Simone Cicero 

Welcome back to the Boundaryless Conversations Podcast. On this podcast, we explore the future of business models, organizations, markets and society in our rapidly changing world. Today I’m joined by my usual cost, Shruthi. Hello Shruthi.

 

Shruthi Prakash

Hello everybody!

 

Simone Cicero 

And we are thrilled to welcome our guest for today, entrepreneur and teacher who has spent her last more than a decade exploring how business models, sustainability, innovation and data connect. Jen van der Meer. Hello, Jen.

 

Jennifer van der Meer

Hi Simone, hi Shruthi.

 

Simone Cicero 

Thank you for joining us. Jen is the founder of Reason Street, a consultancy specializing in business and financial model innovation, and also an assistant professor at Parson School of Strategic Design and Management, where she also co-directs the Impact Entrepreneurship Initiative. Jen and I have known each other for a few years. think Jen was one of the pioneers of users of the Platform Design Toolkit. 

 

And we met online when she started teaching at Parson. And undoubtedly enough, would say that I love Parson Schools of Design because they are the ones that hosted our first and unique platform design masterclass in New York so far, I think in 2019, if I’m not wrong. So always good to remember. 

 

I mean, you have been at the forefront of pushing businesses to think beyond profit towards more impactful and ecosystemically viable practices, let’s say, and a few weeks ago, after watching a video of yours discussing tendencies and evolution of business models, I immediately thought that it was a good idea to have you as a staring partner in this conversation about how business models are evolving. Why so? Because many times, in our experience as designers and advisors, we feel that business and financial models have provided very narrow and constraining frames to our ambitions in terms of thinking about organizations, institutions and innovation more in general. 

So the first question for you, I think, would be interesting to get your point of view on, know, and give our listeners some kind of history of business models. So trying to explain how things have evolved in the last, especially in the last decades where digital have entered the space.

 

Jennifer van der Meer

Great. Yeah, it’s one of my favorite things to talk about. And I must reveal at the start that I was a bit tiny player in the evolution of the first real business model. I think before the early internet, we conceived of business plans. We would develop financial models inside of spreadsheets, all the evolutions of the tools of spreadsheets. And we wouldn’t really talk about business models. And the beginning of everything was very much the Netscape IPO in the mid-90s. 

 

I was an analyst in a small investment bank that was part of what’s called the syndicate of banks that took Netscape public. And what I experienced on the inside of that story, there’s been a lot said about the outside of that story, which on the outside was the most exciting initial public offering in a long time, created billions of dollars out of seemingly nothing for the founders and funders. Everyone wanted to get in on that deal. 

 

We had people calling the bank to try to invest. It was Time Magazine, excitement. It was the first technology that represented a way to get to the internet. And so it ignited imaginations all around. It wasn’t just a wedge of the technology field that was excited by it. But on the inside of that story, we were looking at what we considered pretty flimsy filaments of a business story.

 

They had a couple of different revenue streams. They seemed more experimental than solid. They were less than a couple of years old. Their revenue streams were exponentially, you know, they had hit hockey stick growth. They were scaling, but they were still carrying forward other revenue streams, consulting and integration and implement things you would not see in a modern business model. And on the inside of that story, we were just trying to figure out why it should be valued, what it was valued at.

 

And we were fairly, as was common to the time, cynical Wall Street people who just said, whatever, get this thing out the door. It’s gonna pop on the markets. We just have to do our work as an analyst afterwards, sort of justifying,  or at least providing the thinking for why this thing should be valued. But the inside story was that this was gonna be a very short story, a very short nonfiction story.

 

Everyone knew that someone like Microsoft would just come in and knock Netscape out, and they did within a year. So it was a brief story. For the founders, they’ve gone on to do quite well, so I’m not worried about them. The founder being Mark, the main one being Marc Andreessen is more known today than James Barksdale. But it was quite a phenomenal moment. And all practice, all scholarships since that time points to that moment as the beginning because it was the first time the possibilities of internet and connected technologies created so many variables for so many options. 

And if we looked into the spreadsheet of that time, we had way more variables to input, way more possibilities, and we would extrapolate against the future total addressable market of everyone that could get on the internet. And that was 7 and 1 billion people back then, I think 8 billion now.

 

It’s what caused this sort of Cambrian explosion of possibility that didn’t exist the year before when we were looking at semiconductor equipment or disk technology or retail or something that was physically bound in time and space that didn’t have that ability to kind of go everywhere all at once, everything everywhere all at once. So it was a really phenomenal time and it was all story with a little bit of reality. 

 

And it was a collective work of nonfiction. So I tell that story just to remind people that that’s what business models still are today. And a lot of what we’ve just witnessed in the zero interest rates scale up of tech and valuations and the pop and recede and the thing that we keep going through over and over again, it’s the separation of the kind of tangible, countable cash flows that run through these businesses and the narratives that elevate them up to these sky high, wild valuations that don’t have, they truly don’t have a semblance in what we call reality, but we create, we continue to create these collective creative non-fictions. It’s driven primarily by excitement, aspiration, optimism, and also financial interest. I can keep going to, you know, like went on from there, but I’ll pause if you want to just ask questions about that.

 

Simone Cicero 

No, I I feel that you’re making the connection, two connections in this first answer. One is a connection between a business model and its market or financial architecture, let’s say. So you connected this to an IPO, for example. So I guess that, again, there is this connection between the two things, the business model, the size of the market, the financial incentives and in general the story of the capital that is both needed to run a business model, which I think it has an impact, but also the capital, the story of the capital that has been collected. 

orientation into these ages and frames and types of business models.

For example, if you collect capital from certain stakeholders, you probably have to return capital and things like that. So first point, connection between financial models and business models. And the second point that I perceive is a connection between business models and platform shifts, let’s say. 

 

So you spoke about Netscape and that’s the internet shift. And then probably, and I’ve been listening to some of your materials and you also connect business model evolutions to the mobile age and now more platform shifts that are happening. One we are into now, which is the AI, probably platform shift and maybe the sustainability platform shift. Can we maybe start with the evolutionary stages of business models, just to give our listeners a little bit of a possibility to frame themselves into a story of business models, and to some extent also to a taxonomy of business models, if you can maybe unclog a little bit of fog from the picture, trying to give them an orientation into these ages and frames and types of business models.

 

Jennifer van der Meer

Sure. Yeah. So I’m going to go in time eras because the tech changed, but the finance stayed the same. So from Netscape, within a few years, I’d gone to business school, came back and decided to leave finance and jump into the arena of internet building. So I was at one of those dot com consultancies that built a lot of tech. And we would answer the phone and suddenly build a new business for a company overnight, but startup, and you know, incumbents, and you’d be able to quickly raise $100 million back then, which back then was a substantial amount of money, it still is today, to build these, you know, these dot com companies. 

 

And now we know from the history that that was a dot com run up. And then in early 2000, a dot com bust, it was like a nice clean up and down in valuations and, you know, complete catastrophe. Everybody that ran into the internet, like suddenly couldn’t get jobs. And it was kind of like a shameful moment in a global business, where if you had that, if you were one of those silly, silly people. 

 

And so that’s when we first started to write about business models academically. Joan Magretta at Harvard Business Review wrote one of the first most common definitions, is business models are stories for how businesses work. But she was critiquing all of those dot-com leap from reality business models that hadn’t really figured out that they couldn’t get to all the people all at once. That maybe that what we needed were frameworks to think about the economic reality of these businesses that we couldn’t just do hope and a pray, know, essentially build it and they will come organizational strategy building, you know, practices. So like that was really Era 1 was blind leap of faith. The business models that we built were in the form of plans back then, but they were really like imaginaries. They were not based on anything tangible.

 

And that was one. And the models that kind of came out of that time were almost all advertising because we had these concepts of monetizing eyeballs. So folks would grab audience and then see what they could do with it. And what they could do with it was advertising. 

 

The second wave I see is the Google/Amazon wave of kind of who both Amazon was part of that first wave. They did an initial IPO. had to be almost failed to thrive, but they did a nice financing deal to kind of keep them in the game. But really the ones that were strengthened and built in that dot-com bust area were more first principles in how they built their models. So this is Jeff Bezos sitting, originally sitting in his investment bank in New York, a very quiet investment bank before he started. Amazon really imagining like, what’s the best possible format to take advantage of these scale-up curves that I’m seeing?

 

And then him running experiment after experiment with his team as he built what became kind of the modular approach to business models. And Google, who had Eric Schmidt on their team figuring this out from an auctioning perspective. the two, I can respect them and critique them forever, but in terms of business model innovation, these are the folks that really took it to the extreme and really used incredible economic thinking to run these experiments and test their ideas and do really novel shifts in how to take advantage of the digital platform age to combine and recombine all these reinforcing loops within the ways they were making money. These weren’t the engineers in the company doing this. It was very much these business and economic minds, even though Eric Schmidt has an engineering background. And so that was like, you know, the next era and the companies that came out of that and those companies have been super hard to dislodge. 

 

And then we had the companies that were born out of the crash of the financial markets of 2008, which were, I would say like Airbnb, Slack, Uber, all fascinating companies that weren’t following the dot com playbook of build it and they will come. They were minting a little bit of cash on every first turn of the wheel. So Uber early days made money off of those black car rides. Airbnb made money off of their first experiment renting out a mattress, an air mattress at the Industrial Design Society of America conference in their loft apartment in San Francisco. So like they didn’t have to raise a bunch of venture capital to see if they could make money.

 

And these were fascinating ways of thinking about that micro experiment to macro scale up. And they all learned everything they had to know about two-sided, multi-sided markets and how to generate liquidity on all sides. These days they have economists employed as all of these companies do to figure out these market dynamics. But that was a shift. 

 

Spotify was a shift the idea that you would subscribe to music and not just expect it for free. So what was true in that time was a whole bunch of companies that didn’t fully rely on freemium as the primary driver of some kind of audience building mechanism. Commerce, some kind of commercial transaction, was the way that you first interacted with one of these models. And so that was the next wave. We call that the marketplace era or the Uber of everything era. And you saw everyone trying to Uber everything, but only Uber and a few others were able to pull that off, although now there’s many, many marketplaces that essentially follow the same playbook. 

 

And that brings us to the zero interest rates era, where everything was possible all of the time, and people got money for things that wouldn’t have even passed muster on the dot com era.

 

Simone Cicero 

Suddenly you didn’t need a business model at all.

 

Jennifer van der Meer

You didn’t at all, you didn’t even need a slide. And so I would even see critique on Hacker News. You’re like, my gosh, this person said that they don’t even think about it or on VC Twitter. Why is someone even asking about that? That’s a sign they don’t know what they’re talking about. And the practice of building a company then would simply be a simple spreadsheet that said, are the amount of engineers that I need over this much time with no quantization of what any kind of customer moment would be at all. 

 

Just build, I’m going to get some stuff out there and I’m going to see what sticks. And so, you know, we can now see exactly where most of that stuff went. The occasional company that went in that vein, you know, emergently stumbled across an opportunity and capitalized on it. But most, you know, most of those companies either failed or actually had a successful IPO and maybe even were exited to company but have since been written down. In other words, best example, Teladoc buying Livongo, a diabetes tech company, something I know pretty well, for billions of dollars only to write it down. Say it’s basically worth nothing on the books, just no value. Buying into the financial hype of it, but the actual core customer revenues and possibilities of revenue and the cost structures around delivering that value. It never made sense at the beginning. It didn’t make sense at the hype and it doesn’t make sense today. 

 

So like we’re recovering from that incredible distraction of the markets. And I like the time we’re in now. I liked the time after the dot-com boom. It feels to me more tangible. This is just my orientation. So I love the work right now. I struggled a little bit with those last two years of zero interest rates to help people. But we’re in that stage of

 

There’s a corner of hype, which is AI, which is operating in the same kind of vein. And then everybody else has to prove some kind of understanding of how economic value would flow in their models. And then we have these massive grand challenges we have to face, these complex issues, these big transitions and transformations we have to make. And that’s where the innovation is really opening up and folks are seeing it’s beyond these kind of narrow business model lenses and the current venture capital ways of thinking and trying to imagine multiple capitals, multiple ways of organizing. And that for me is like just super exciting, gratifying. And it’s kind of where my practice is focused today.

 

Shruthi Prakash 

So you’ve already sort of touched upon this a bit, but I think it can benefit from a bit more of clarity. So we spoke about how, let’s say capital structures and the patterns that it follows impacts the business models. Like one of the early statements you made also was the tech changes, but finance has sort of stayed the same over the course of the last decade or so on. 

 

So how do you think, let’s say the approach of the different capital structures, its categorization and organization, how this capital flows across the organization impacts the ecosystem’s shape, impacts the design of the business model and are each of them a constraint to one another in its process.

 

Jennifer van der Meer

Yeah, so I mean, from my perspective, and again, is lived experience having been on that first Netscape story, what I see over and over again is that all of the kind of modern, you know, in quotation marks, business models, software as a service, marketplaces, you know, interesting platform structures, pay per use, all these different variations came out of investor recommendations, investor expectations, investor desires for what is extremely useful to an investor, which is more predictable revenue streams, more predictable cost streams, and the ability to understand the unit values of scale. These did not emerge from engineers who were thinking about, let’s try this different way, and made that happen. It very much was driven by a financial mindset of “if I put a subscription model in a spreadsheet, with some kind of cost around a unit economics of that subscription, I can see that an investor can really help there”. Because in that first year, there’ll be a huge investment to get it to where it needs to go. But if I get through what’s called the J-curve, that kind of spend curve, waiting for that $10 a month subscription to turn into that $4,000 lifetime value or whatever it might be, it’s a perfect role for an investor to play. I’m going to finance that dip and get them on their way. 

 

That’s what the kind of software as a service focused venture capitalists loves to think about and then get very expert in all of the mechanisms in that model and how to give advice and shape how the founders think about how to tool that system. So all of the kind of business model patterns and archetypes in academia, it’s kind of like, it’s kind of described, they describe them and they categorize them. But from my understanding and experience, like it’s rarely connected to the financial logic that that determine those in the first place. we still live, business models live inside of capital expectations. And those capital expectations are very much venture capital in the pre IPO and then exit valuation logic in M&A, mergers and acquisitions and early public markets, which as we see when these companies go public, all of a sudden, it might hang on to their value for a day or two and then falls down to nothingness and maybe gets what’s called delisted or kicked off the NASDAQ market. 

 

Very different mindsets for what the expectation of those investors are for those companies. So business models, and this is again, I think under theorize, I teach in a design school, I’m trying to write more theory. I think that this is where we need more theory. 

 

Like live inside of of financial logic, financial mental models. And they go in waves and they go in trends. And the work on my website is simply to document those because people were like, my investor’s asking me to do a hardware as a service model. What even is that? And so I didn’t just invite the conversation to say, here’s why your investor is asking for that.

 

Shruthi Prakash 

I’ve read some of your pieces before as well. And, you know, one of the, let’s say differentiating factors that I saw was that you see, let’s say capital beyond finances as well. Right. Maybe in the concept of how it impacts, like different forms of capital, essentially like social, environmental, intellectual, and so on. So how do those sort of play out in this?

 

And even in terms of measurement of success, right? Like how do you assess the outcome of a particular investment? Are people already seeing it beyond, let’s say the financial return, maybe in terms of social equity or ecological impact and so on? I know that’s a passionate field for you as well. So we’d love for you to touch upon that.

 

Jennifer van der Meer

Yeah, so I think the way that we talk about business models in this space can be super constraining. So I encourage people not to use, it’s very often in this moment, a bunch of people are sitting in a room from maybe multiple sectors, foundation, nonprofit, some kind of startup, working together on solving some complex challenge. And then there’ll be this ellipses, dot, dot, dot. we need to figure out what the business model is.

 

That’s kind of sometimes put on the shelf and then given to whoever’s ever the for-profit people, the venture funders or the entrepreneurs to go figure out on the side and then come back to the larger group with this will be the model of something like cooling as a service, something like how are we all gonna get air conditioning on an outcomes basis or something like that. 

 

And so I encourage people to actually use kind of first principles words and thinking to describe what is the finance we need and what is the economic structure that lives inside of a market where there’s customers and people paying for value in the market sense. And then the value we create outside of market structures in government, nonprofit, civic society, foundations, where people every day are making decisions to allocate capital and fund initiatives, projects, and services that don’t fall inside of that market logic. And more and more of our lived economy, the decisions are being made from that perspective. And when we go through what we all went through with the pandemic, we saw that happening in different countries at large scales. 

 

And it’s been so fascinating to be situated in the US but still connected to other parts of the world where the US, implemented this huge industrial policy after not believing in industrial policy. You can get hundreds, you can get huge grants from the National Institutes of Health to solve grand challenges. Big Inflation Reduction Act investments in carbon transition in, know, tens, hundreds of millions. Large scale design of tax incentive structures that fit inside of business models, like renewable energy credits that help that show up in the business models of solar arrays and wind farms. 

 

And so a lot of our thinking and decision making about what gets funded is now being put through a lens that is not a for-profit return business model. But we don’t have the same archetypes and lexicon that the venture capitalists were so much more deliberate in talking points and socialized around that we all kind of struggle each time to decide what the pattern is and then tend to fall back to the in-market business models to be the frame through which we make decisions. It’s just, it’s like very time-wasting and things get lost. And there’s, you know, in terms of a marketplace of ideas to funding, it’s not a liquid market. So I’m, I’m interested in like that space, but like that’s, that’s the space we need to define, innovate, practice, form patterns and archetypes around, and be really honest with each other about like, you know, hey, that business is heavily dependent on some kind of taxpayer benefit or that healthcare business is dependent on Medicaid, Medicare, which is, know, a government defined service. 

This is in the US and I can talk about other countries as well. 

 

And so again, business models described by financial logic to get an expected future cash, discounted cashflow return is a way to think about company valuation is not such a great tool for what we need to invest in from a health and climate transition perspective. So it’s blank slate, spend a lot of time with folks really defining what those values and value are. And then the spreadsheet building process just acknowledges that we’re not only gonna get to some valuation or just cashflow or future projection of revenue streams that we need to quantize impacts and quantize outcomes.

 

Shruthi Prakash 

I was just thinking about our conversation last year with Arvind Gupta from India, and he spoke about digital public infrastructures, essentially. And that was a core topic of discussion from our side last year on how essentially it’s sort of a participative ecosystem along with communities, governmental partners and things like that. it’s interesting to see that direction unfold at a larger scale as well.

 

Jennifer van der Meer

Yeah, DPI. Yeah. I I, I, I’ve participated in a couple of these and a foundation in, Amsterdam foundation for the public code and have a long time collaborator at Ford foundation, Michelle Shevin, who thinks about this work. and I was invited to talk to a government group about, the question was, what are the business models of government, especially as we consider things like digital public infrastructure and goods and the, the government folks were, don’t you dare, don’t you dare bring business models into this conversation. 

 

If we refrain and frame and reduce the decision processes to only fit through what the business logic will be, we will not be able to deliver digital public infrastructure. And so we spent the time understanding our different mental models and design processes of how we roll out new tech, you know, to just acknowledge, yes, this is where business models need to be understood because digital public infrastructure needs to exist within and among the ecosystem of tools that also live in markets. 

 

But the actual logic we use to determine how to invest, sustain, and maintain the code bases, the open source projects and the kind of community engagement around those projects, like that can’t be only put through of lens of, know, generating some surplus and return. 

 

And so I mean, completely subscribe to that. And I think it’s, I find it really dangerous when people say, we’ll just kind of wait for the business model to show up. We have to acknowledge that like, you know, standard market logic doesn’t work when we’re trying to figure out how to, you know, transition to stronger digital public infrastructure and things like that, you know, ways of thinking through disease models. There’s many examples, ways of, stewarding data cooperatives. Many ways where we know we need something that’s moving towards the public, but we don’t quite have the patterns and archetypes and logic to think it through.

 

Simone Cicero

This conversation connects with some earlier writings that we did on our blog, for example, when we explored how stakeholders can self-organize around a production chain – the idea that, for example, let’s let’s take a solar farm or something like that. The solar farm exists, of course, inside an environment that includes regulations, incentives, credits, as you said, policies that, to some extent, create a set of forcing functions around that asset, the solar farm.

 

But also you can also create an institutional agreement for all the stakeholders around the solar farm so that they don’t necessarily have to go to the market and therefore subject their entrepreneurial initiative to the rules of market-driven business models. But they can also, for example, self-consume what they self-produce and manage the infrastructure as a or common, something that is managed by them, for them. 

 

And this is just an example to say that I think sometimes people lack the overall understanding of what a business model is or in general, what are the value flows that exist around something that produces an outcome. So for example, you have capital expenditures, have operational expenditures, have flows of value that go outside and can be maybe exchanged and monetized and flows that can be consumed internally. 

 

Maybe people can invest upfront and consume part of the outcomes, receive part of the outcomes as an interest. So I’m curious to see if you are also seeing, what are the new things that you are seeing connecting, let’s say, the technological advancements that we are seeing in the market? So for example, AI, AI has a massive potential to reduce operational expenditures when we run any type of business, right? 

 

Because it draws today, yesterday, anthropic released computer use, which is a way for computers to basically run processes. so we can expect that this is going to have quite an impact on operational expenditures to run any type of business, right? On the other hand, we have blockchains and blockchains are maybe tools that you can use to collect capital in a different way. So these technologies are impacting the space.

 

On the other hand, we have new regulations coming up that create different environments for institutions and business models. So are you seeing new approaches, especially something that doesn’t have corner shop sides that you want to talk about. So what are the key innovations that people can get excited about and try to replicate?

 

Jennifer van der Meer

let’s go back to the way that folks talk about business models, is, it’s one of those disciplines where each paper starts out with, we can’t all agree on the definition, but the, and no one will agree to it. But it essentially has something to do with value capture. 

 

There’s value propositions and capital expenditures. There’s some kind of flows of money and some kind of resources and activities and we can go back to the Osterwalder canvas as an example of the canonical ontology of what they are. But the value capture piece is what tends to frame all the logic when we think about business models. 

 

And we’re talking about this like say an attempt of a community to have solar that they raise themselves that they kind of, invest in and figure out the flows of value. But then, you know, that value capture moment for them may not be important at all. 

 

They might want to take whatever, what I’ll just call surplus that comes out of that model and reinvest it back in community. And so I actually think that’s the, it’s not a technical innovation or a financial innovation. It’s a mental stream saying, okay, if we don’t have to have value capture if we don’t have to return value to an external stakeholder who is an investor or a debt giver, what do we do with that surplus? Do we wanna design for that surplus? Do we wanna design for other activities happening inside of this solar farm that might be about, and I’ve seen this in like Sunset Park in Brooklyn, an environmental justice organization, designing the job training program.

 

We’ve seen this at scale too, and we’ve already seen positives and negatives as people try to figure out these interlocking training systems and environmental justice transitions and bringing everyone along and acknowledging land and really interesting land use. But just that shift in the purpose of a business model is to aim for value capture to let’s design for some level of surplus or decide to fund some level of deficit that that’s the framing logic we need in some of these, let’s call it like deliberately non-investor spaces. 

 

And then when you think like that, that is first principles thinking, you can then design back in ways, know, carve back in those venture capital opportunities, but from a total frame where you’re saying, we’ve got a lot of stuff that has to happen in this community to make it go through a successful transition to a resilient future, you know, like what I call like the hurricane test.

 

Did we invest in things that allowed us to survive the next hurricane? And only some of those things, maybe a tiny fraction of those things are gonna be venture investment worthy. So how do we make decisions for everything else?

 

Simone Cicero

Right. I was thinking that sometimes we people speak about regenerative business models, for example. And just hoping that if you don’t change anything else, so you still want to have capital returns in sound money and whatever, you want to remain in a traditional frame of investing and getting money on the other side.

 

If you don’t value other types of values, sorry for the repetition, you want to have a different regenerative business model. So essentially you’re going to have regenerative business models or resilient business models, or I would say resilient value production models or regenerative value production models only if you value other outcomes from the system, which could be again, regenerative outcomes. So for example, system health or resilience and something like that which have not an intrinsically traditional money value, let’s say. 

 

So that’s the point of the connection I was making in my mind. So if we don’t shift what we want to obtain from a certain process, we’re never going to achieve a regenerative or resilient business model because we’re going to just default on this needs to have a business model. And therefore, the system will be optimized to produce returns for capital or revenues or things like that.

 

Jennifer van der Meer

Exactly. Yeah, and I think some of the thinking of sustainable business models, resilient business models, we have to be careful that we’re still not subsuming all of those other values and some would say capital types, cultural capital, social capital, environmental capital, underneath the financial capital as the dominant capital. And so I try not to use sustainable business models and resilient business models. And I don’t use that taxonomy because sometimes the sustainability logic, the resiliency logic, isn’t financial logic, it’s not value capture logic. So I actually try to deliberately separate it. I tend to call all of that other stuff that’s non-financial contribution, designing for contribution, and that contribution can be positive and that contribution can be negative. It can be replenishing soil through regenerative agricultural practices, and it can be depleting our health and our ability to reproduce through microplastics. 

 

And so we want to know in any business models, what those contributions are and that’s where we’ve really struggled in business and in finance to make sense of how we think about, count, and demand transparency over those non-financial contributions, positive and negative. That’s where the whole industry is stuck right in.

 

Simone Cicero 

Yeah, I second to this idea of not calling them business models because they’re not business models. They are different type of models, which are not business because business by definition is something that needs to work in the capitalist market driven liberal markets, which is great. But probably if we try to take something that generates different value and try to cast it in the shape of a business model, it’s exactly the kind of frame that we’re talking about the start, that constrains what you can do or what you cannot do. So maybe sometimes people need to be a bit more ambitious in terms of, again, thinking beyond business models and therefore considering other types of value in the system that designed. So I think that’s a great point.

 

Jennifer van der Meer

Ooh, yeah, now I can answer your innovation question. I I think it’s both innovative and it preceded us as a platform cooperative thinking. It’s kind of founded also at the New School, shout out to Trebor Scholz who runs that whole initiative. It’s a way of thinking through cooperative ownership structures in platform economics. 

 

But in that practice and that work, we are always looking back to the kind of, frankly, solidarity, mutuality sometimes socialist, black organizing that happened when it occurred in the US. I know there was precedence in the UK as well for cooperative ownership. But that’s where people were organizing in a way that was not inside of a traditional business structure where ownership was determined to be shared. Decisions have the different types, but very often trending towards more democratic, less centralized. A lot of economic activity, business activity organized through those organizational structures. But they’re not venture capital fundable. They can sometimes take on debt and certainly take on grants. 

 

But so there’s plenty of examples going both back into our precedence, like who came before us, who was excluded from ways of organizing traditional business, who found these other ways of being together and trading to all the experiments on platform cooperatives, which everyone acknowledges is still very experimental. But as these technologies become cheaper and cheaper and cheaper and the ability, the learning curve gets easier and easier, we can imagine there’ll be many opportunities to form economic arrangements that aren’t dependent on this kind of mass-scale external capital injection – which I think the traditional VC world is now acknowledging. 

 

Not everybody, but they’re all sort of saying, I’m playing with these things and I’m seeing that maybe we won’t have software as a service anymore, because why would you need it if you could just train up your own team to build on these systems and build your own version of it? It’s already happening.

 

Simone Cicero

Yeah, we had just Jason Fried on the podcast talking about once, for example, just a few months ago. Shruthi.

 

Shruthi Prakash

Yeah. Yeah. I mean, I was listening and it reminded me of this city back at home in India, in Tamil Nadu. There’s a city called Auroville, which is basically like, eco sustaining, self sustaining prototype city of sorts, where essentially there are a lot of different ways of functioning as an, as a city, right? Like for example, their idea of money is very different. They have like,

 

let’s say, spaces which are free and enabled for its citizens and so on – it’s a very differently run model. But what happens with that is also one, I have seen a lot of external sort of resistance from even the society right around, even if you go like a five kilometer radius, right? That’s you see a lot of external resistance or it is just viewing inward from like a factor of unknown or like this shiny new thing that’s happening essentially. 

 

And it was a city that was established many, many years ago and it still hasn’t been sort of accepted. So for me, what that also sort of indicates is that you need, let’s say as much as capabilities and skills can be developed, which are new. 

 

Firstly, what are these skills or capabilities that need to be developed to relook, and reimagine your ways of mental models and so on. And second is there also ways to expedite that process because like essentially otherwise I presume it is a little bit of a longer curve. So is there a way to fasten these skills and capabilities that need to be adopted?

 

Jennifer van der Meer

Yeah, I I’m sure. I know I was listening to your Indy Johar podcast recently, and he convenes in one of these financing ecosystems convenings that are trying to work on these things. I think that way that’s going to happen is happening already in people committing their time and energy to like learning collectives and informally and formally just acknowledging we need organizational life to be much more about learning than about hierarchy and control.

 

And so just to start operating in that way and to, know, there’s one trend I can point to are like this bioregional learning centers, which is coming out of multiple places all at once around the world. Many folks working on like a bioregional lens, bioregional thinking, bioregional organization to try to design for these transitions. There’s like design school for regenerating earth and in multiple other places in a recent, you know, BioFi and ReFi, one coming out of the finance world, one coming more out of, I’ll say, like systemic thinking world, that is acknowledging that we need the learning system to be the primary organizational activity. 

 

And it’s through that learning and supporting field development or capacity development in that learning structure that it’s gonna come through probably grants and or design of systems that any kind of collective surplus in any of these activities kind of goes back to our collective learning. Like it’s the collective learning that needs to be there so that when we go design for like the Connecticut River Valley here, just north of me, we think about the, know, Quebec Hydros, you know, delivering down to New York City’s power grid, like if we’re gonna truly acknowledge the economic and ecosystem and social cultural positives and negatives of those contributions that we’re thinking in a bioregional way and we’re learning in a bioregional way. 

 

So when the scale then does become more replication and the acknowledgement of place matters. And so the way that I organize that in New York City where I don’t feel very connected to nature versus the Adirondacks versus this village that you spoke about in India, our primary capacity, it is, and it goes back to a business model capacity that’s talked about in the theory. It’s a dynamic capability that we’re constantly renewing. That’s what organizational life always has been and always will be. And we constrain ourselves if we just narrow into only the surplus, I’m sorry, only the value capture opportunities are the ones we should only prioritize.

 

Simone Cicero

I was thinking that at the end of the day, the model, let’s say, let’s not call it the business model, let’s call it the value model, let’s say, is to some extent an expression of the bigger system inside which the model is being taught. 

 

So for example, you have a business model if you think through the system as the market, where you have cost of capital, so the resources are priced in a certain way, they are depreciated in a certain way and so on. Instead, if you suddenly take the market and you change it with a bio region, then the stocks and the flows are different. You have system health that depreciates in another way, so maybe you have a watershed type of resource and then you have biodiversity, which are all resources of the system. And therefore, the model that you need to apply, it needs to be different.

 

It needs to be a different system. I there needs to be different elements inside it. So maybe last question before we move into the breadcrumbs. I was thinking, in your experience with companies, both startups or large organizations, I’m sure that you have experience of interacting with them. 

 

Are you seeing some sort of cultural availability or practical availability in thinking beyond the constraints of a market-based business model into something more inclusive of different, again, different perspectives, values, or I would say connected with larger or different systems of value?

 

Jennifer van der Meer

Yeah, I mean, that’s pretty much all of all of the folks that find their way to me. I don’t tend to get the plain vanilla questions anymore. And so I would say all of the above, but I’ll tell you specific types. And I think I can really back in the history and bringing it back to the taxonomies of business models and evolution. 

 

I can take it back to this moment in like 2009 Michael Bloomberg, prior mayor of New York City, ran a civic innovation challenge. I it was like NYC big apps and inviting people to solve city problems through technology. it was like in those interactions that I started noticing people struggling to understand if they should start a for-profit or a nonprofit, which like confounded me at the time. Like, of course, like, why wouldn’t you know that? You’re either gonna go make money or you’re gonna like deliver good. Like, why is that? Why is that a question? And I’ve seen that since that time, that question, you know, it’s in all of my students and it’s in all of the founders that I work with or often in innovators that are working outside of the core corporate R&D space, saying like, have the scientific technology, this breakthrough, this amazing way to solve for, you know, heart failure or climate change. And we don’t want it just to go through the typical, you know, let’s only sell it to those with the means first and like slowly let it trickle through the technology adoption curve, or let’s only sell to insurance companies that will pay and wait for it to show up in single payer government systems or, know, they’re too impatient to wait for the market-based tech adoption curve of the earliest innovators kind of experimenting with it and waiting for it to flow through. 

 

We want max reach, max scale, max access. Like how do we design our organizational strategy, the business models if we need them, finance models of multiple capital types to get us from where we are, which is like, we know this thing is super valuable to the world, valuable in all of the sense of our survival. So how do we think through that? And that’s a very fun strategic playing field. It’s much more interesting. And it’s like, I have to constantly check against my, you know, my conditioning, which is I’ve tried for years to get outside of my, you know, 10,000 hours of Wall Street and the earliest part of my career to not just go to those kind of received logics and obvious ways of thinking to say, wait, wait, we might not want to go that route because it would constrain our path. 

 

It would put our blinders on in such a way that we would only execute against that narrowest part of the market. And it would keep us out of this much bigger opportunity. At the same time, you have to think through the sequence and logic of how to get there. So I see that in, you know, regenerative medicine, all types of climate check where the costs are going to zero, all types of AI where folks are delivering really like novel combinations of things we couldn’t do as humans rather than just the AI story that’s about efficiency. Like it’s in those spaces that are like just so incredible. The conversation’s so rich and the movement’s so bold. 

 

You know, it’s not us tiny little story on the side. Folks really want to rethink first principles level about finance, business, markets, foundations, grants, so that we can reorganize how we have organized these roles and capital types to get what we need and understand how we organize and make decisions to do it.

 

Shruthi Prakash

I mean, I’m super excited to see how it works. And I was just thinking, like, I really do hope that it goes in like shared goals sort of perspective and not become, you know, fragmented essentially. So I’m curious to see how that shapes out. 

 

As we come towards the end of the podcast, so we have a section called the breadcrumbs where I think you know about it. So breadcrumbs where our guests share you know, books, podcasts, music, or anything that inspires them in their work that our listeners can gain from.

 

Jennifer van der Meer

Yeah, I I encourage people to think of both business modeling and this other type of modeling we’re talking about, contribution, value, as collective science fiction. I’m, know, Ursula K. Le Guin, anything by Ursula Le Guin, Octavia Butler,’s “Parable of the Sower” series, N.K. Jemisin’s Broken Earth trilogy. Those are my favorite, you know, feminist futurists, black Afrofuturist authors, but then also the ones that all the tech bros read, Neal Stephenson’s, know, everybody has to read Snow Crash to understand why we keep seeing metaverse things slapped on everyone’s faces. Isaac Asimov’s foundation. Like all of that. I encourage everyone to form reading groups around that and to have us all engaged in those collective science fiction activities.

 

Simone Cicero

Thank you so much. I think it’s a good note to end on because you make a reference to collective fictions. And I think you’re right when you say, to some extent, also how we think about business is a collective fiction. So it would be nice. Yeah.

 

Jennifer van der Meer

But the future of it. Yeah, it is. Yeah.

 

Simone Cicero 

It would be nice to really… And I hope that this episode leaves our listeners with some curiosity – kind of internal need to go look beyond what’s normally in the scripted, let’s say, guidelines to building a business model, to try to, OK, let’s say, let’s recast the container of this business model. What changes in this case? What kind of flows I can look into? And what kind of stakeholders should be involved in this? 

 

And also, again, as we said before, how these technologies are changing the landscape, know, in creating new possibilities that simply weren’t possible before. Maybe AI that is, let’s say, a gift of the techno-utopian minds in our world that will generate new possibilities for us to manage the commons in a different way, right? So I think that’s an exciting perspective.

 

I hope you also enjoyed the conversation and we brought you to new heights, new spaces in your thinking. Thank you, Shruti, for your questions, for your contribution.

 

Jennifer van der Meer

So much. So great to reconnect Simone and to meet you Shruthi.

 

Shruthi Prakash 

Thank you. Thank you so much for having me and thank you for joining.

 

Simone Cicero

And for our listeners, as always, you can look into our website, boundaryless.io/resources/ podcast. You will find Jen’s latest episode with all the notes, the links to the projects and the breadcrumbs she mentioned. And of course, I encourage you to look into her work and her website, Reason Street and engage and connect. In the meantime, remember to think Boundaryless.