I was reading an article about Business Model Scalability by Felix Hoffman, CEO of BMI Lab, with whom FourWeekMBA put together a list of business model patterns mostly used in business model innovation, and I stumbled upon an image from the Disney Archives that left me speechless:
1957 Walt Disney Productions Archive
He understood how each piece fit well together.
This draw by Walt Disney was the engine of its business and – I argue – the most critical inheritance he left as a businessman.
I’ve been looking at it for hours, and there are a few key elements to notice.
At the center of the business, there were the theatrical films, where it all started. The Studios was the place where creative talent could be sourced and where original content could be created. This content would spur everything else.
From Music, TV, Publications, Merchandise, and where the success of Amusement Parks would depend on.
In this model, a flywheel made each piece fit into each other and reinforce each other. Indeed, as you can see from Walt Disney’s drawing, TV would plug movies into the studios.
At the same time, the studios would feed films through TV, which would pay them off via commercials.
At the same time, the Studios also provided an “interchange of stars” to TV, which in turn made it more valuable.
The TV side of the business would then be used to record materials and publicize music products.
The Music side would “keep films in mind when they were out of circulation.” Studios fed tunes and talents to the Music side of the business.
Other sides of the business also plugged movies into the Studios, while the Studios allowed the publications of books and comic books and allowed the publications of the Walt Disney Magazine.
Other parts, like Disneyland, which might have seemed at first sight disconnected from other parts of the business, were a crucial element in Disney’s flywheel success.
Indeed, the Studios plugged parks, rides, and creative ideas.
At the same time, Disneyland could provide ideas to the Music side of the business for new albums, source articles for the magazine, and have a tight interaction with the Merchandise Licensing business.
This holistic approach is at the core of business modeling. I believe that each business person trying to build a great business should have in mind a clear design and vision, of how the flywheel framework makes the business sustainable in the long run.
It doesn’t matter what methodology – if any – you’re using. What is your vision for your business? Do you have one? If not what is missing? How is each part fitting into each others? How do they help each other grow? Is the process scalable?
Asking those questions might allow you to find the proper answers to build a lasting and sustainable business model.
- Walt Disney’s Vision: In 1957, Walt Disney created a drawing that depicted the core business model of his company. This design remained the foundation of Disney’s business for decades.
- Central Elements: The drawing highlighted key elements at the center of the business: theatrical films and creative talent from the Studios.
- Interconnectedness: Disney’s business model had interconnected components, with each piece fitting together to reinforce the others. For instance, TV would plug movies into the Studios, and TV would pay for movies through commercials.
- Flywheel Concept: The business model acted like a flywheel, where each piece fed into and strengthened the others.
- Holistic Approach: Disney’s business model included various parts like music, TV, publications, merchandise, amusement parks, and more. Even seemingly disconnected elements like Disneyland contributed to the overall success.
- Importance of Vision: The holistic approach to business modeling is crucial. Business leaders should have a clear design and vision of how each part fits together to create a sustainable and lasting business.
- Inspiration for Others: Airbnb’s business model took inspiration from Disney’s approach. Airbnb created a platform business model charging guests a service fee and hosts a commission.
- Airbnb’s Business Model: Airbnb charges guests a service fee (5% to 15% of the reservation) and hosts a commission (generally 3%) for bookings. In 2021, Airbnb generated $6 billion in service fee revenues from $46.9 billion in Gross Booking Value.
- Airbnb’s Organizational Structure: Airbnb follows a holacracy model with a flat organizational structure. Teams are organized for projects, maintaining a lean and flexible approach.
- A clear vision of how components fit together is essential for business sustainability.
- Business model components should reinforce and support each other.
- Learning from successful models like Disney’s can inspire innovative business approaches.
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