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PREDICTIVE BUSINESS MODEL SIMULATION

What is business model simulation?


Business model simulation uses data

Unlike traditional business plans or static

science to accurately predict business and

assessment tools (ex. SWOT), simulation


embraces the dynamic reality that

market behavior.
Similarly to how pilots use flight simulators
and drug companies build virtual
molecules, using technology and
algorithms to accurately simulate business
models saves innovators tremendous time,

businesses and markets are complex


adaptive systems. Business models exist in
chaotic networks where individual and
collective behavior mutates and selforganizes.

cost and risk. It can also let innovators

Therefore its often not the data that

iterate more quickly, explore a wider variety

provides insight; its change and the

of options and learn faster than the

anticipation of change that allows

physical world permits.

simulation to predict with unheard-of


accuracy.

Growth Science

Developing the capabilities to effectively


simulate business models was no small
undertaking, nor was it merely academic.
Predicting business outcomes in real-time, real-

Why it matters
The obstacle to growth has always been the time, cost

world market conditions with statistically significant

and risk associated with commercializing new


innovations. Whether launched as startups or within

accuracy requires tools that exceed the limitations of

large companies, over 70% - 80% fail.

human intuition.

positive spin by an iconic innovator, Thomas Edison

Even with a

summed up the dilemma as - I have not failed. Ive


just found 10,000 ways that wont work.
Such failures too often result in millions (or billions) in
wasted spending, time, opportunity cost,
organizational distraction, team demoralization,
reputation damage and frustrated stakeholder
goodwill. Despite this toll, organizations continue to
endure the hardship out of sheer necessity. It isnt a
While intuition has its value, the right algorithms and
technology are needed for those tasks human
minds are ill-designed to do. This recognition and

fight they can walk away from. For better or worse,


creating innovative growth is the primary challenge
faced by business leaders today.

this human/mechanical partnership is how


business model simulation allows innovators to
predict with greater consistency and precision than
historically possible.

Not only are business and market systems


complex, but theyre made up of dynamic
sub-systems that operate by different
(even opposing) rules. Therefore subsystems must be modeled separately and

Market Dynamics
competitive realities

Corporate Dynamics
organizational realities

Vector Trends
longitudinal realities

Ecosystem Control
interdependence

collectively, including competitive rivalries,


the internal idiosyncrasies of corporate
cultures, real-time market trends and
broad ecosystem control points.

Growth Science

Comparison
traditional innovation

simulation

$100K $M $B

nominal

months, years

days

one

unlimited

employees

none

intuition

data

process variability

high variability

low variability

process accuracy

low accuracy
(70% - 80% failure)

high accuracy

cost per strategy


time
# tested
staffing requirements
decision driver

Whats the goal?


Drive better discussions
Make better decisions
Get better results
The goal is not to replace human judgment or

The goal is to ensure that when higher risk, live

intuition, due diligence, innovation teams, live

bets are ultimately made theyre significantly

market pilots, physical prototypes, active market


experimentation or real-world learning - just as

more likely to succeed. Predictable error is


identified and avoided without the cost, time and

flight simulators arent intended to replace actual

human drama of live business failure. Through

airplanes.

simulation, companies can learn in days what


otherwise takes costly months or years.

Growth Science

Growth Sciences simulations are used by many of the


worlds most demanding, sophisticated, marquee
companies. They guide core strategies, organic growth
bets, acquisitions, licensing and private equity
investments. Simulation has catalyzed high profile
corporate reorganizations and the growth capabilities of
top tier innovators.
Industries include leading consumer goods, defense,
education, entertainment, media, finance/investment
banking, healthcare, high-tech, manufacturing, retail,
service, software/IT and venture investing. Growth
Sciences relationships are held in the strictest confidence
with the highest level of ethics, discretion and
professionalism.

A lots been learned...


since Thomas Edison and the Industrial Revolution,
however top businesses still use the near-identical
innovation processes that have performed poorly for over
200 years. Many accept 70% - 80% failure rates as the
way its always been and always will be, without pausing
to ask themselves why they continue doing whats never
been all that effective.
Thats why business model simulation is profound. Unlike
generations past, we are fortunate to live during a
Cambrian explosion of data science. This has allowed for
highly accurate business model simulations to help
innovators drive better discussions, make better decisions
and get better results.
Sincerely,

Thomas Thurston
CEO, Growth Science

Growth Science