Busines model canvas - what is it and how can I use it
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The document discusses the Business Model Canvas, a tool that enables businesses to create, understand, and test their business models in a lean and agile manner. It outlines nine essential building blocks that encompass various aspects of a business. The document also provides guidance on using the canvas effectively, emphasizing the importance of customer segments, value propositions, and key activities.
Busines model canvas - what is it and how can I use it
- 2. Agenda • What is it? • How do you use it? • Q&A • Goody bag 2
- 3. CONFIDENTIAL – DO NO SHARE 3 It’s said that no business plan survives its first contact with customers
- 4. CONFIDENTIAL – DO NO SHARE 4 Why do businesses spend hundreds of hours and pages on creating business plans without testing it in the real world?
- 5. CONFIDENTIAL – DO NO SHARE There must be a better way!
- 7. CONFIDENTIAL – DO NO SHARE 7 The Business Model Canvas - is a tool to create understand and test business models in a lean / agile way
- 8. CONFIDENTIAL – DO NO SHARE 8 The Business Model Canvas - empowers founders and business leaders to create, visualize and test existing or new business ideas without wasting capital or overcomplicating their approach
- 9. CONFIDENTIAL – DO NO SHARE It has been used by countless start-ups to break new ground like Airbnb and Tesla, as well as massive companies like GE, P&G and 3M to explore new models and keep up with the competition
- 10. 10 What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive? Through which Channels do our Customer Segments want to be reached? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? For what value are our customers really willing to pay? For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? For whom are we creating value? Who are our most important customers? What type of relationship does each of our Customer Segments expect us to establish and maintain with them? Which ones have we established? How are they integrated with the rest of our business model? How costly are they? What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment? Which customer needs are we satisfying? What Key Activities do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue streams? Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquiring from partners? Which Key Activities do partners perform? What Key Resources do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue Streams? Day Month Year No. This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. The Business Model Canvas is constructed out of nine building blocks — that equip you to think of thousands of possibilities and alternatives (and find the best ones) that can then can broken into assumption / hypotheses that can then be tested How does it work?
- 11. 11 How does it work? 2. Value Propositions – The product or service you provide. What value do we deliver to the customer? Which one of our customer’s problems/needs are we helping to solve? 4. Customer Relationships - What type of relationship does each of our Customer Segments expect us to establish and maintain with them? How do we get, keep and grow our customers? How do you build loyalty? 1. Customer Segments – What customer / users are you serving? Who are our most important customers? What jobs do they want done? 3. Distribution Channels - How does each customer segment want to be reached? How are we reaching them now? 5. Revenue Streams - What are customers really willing to pay for? What do they current pay? What types of revenues are you generating transactional or recurring revenues? 9. Cost Structure - What are the most important costs in our business model? Which key elements drive your costs (which resources are most expensive)? What key activities are most expensive? 6. Key Resources - What Key Resources underpin our business model? What do we need to deliver what we are promising? What resources are essential and need to be executed in house? 8. Key Partners - Who are our Key Partners? Who are our key suppliers? What activities do our partners perform. What do we rely on from our partners 7. Key Activities - What are the major activities (deliverables) must be produced – when and by whom. What activities are crucial?
- 12. 12 How does it work? Value Propositions Customer Relationships Customer Segments Distribution Channels Revenue Streams Cost Structure Key Resources Key Partners Key Activities
- 13. CONFIDENTIAL – DO NO SHARE How do I use it? 13
- 14. 14 How do I use it? 1. Complete the Canvas 2. Review 3. Create / assumptions / processes / KPIs that are needed to support the business 4. Get out out the building 5. Have fun!
- 16. CONFIDENTIAL – DO NO SHARE Thanks and have fun creating your own canvas 16
- 18. 18 What materials will I need? • Canvas Poster: Printed out and place on a wall in BO format • Large Post it notes in several colours • Thick markers to wite on the post-it noted What are the ground rules? • It can be used by individuals, small groups or as workshop • Don’t write on the Canvas: by using posit notes to describe your business model you will be able to move things around, onto as well as off the Canvas • One idea per post it note: Don’t make bullet points on the post its. Use two post its to describe two different channels, like your sales force and your company’s website How do I use it?
- 19. How do I use it? Getting started Start sketching out your business model by creating Post its for each one of the nine building blocks. Some people prefer to begin with listing their customer segments or value propositions. Others prefer starting with their key resources or key activities. It doesn’t matter. Just do it. Add all elements relevant to your model: • Ask yourself what all the elements are that your business model requires to create, deliver, and capture value. Create a Post its for every single element that is important. Check completeness and coherence: • Make sure you don’t create “orphan” elements in your business model. For example, for each customer segment and their jobs-to-be- done you should have a corresponding value proposition. Or, for instance, for each value proposition you should list the key resources and activities that are required to create it. Tell a story: • When finished sketching out your business model try telling the story of your model one Posi it at a time. Take all the Posit its down and explain your business model by putting up one Post its after the other on a blank Canvas. This will force you to tell a coherent story element after element. Define assumptions and get out of the building to test them • This could be as simple as speaking to customer on the street to more formal research using quantitative and qualitative techniques to engage more formally with customers