Rod King

Communications in Mobile Computing

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King Communications in Mobile Computing 2012, 1:5
http://www.comcjournal.com/content/1/1/5ORIGINAL SUBMISSION Open AccessPlanning and managing disruptive business
models for RFID-startups-The disruptor’s arrow
of time
Rod KingCorrespondence: rodkuhnking@
sbcglobal.net
Ideal-Solutions Management, 1630
E. Shaw Ave., Suite 163, Fresno, CA,
USA©
L
pAbstract
This paper presents a one-page visual tool for adaptively planning and managing
potentially disruptive business models such as in RFID-Startups. The visual tool is
called “The Disruptor’s Arrow of Time.” The modular and iterative approach of the
Disruptor’s Arrow of Time overcomes a serious limitation of Waterfall Business
Planning, which rigidly focuses on a single chain of activities from planning to
execution. Unlike in Waterfall Business Planning, the Disruptor’s Arrow of Time uses a
business model as unit of analysis, planning, design, and innovation. The Disruptor’s
Arrow of Time uses a four-stage process for business model planning and
management. To illustrate benefits of using the Disruptor’s Arrow of Time, the tool is
used to present a case study on the systematic development and validation of a
disruptive business model such as for Zipcar, which is an RFID-startup. Zipcar’s
example highlights the flexibility and effectiveness of the Disruptor’s Arrow of Time
in adaptively planning and managing disruptive business models particularly in the
emerging epoch of the Internet of Things.Traditional planning and management of startups
In 1942, the Austrian Economist Joseph Schumpeter proposed a theory of innovation
which indicates that structural economic development arises out of the creative de-
struction or disruption of prior economic systems. In contrast to previous economists,
Schumpeter advanced the idea that innovative entrepreneurs and startups constitute
the disruptive force that drives and sustains economic growth. Nowadays, disruptive
startups are regarded as the critical engine of economic growth and job creation in
advanced free market economies. However, startups experience a high rate of failure.
According to the Small Business Association of America, 50% of startups die within
five years. Seventy percent of businesses die within ten years from birth.
The core cause of the high rate of failure of startups is attributed to Waterfall Busi-
ness Planning which is traditionally used to plan and deliver the products of startups
[1,2]. Waterfall Planning typically follows a linear process such as in a single chain of
activities: idea/concept generation, product development, product testing, and launch.
The author in [1] regards the Waterfall Model as suitable for established companies
that already have a validated and predictable business model: the product is known
and used in a financially viable market with established channels and customers. In the2012 King; licensee Springer. This is an Open Access article distributed under the terms of the Creative Commons Attribution
icense (http://creativecommons.org/licenses/by/2.0), which permits unrestricted use, distribution, and reproduction in any medium,
rovided the original work is properly cited.
King Communications in Mobile Computing 2012, 1:5 Page 2 of 5
http://www.comcjournal.com/content/1/1/5case of a budding startup, the business model is uncalibrated since the final version of
the product is largely unknown and the startup does not have an established channel
and customer base. In the latter situation, the startup has to adopt an experimental and
adaptive approach in order to discover, calibrate, and validate its customer segment as
well as financial viability of its business model. To date, however, many startups with
unvalidated products have focused on developing and executing business and financial
plans in the manner of established businesses with validated and profitable business
models. In short, many startups are using Waterfall Business Planning. Consequently,
many startups run out of money, time, and other resources before discovering and val-
idating a profitable business model especially in a volatile environment.
Traditional tools for Waterfall Business Planning such as a voluminous business plan
and detailed financial analysis are increasingly considered unnecessary for a startup that
has not yet discovered and validated its customer segment as well as profitability of its
business model. In the world of startups, especially in the area of disruptive technology,
there is a shift towards planning approaches that are agile and adaptive, have a strong
focus on customer growth, and use a business model as the unit of analysis.Business model as representation of a living organization
There are many definitions of the term “business model.” The author in [3] provides a
comprehensive review of the concept, approach, and definition of “business model.”
However, no definition recognizes a business as a living system that is described in [4].
Consequently, current definitions of a business model ignore fundamental properties
and attributes that govern competition, survival, and prosperity of living systems. In the
absence of a direct link to living systems, the large existing body of knowledge on living
systems cannot easily be transferred to the domain of planning, designing, evaluating,
and managing business models. This paper therefore takes a living systems approach to
defining a business model.
Here, a business model is defined as a story plot, visual representation, or dynamic
simulation of a living organization that viably pursues and achieves a hierarchy of goals.
A business model essentially presents a cause-and-effect logic of how a living
organization creates, captures, delivers, and shares value in an ecosystem. In human-
centered living organizations, the goal hierarchy of a business model can be derived
from or directly related to the mission, vision, and/or core values of the organization.
Every business model consists of three building blocks, which are summarized using
the acronym of “DNA:” Design; Needs; Aspirations. A business model can be visually
documented, analyzed, designed, evaluated, and managed using a DNA Map as in [5].
Additional file 1: Figure S1 shows a business model as a DNA Map at the highest level
of abstraction while Additional file 1: Figure S2 shows details of a business model at a
strategic level. These diagrams indicate the multi-level and fractal nature of a business
when represented as a living organization.Adaptively planning and managing the business model strategy of startups
According to [6], a business typically gains competitive advantage by using one of three
trade-off strategies: Overall Cost Leadership (Low Cost) Strategy, Differentiation Strat-
egy, or Focus (Niche) Strategy. The author in [6] considers the zero trade-off strategy
King Communications in Mobile Computing 2012, 1:5 Page 3 of 5
http://www.comcjournal.com/content/1/1/5of Low Cost and High Differentiation as possible but highly improbable to realize. In
[7], the authors identify Blue Ocean Strategy as a process that involves the simultan-
eous pursuit of Low Cost and Differentiation. The authors present case studies on a
number of companies such as Cirque du Soleil, Southwest Airlines, Curves, and Yellow
Tail that have pursued Blue Ocean Strategy and achieved extraordinary business suc-
cess. These aforementioned companies have used “Value Innovation,” which is the stra-
tegic logic behind Blue Ocean Strategy that is described in [7]. Value Innovation
focuses on breaking the Value (Differentiation) vs. Cost trade-off while creating an un-
contested market space. Additional file 1: Figure S3 shows types of business model
strategies in an industry.
From the perspective of Strategy, this paper focuses on three archetypal business
models for the success of startups: Low-cost Business Model; High Differentiation Busi-
ness Model; Blue Ocean Business Model. Each business model is associated with a spe-
cific type of customer segment and strategy, namely, low-end customers (overserved/
unserved; good enough technology; low profit margin); high-end customers (under-
served; high-end technology; high profit margin); Blue Ocean business model (over-
served/unserved; good enough or advanced technology; highly profitable Return On
Investment). In this paper, the author suggests that the process for using the Disrup-
tor’s Arrow of Time should be based on the Four-Stage Framework of Value Disruption
Design [5]. Stage 1 involves attractiveness and risk (“SWOT”) analysis of the situation
in an existing industry and environment (“Red Ocean”). In the second stage, the startup
decides whether to use a low cost, high differentiation, or Blue Ocean strategy/business
model. In the third stage, the startup should explore, calibrate, and validate its initially
selected strategy and business model for the disruption journey. After business model
validation, the startup can focus on the fourth stage of profitability, scaling, and defens-
ibility of its business model. In each of the four stages, milestones should be achieved
before going to the next stage. This “milestone” approach reflects a core principle of
Discovery-Driven Planning that is described in [8].
The disruptor’s arrow of time
The planning and management of a potentially disruptive organization involves four
Disruption Questions which are described in [5] as follows:
1. Why disrupt system?
2. What system to disrupt?
3. What system to disrupt to?
4. How best to disrupt system?
The four Disruption questions relate to the three question-tags of Why, What, and
How that are used for organizing information and knowledge in projects as in [9]. For
the planning and management of business model projects such as in a startup, the four
Disruption Questions are organized in the following list:
1. Ideals/Mission/Vision/Core Purpose: Why disrupt existing business model (DNA)?
2. Present: What existing business model (DNA) to disrupt?
3. Future: What future business model (DNA) to disrupt to?
King Communications in Mobile Computing 2012, 1:5 Page 4 of 5
http://www.comcjournal.com/content/1/1/54. Process (Strategy): How best to disrupt existing business model (DNA) in order to
obtain future business model (DNA)?
Additional file 1: Figure S4 shows a one-page template for the Disruptor’s Arrow of
Time, which visually summarizes the above questions. The Disruptor’s Arrow of Time,
which is described in [5], is a one-page visual tool for Value Disruption Design [5] and
in particular, universal storytelling, problem-modeling, problem-solving, planning, de-
sign, and innovation. As a worksheet, the Disruptor’s Arrow of Time is used to plan,
execute, and manage the disruption strategy and business model of startups as well as
established businesses. Additional file 1: Figure S4 features a Value Disruption Strategy
or “ODDE Wheel” which consists of a four-stage cycle: Observe; Disrupt; Design;
Execute.The disruptive business model of Zipcar, an RFID-startup
Founded in the year 2000, Zipcar is a membership-based carsharing company that has
its headquarters in Cambridge, Massachusetts, USA. Zipcar provides vehicle reserva-
tions and usage to its members, whom it bills by the hour or day of usage. Zipcar’s fleet
of vehicles has RFID transponders that are located on the windshield. These RFID tags
make it possible for customers to lock and unlock the doors of vehicles for their use.
Zipcar is currently a Publicly Traded company and has branches in USA, Canada, and
United Kingdom. It employs over 400 people.
Compared to traditional vehicle rental companies in the USA such as Enterprise
Rent-A-Car, Hertz, and Avis, the business model of Zipcar is considered to be disrup-
tive. Zipcar positions itself as being in the industry and business of “carsharing” and
not in the business of car rentals. Zipcar’s RFID technology allows it to offer a type of
service (online membership and wireless carsharing) that is unique in the industry of
renting and sharing vehicles. Additional file 1: Figure S5 illustrates diverse business
model strategies in the industry of renting and sharing vehicles.
Additional file 1: Figure S6 provides an overview of Zipcar’s disruptive business
model innovation which is in contrast to the sustaining business model of Enterprise
Rent-a-Car and Hertz. Zipcar’s Arrow of Time can be used for branding, positioning,
and articulating as well as adaptively planning and managing its disruptive business
model. Details of Zipcar’s validated business DNA model are shown in Additional file 1:
Figure S7. Although the business model of Zipcar is now validated, there are constant
changes and competitive threats in the environment. For instance, Hertz has started
using RFID cards instead of keys in its car rental service. Consequently, Zipcar has to
constantly review, adapt, and manage its business model. Additional file 1: Figure S8
shows the resources that Zipcar should use in order to achieve its value proposition and
mission. Tools such as the Disruptor’s Arrow of Time as well as business DNA model
and map would help businesses especially scalable RFID-startups such as Zipcar to
adaptively plan and manage business models in their lifecycles.Final remarks
In today’s highly volatile environment, traditional and linear tools such as Waterfall
Business Planning are ill-suited for planning and managing risks of startups that are
King Communications in Mobile Computing 2012, 1:5 Page 5 of 5
http://www.comcjournal.com/content/1/1/5inherently disruptive and have unvalidated business models. To increase the odds of
success for potentially disruptive startups, adaptive planning and management tools
such as the Disruptor’s Arrow of Time would have to be used. As a one-page visual
tool, the Disruptor’s Arrow of Time facilitates not only the presentation and articula-
tion of a startup’s mission, vision, and brand but also management of its strategy and
evolving business model. Additional file 1: Figure S6 shows an example of how the Dis-
ruptor’s Arrow of Time can be used to visually summarize the Value Disruption Strat-
egy and evolution of the business model of a disruptive startup such as Zipcar. The
Blue (Dream) Ocean Model of Zipcar strongly contrasts the Red (Nightmare) Ocean
Model of Enterprise and Hertz. Zooming in on the Blue (Dream) Ocean of Zipcar’s
Arrow of Time reveals details of Zipcar’s future or Blue Ocean business model, which
is shown in Additional file 1: Figure S7. In order to realize the desired results of Zip-
car’s Blue Ocean business model, a suitable project team would have to implement and
manage Zipstar’s business model strategy and tactics as shown in Additional file 1:
Figure S8. In the emerging era of the Internet of Things, the Disruptor’s Arrow of Time
will play a significant role in the successful evolution of potentially disruptive startups
especially those using RFID technology.
Additional file
Additional file 1: Figure S1. Visionary business model: Overview of the logic of a DNA map. Figure S2. Strategic
business model: Details of DNA map. Figure S3. Aspiration map for archetypal business model strategies. Figure
S4. Disruptor’s arrow of time: Template for value disruption. Figure S5. Aspiration map for business model
strategies in rental vehicle industry. Figure S6. Zipcar’s arrow of time for value disruption design of rental vehicle
industry. Figure S7. Zipcar’s blue ocean-business model in the USA. Figure S8. Zipcar’s disruptive business model
strategy & tactics.
Received: 9 August 2012 Accepted: 13 August 2012
Published: 13 September 2012
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Cite this article as: King: Planning and managing disruptive business models for RFID-startups-The disruptor’s
arrow of time. Communications in Mobile Computing 2012 1:5.


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