Last night's trip to a West End London musical with fellow brandgym partner David Nichols and Mrs Taylor got me thinking about business model innovation. The musical in question is called Showstopper, and is like nothing you've seen before: each night the cast improvise the whole musical from scratch, using audience participation! The quality of songs, acting and dancing is incredibly high, given that the whole things is made up on the spot. I highly recommend the show if you are living in or visiting London; the limited run ends on 28th November.
"Innovation" is often associated with creating new products or services that improve on the current market offer but play to the same rules of value creation. And whilst this can work well, a potentially more potent form of innovation is creating a whole new business model. Here, "Blue Ocean Strategy" is a useful framework. It was created by Chan Kim, who was my (then brand new) strategy professor during my INSEAD MBA course. The key tool I'll illustrate below is called "the strategy canvas". You start by capturing the key features used by the current market offer. You then decide which of these to raise, reduce/cut and create.
Many West End musicals tend to be dramatic in nature, with a limited number of laughs. Tonight, for example, your options include show like Jersey Boys, Guys and Dolls, Les Miserables, Funny Girl and Billy Elliot. Showstopper raises the humour level and is packed full of gags, some of them rather rude in nature. This seemed to attract a younger and noisier audience than your typical musical, which contributed to the lively atmosphere and high level of audience participation.
A typical West End show has a sophisticated stage design that changes during the show. Second, there are all the costumes to design and create. And actors may need make up applying each night. In contrast, Showstopper reduces all these to a minimum. The cast have a small selection of props they make highly creative use of, such as umbrellas, hats, sticks and the like. They wear simple clothes and little make up. And the stage has only a few chairs and trollies on it. This minimalist approach to stage and costume cuts out a big chunk of cost.
One element that Showstopper reduced played an important role in the show getting put on in the West End at all. The theatre owner had a sudden few weeks of availability, and needed a new show to fill it straight away. However, most shows need many weeks of rehearsal before they are ready to open. As Showstopper is improvised each night, there are no rehearsals! This meant the show was ready to go, and also further reduced the costs of putting on the production.
One costly aspect which is eliminated is costly celebrity cast members. For example, Elf the Musical has Kimberly Walsh of Girls Aloud in a starring role. ("Kimberly Who?", I hear some of our older readers ask). The Showstopper team is made up of six highly talented people who, up to now, are relatively unknown. And then there is the music. No massive orchestra here. Just a small 3 piece band who are able to improvise all night, every night.
The whole aspect of audience participation is completely new for a musical. The compere starts by asking the audience for ideas about where the musical will be set. Last night ideas included Scunthorpe, a Kwik Fit tyre repair shop, Wales and Atlanta, Georgia. Cheers from the audience are then used to select the final location, which in our case was "a Kwik Fit repair shop in Georgia". Next, a range of musical genres are suggested, to be used as inspiration by the cast. Ours included The Lion King, Mary Poppins and Jersey Boys. Finally, the audience shout out possible titles. Ours? "You Never Tyre of Georgia"! Social media even gets a look in, with half time tweets used to suggest how the second act starts.
The reduction/elimination of staging, costumes, make-up, cast, orchestra and rehearsals cuts the cost of Showstopper significantly. Ticket prices range from £20 up to £65, so not that cheap. But these are pitched below the eye wateringly expensive level of famous shows (a top price ticket for Charlie & The Chocolate Factory this Saturday night is £128). The combination of mid level pricing and low costs means that the capacity utilisation (% tickets sold each night) needed to breakeven is lower than that for a typical West End musical.
In conclusion, "Bravo!" to the Showstoppers cast and producers for putting on a fantastic show like none I've ever seen before. Bet they never thought they would be used as a case study to illustrate business model innovation, but they do show how to do this by raising, reducing/eliminating and creating features.