© Copyright 2005 By InnovationLabs Business Model Innovation Why the British Empire no longer rules the world.

© Copyright 2005 By InnovationLabs Business Model Innovation CDFI by Langdon Morris InnovationInnovation An Industry Searching for a new Business Model? Part Deux

© Copyright 2005 By InnovationLabs Business Model Innovation “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communications. The device is inherently of no value to us.” Western Union, 1876 “Everything that can be invented has been invented.” C.H. Duell, US Commissioner of Patents, 1899 “There is no reason anyone would want a computer in their home.” Ken Olsen, Founder Digital Equipment Corp., 1977 Predications …

© Copyright 2005 By InnovationLabs Business Model Innovation Cellular Phone market, USA, forecast vs. reality Forecast by McKinsey & Co. for ATT millions of units forecast: 900,000 units reality: 17 million units … are dangerous.

© Copyright 2005 By InnovationLabs Business Model Innovation Cellular Phone market, USA, forecast vs. reality Forecast by McKinsey & Co. for ATT millions of units forecast: 900,000 units reality: 17 million units End of the Line For Ma Bell Mother of All Telecoms Losing Independence By Griff Witte and Yuki Noguchi Washington Post Staff Writers Tuesday, February 1, 2005; Page E01 The $16 billion deal agreed upon yesterday that would bring AT&T Corp. into the fold of rival SBC Communications Inc. represents a final humbling for what was once the preeminent telecommunications company in the world.

© Copyright 2005 By InnovationLabs Business Model Innovation Where are you? Where do you want to go? Your organization’s name: Your name: Where do you draw the line between your existing market and your future market? What are the biggest obstacles you face: Does the chasm exist for you? Please put any other comments on the other side. Questionnaire

© Copyright 2005 By InnovationLabs Business Model Innovation Location of Respondents Questionnaire Wisconsin Ohio New Jersey Oklahoma Colorado Illinois California and others

© Copyright 2005 By InnovationLabs Business Model Innovation Where do you draw the line between your existing market and your future market? Questionnaire Existing market is small and getting smaller. We need to decide if we are willing to move into markets that we consider to be outside of our defined client base of CDCs. Once the line was drawn based on income level of population served. Now the ‘line’ is increasingly not drawn as we move into larger ‘target’ market. We aspire to develop deep, long term relationships with clients that will enable them to meet long-term financial goals. BUT we currently deliver one-time, discrete, episodic commodity services. More subsidy can mean reach and deeper impact, while standardization drives us to safer markets and irrelevance. Existing market: those without a choice. Target market: those with a choice.

© Copyright 2005 By InnovationLabs Business Model Innovation Questionnaire Attracting good people Capable people Capacity (people) Employee turnover (because of uncertain funding) How to offer high cost products in low volume business. Capital Capital for product Capital for operations Right kind of capital Questionable funding every year Time and money to do the research R&D capital Appropriate form of capital to move into ‘target’ market to cross subsidize ‘unserved existing’. And explaining this. Affordable capital. PeopleCapital What are the biggest obstacles you face?

© Copyright 2005 By InnovationLabs Business Model Innovation Questionnaire How to offer high cost products in low volume business. Creating standardized underwriting model Sustainability of corporate intent to serve the complete market Risk pricing Infrastructure Product delivery channels Reaching borrowers with services Ability to gain true understanding of “profitable” and growth market opportunities in new target markets Mortgage brokers highyl incented to push OperationsMarkets What are the biggest obstacles you face?

© Copyright 2005 By InnovationLabs Business Model Innovation Questionnaire Lack of clearly articulated vision / mission / strategy Lack of clarity on “where” CAP is, or what it is No internal planning / leadership development process or resources Leadership open to new ideas Leadership What are the biggest obstacles you face?

© Copyright 2005 By InnovationLabs Business Model Innovation Does the chasm exist for you? Questionnaire Absolutely Sure Yes Hell yeah! Of course Yes Banks ready to move into our market It’s huge! Yes

© Copyright 2005 By InnovationLabs Business Model Innovation The Unlearning Curve commitment exploration the moment of truth resistance denial unlearninglearning After Jaffe & Scott

© Copyright 2005 By InnovationLabs Business Model Innovation One STRATEGIC PLAN now one future reality

© Copyright 2005 By InnovationLabs Business Model Innovation s t r a t e g i c p o r t f o l i o now many options for many futures reality because the future is rational only in hindsight

© Copyright 2005 By InnovationLabs Business Model Innovation InnovationStrategy Collaboration Organizational Performance

© Copyright 2005 By InnovationLabs Business Model Innovation the current situation faced by the CDFI industry is an opportunity for collaboration, innovation, strategy design, and execution. And now … my nomination for the award for “Understatement of the Year”