not forget this is 1997.
We're taking 18 years step back or 17 years step back into 1997,
and we're working at Nespresso, okay?
And we're trying to look at the business model of how do we get this machine out
or this idea out of capsule coffee, okay?
So I'll start by saying that this guy there, heroes.
Okay, I'll start.
Florian, my assistant, please.
There's more.
Okay.
Good, thanks.
Yeah, that's fine.
So I'm in activities, and I'm going to start off by saying we created a patent.
Oops, one tea patent.
Okay, there's one tea in there.
So we created a patent for capsule coffee.
Okay, that's our starting point.
Now what is the value proposition that we want to offer with Nespresso?
Yes, exclusiveness, okay, I'll buy that.
So, okay.
So how do we make it exclusive?
Sorry, that's too fist.
Okay, how do we make it exclusive?
Okay, so, yeah.
Okay, that's one way to do it.
Yes.
Okay, so you're saying variety.
Yes.
24-hour service, what does that mean?
You can always order it, okay.
So 24 hours, so the channel is open 24 hours.
It's going to go like.
Well, she's the one saying 24-7, yeah?
Okay, so all right, 24-7 access.
Okay, yeah?
Yes, yes.
So you're working a la negativ, which is, so no big espresso machine.
Ah-ha, coffee at home, that's new.
Coffee at home.
Okay, good coffee at home, that's a value proposition.
Good coffee at home.
Okay, so if we're offering good coffee at home as our.
Yes, that's part of it too.
It goes in quick, easy experience, single cup.
Yeah?
Yes.
Easy to make, quick and easy experience.
What's our customer segment?
Who are we selling this to?
Professionals.
Who else?
Youngsters.
Youngsters?
Young professionals.
Okay, now what about young professionals, where are they?
Okay, if we're saying that we're trying to do it at home, what is the characteristics
of these young professionals?
They telecommute, are they work from home?
Yeah, home office.
Some of them work from home, not always, but if we take Florian, he gets to work from home.
He doesn't always have to come to the university.
Yes.
So delivery.
Aha, card.
So the card was a symbol of something bigger.
The card was a symbol of something bigger.
Yeah, but once you have the card, it's because you are a membership.
Okay, so we have the segments, we have the young professionals, we have the offices,
but there's another segment.
Let's not forget we're selling this for people at home.
We don't have time at home.
Sorry, heist wise, yes, okay, but that's not the one I was hoping.
Yes.
So let's put seniors, or I could maybe put even baby boomers.
Okay, yeah, so we have channels.
What are the activities?
Yeah.
Yeah?
Okay.
Okay, so.
I think they also work a lot, you know, and you can, maybe they are at home, or they have no time.
Yes.
They have no coffee in the coffee shop available.
Yes.
So they come home and still cannot pay attention to whatever.
So even we can't have it at 5.20, and then they...
Yeah, okay.
We got that.
Now, what are our activities as Nespresso, as a subsidiary of Nestle?
What are our activities?
What are we doing?
Okay, yeah, that's one of our activities.
Teach customers.
So let me put teaching in a relationship, yeah.
Yes.
Could you also say teaching, like, yeah, or people who normally bring the American...
Yes.
...to make them switch to, like, Nespresso or...
Yes.
Could I still put that in teaching as a relationship, that they're helping conversion?
Yeah.
Yes?
You were going to say, yeah?
You?
Yeah.
Yes.
So marketing is an activity.
Of course.
I agree.
Okay.
Yes.
Okay.
So, again, I'm sorry about the word communities here, but partners, we have farmers as partners.
So Nestle is not doing the farming themselves.
Let's agree.
Okay.
Now, what are their resources?
What are their resources?
Service development, so okay.
So does Nespresso make their own machines?
Do they manufacture them?
No.
Who makes them?
Seiko is a partner, and basically the machine manufacturers.
Okay.
So this is really important.
Nespresso has the patent, but they don't make the machines at house.
They have someone else who's already professional at making machines and managing the pressures
and how to make the parts and everything.
They have someone else for that.
Yeah.
Yes.
Okay.
Now, what do you think are the biggest costs of Nespresso?
Okay.
So the materials?
I would say that all the patent issue is the cost.
Patent issue?
The cost of developing the patents?
All the PhDs?
Or holding it?
Holding the patent?
The process of legally?
Really the law suit.
The lawsuit?
You mean?
Yeah.
There are several other manufacturers who want to...
Okay.
Yeah.
So a corporation which...
You're saying to defend their patent?
Yes.
To defend the copyright infringements?
Yeah.
It was costly.
And all the capital idea.
Interesting.
Okay.
I would say stores.
Stores.
Yes.
Marketing in general.
Maybe even stores.
Stores is maybe a part of marketing.
Customer service.
Okay.
Now, revenues.
How many coffee do we think that these people drink every day?
Four to five.
Okay.
Let's put an average of three.
How much does a capsule cost?
1997.
Give me a round figure of how much one capsule costs.
20 cents?
Today, but imagine at the beginning.
Let's put it at one euro.
Just before it was more than that.
But let's average one euro.
How much do you think the machine costs?
180?
400 or 500?
So let's go...
Let's put a range.
You think at Christmas it's more expensive?
Okay.
So one euro, three coffees a day.
That's three euros a day.
Okay.
Three euros a day.
365 days a year.
You have friends, so sometimes you have to have more.
So let's say 1,000 euros.
Is that fair?
Is that okay?
1,000 euros a year?
So in that first year...
What?
You don't drink coffee?
No.
Yeah.
So it's an average.
Three expressos a day, it's a lot.
Come on.
Three expressos?
No?
Okay.
So basically what we're saying here is that we have a three to one or three to two ratio
between the money we're making from the pods versus the money we're making from the machine.
Right?
Because this is a consumable...
We consume this, but this is something that's a one-time buy.
Okay.
So let's look at this Biz model, and now let's look at how close you are compared to what
I figured, what I found.
It's much cleaner like this, isn't it?
So let's look at what we have as an illustration of the Biz model.
This is the quality coffee at home is the center of their value.
They offer it to two types of people.
They don't say if they're professionals or not, but they say it's people working from home.
More and more people are working from home.
And a lot of people want good quality coffee at home.
This is my interpretation.
Baby boomers is my personal interpretation.
The first thing they did in 1997, and this is really good, they started a club.
Why did they start a club?
Because they didn't know if this business model was going to work.
Okay.
So I forgot to say, but the patent was 1986.
It took them 10 years to figure out how to get the product out in the right business model.
And it worked when they started with a membership because they wanted to know, are people drinking one cup?
Are we going to make money with this?
Or the people who are members, are they drinking 10 cups?
Are they looking for verity?
Are they always buying the same?
They had no idea how customers would react to this new product.
And a membership was the perfect way to get more information about their customers.
So that's why they did it.
And then, let's not forget this, in 1997, people could actually fill out a card.
Yes, and they would send it in the mail, and there would be someone who would take the card and bring it to the company.
They would analyze it and send the product to the person.
Yes, this was before the internet, 1997.
There was internet, but people would actually fill out on paper.
It's amazing to me now today.
You can even phone and ask for orders by phone.
So this was part of their distribution channel, was the means to collect the orders.
And the last thing they did was to start the stores.
And the stores are more of a marketing and positioning than today.
Yes, they're also about selling, but before, it was just about getting the product out there.
And then we have the activities.
This is the production of the coffee.
They're the ones making the capsules and putting the coffee in it, managing the membership.
Resources, what do you think they mean here by putting the billboard, and this is George, by the way.
What do you think that they mean by putting a billboard as a resource?
What is the resource?
The brand is a resource.
Technically, we can evaluate the value of a brand.
So this is a resource.
Using the brand, the Nestle and then Nespresso created brand, is a resource.
That's a learning lesson.
Marketing is not only an activity, it's also a resource.
The brand is the resource that marketing manages.
And resources are the factories and the distribution capacity.
It's their own distribution channel with distribution capacity.
And as we all saw, it's there not making their own machines.
And they have costs associated to their resources.
And it's funny that they don't put the costs associated to the activities when, in fact, there's costs associated to both.
But in this image, they don't say that there's a cost to developing the patents, and they're not saying that there's costs.
But whatever, it's an image.
And here we see a ratio.
They want to be making money from the capsules.
And this is a beautiful machine right here.
They're making less money from selling the machines than from making the capsules.
OK, so what I'm going to ask you to do now is I'm going to have two cases for you.
Has anyone ever heard of Wilcan?
No, OK, so we're not going to use that case.
So if you can help me distribute one of these per person.
Yes, Wilcan makes furniture like this table.
I don't know if they make that table, but that's what they do.
Now, I need two groups to work on Nivea, and two groups will work on GLS.
You guys, GLS is a bank.
You guys want the bank?
Make a decision.
You guys want the bank, or do you want Nivea?
Nivea, OK.
What do you guys want?
Nivea, oh, you guys got the bank now.
And you guys got the bank.
Too slow.
OK, so what I'm asking you to do in the next maybe 15 minutes maximum is to, oh,
I need the Post-its.
Let's take the, yeah, let's take the yellow Post-its.
There you go.
Whoever has the nicest writing, I'm going to be taking pictures of your work.
So I'd like the person with the, oh, sorry, yes.
Is there not Nivea in there?
No?
OK, I'll find Nivea for you.
Do you have two Nivea by accident?
Yes, OK, sorry.
So I'm asking the person with the nicest, most legible writing to write.
Yes, you have to use Post-its.
So the way it works, everyone, the way it works is that you write what you think the
company's value proposition on the Post-it, and then you put the Post-it.
Look how perfectly designed this is.
The Post-it fits right into the square.
Isn't that beautiful?
It took me a lot of time to figure out how to do that.
OK, so, and the way it works is you have questions on the back.
So what I suggest is that you have one that is open for the Post-its, and the other one
on the other side, if you have questions, look at it so that you can all have a conversation
about the same thing.
So if you're not sure exactly what do I mean by value proposition, it's there on the back, OK?
So I'm going to give you 10 minutes or about.
There's 10 spaces.
That gives you a minute per space to write what do you think the value proposition of
Nivea, what do you think the customer segments of Nivea are?
So write it all down on one Post-it per element, OK?
Is it clear for everyone?
The first, sorry?
Well, this maybe gives you ideas, but I agree that, and this one I didn't do much of.
Yes, you're right.
Yeah, there's not much information of the first element for you guys in that paper.
The other guys, yes, but not you guys.
Oh, sorry, use the yellow Post-its first.
Only the economic level, and we'll do the other ones after.
Good for you.
Good for you, because most people don't say that.
Yeah, there's nine squares.
Yeah.
Erase?
Shucks.
OK.
Ah, it's the whiteboard.
If you want, you can film people working.
No, it's only the blue section at first.
You have 10 minutes for nine squares.
So I'm not suggesting to look on the internet.
Go with your first feeling, and you can adjust later if you realize it's different.
If you want, usually this is more for the next two sections, but go from your feeling, yeah.
10 minutes.
It's really quick.
It's just, you know, what do you think the value proposition of a bank is?
It's a little general.
It's this bank, but no.
OK, but it's this bank, but it pretty much has the same economic business model as most.
Yes, after this.
OK.
Yeah.
Yeah, yeah.
Yeah.
You know what my biggest complaint about University teachers is?
They don't realize that students learn by imitation, the teacher.
So the way that I quickly do the work, do the Nespresso example, the way I quickly
do the McDonald's example is what I expect of them.
I find that university teachers never do that.
They never put themselves on the line.
But they never show what they want.
For example, imagine you're teaching students how to do a business case or you're going
to teach them all the theory of a business case, but you're never actually going to
do a business case with them.
So I want to make sure I can read your writing, right?
And let's use one.
Yeah, OK.
It's OK.
Yeah.
Yes.
Yes, you should because I'm going to be doing it again.
See, usually what I do is because I can't I was I'm surprised that I can't move this
guy.
Usually I can move them and I put them in a nice area and I don't have to now I'm playing
all the time with the two things.
You like it?
Yeah.
OK.
Oh, I didn't think of that.
I should have used that.
Yes.
Yeah.
But usually it's more beautiful.
I'm just concerned about the strings where it is.
Maybe I should go back to the red one.
You're really blue, huh?
Yeah.
But it's a different thing, so I'll try something like a bread.
But it's a flip chart.
It is a whiteboard marker.
No, no, flip chart is, that's a flip chart.
This is not a flip chart marker.
It might not be permanent, but this is not the right pen.
This is a whiteboard marker.
No.
Maybe.
Yeah.
No.
Okay.
Yes, okay.
Good.
Okay.
You guys have to move more quickly.
Yeah.
Okay.
Yeah.
Okay.
Yes.
Warm up.
Yes, comfortable.
It's not about you, it's more about it.
Yes, okay.
Yes, but, okay.
I think this is one exercise in itself.
Yeah.
I think one we should make a break.
Yeah.
And it's been the plan to move on to this.
Yes.
Okay, so before that you need to break.
Yes, okay.
Okay.
Yes.
Okay.
Yes.
TooO
You don't know me.
Ah.
No I have water.
Make sure I can read it, eh?
You don't have to film this part, it's...no, this is a workshop, but...
So you guys are done already?
Good for you.
How long do you say is a break usually in a class like this?
Ten minutes?
Is it that much?
Yeah.
Okay.
No, I can't do half an hour, we won't have time to finish, but okay.
Yeah, okay.
Okay.
Yeah, good idea, okay.
Okay, everyone.
Most of the teams are finished.
If you're not finished, you can finish, but this is now break time.
So if you want to have a coffee, instead of talking about having a coffee, you can now.
So it's 10.46.
If you can come back around just before 11, like 10.55 would be nice, so we can start at 11 the next exercise, okay?
So you're officially on break.
Good.