Open Business Models

How to Thrive in the New Innovation Landscape

Henry W. Chesbrough

Publisher: Harvard Business School, 2006, 256 pages

ISBN: 1-4221-0427-3

Keywords: Open Source

Last modified: April 24, 2010, 1:05 a.m.

In his landmark book Open Innovation, Henry Chesbrough demonstrated that because useful knowledge is no longer concentrated in a few large organizations, business leaders must adopt a new, "open" model of innovation. Using this model, companies look outside their boundaries for ideas and intellectual property (IP) they can bring in, as well as license their unutilized home-grown IP to other organizations.

Now, in Open Business Models, Chesbrough takes readers to the next step—explaining how to make money in an open innovation landscape. He shows that companies have to manage intellectual property differently to innovate more openly. In addition, he provides a diagnostic instrument for assessing your company’s current business model, and explains how to overcome common barriers to creating a more open model.

Chesbrough also explores the impact of stronger IP protection on intermediate markets for innovation. He introduces a new set of players—"innovation intermediaries"—who facilitate companies’ access to external technologies. And he profiles firms (such as Intellectual Ventures and Qualcomm) that center their business model on innovation and IP.

A wealth of compelling examples showcase companies that have developed such models—including Procter & Gamble, IBM, and Air Products. These case offer valuable lessons for any organization seeking to open up its business model, including:

  • How to construct experiments to search for new revenue sources
  • Ways to use those experiments to gauge whether your company is heading in a more open direction
  • Strategies for scaling up your newly open business model to high volumes across your company ans its customers

This vital resource provides a much-needed road map to connect innovation with IP management. By navigating more skillfully through the open innovation landscape, companies can create and capture value from ideas and technologies—wherever in the world they find them.

  1. Why Business Models Need to Open Up
  2. The Path to Open Innovation
  3. The New Environment for Business Models
  4. The Impact of Stronger IP on the Business Model
  5. A Framework for Advancing Your Business Model
  6. Innovation Intermediaries
  7. IP-Enabled Business Models
  8. Getting from Here to There


Open Business Models

Reviewed by Roland Buresund

Bad ** (2 out of 10)

Last modified: June 29, 2008, 7:35 p.m.

Lots of platitudes and bull…

It's probably not worth the paper it is written on. It tries to explain why new business models are needed (and fails miserably, especially if you have read any book by Christensen), and tries to explain the importance of concepts of Open Source, while a few pages ahead discusses the importance of getting as much IP as possible (patents, trademarks etc., which not always square well with OSS). He then manages to give some examples that seem to give no credence to his loosely defined theories whatsoever, and manages to make a real mess out of it in the end, where he fails (obviously) to make a new theory out of his ramblings.

This is the kind of book that makes more damage than anything else, as some ignorant fool could believe that some of the ramblings have value.

And yes, I know that Christensen is giving it a good review on the back cover, but I like Christensen's theories, I don't care what he does for money and what his morale is.


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