Workshop: Business Model Generation. October 24th, 2013: What is Business Model Canvas?
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What is Business Model Canvas?
You will use business model canvas to design, build and most of all to look for new business models. The business model canvas was for the first time presented in the book Business Model Canvas that was itself published as an innovative business model and is today available in eighteen languages.
Join the 500,000 people already using business model canvas and start inventing your business model.
Business model canvas is used in some of the largest organisations in the world including business companies and policy organisations such as the World Bank. At the same time thousands of enthusiasts in the start-ups are big fans of business model canvas. The easiest way to imagine canvas is in three parts:
Central part of the business model canvas
The central part of the canvas, Value proposition is the heart of every business model. What is the problem that you are trying to solve with your value proposition? And at the same time what is the solution that you are offering? To really know what your value proposition is you don’t need expensive market research. It might be enough just to really observe your customers. You have a great case on the subject of figuring out your value proposition by Harvard Business School professor, author and entrepreneur, Clayton Christensen (video, 4:13 minutes).
Right part of the business model canvas
On the right part of the business model canvas you create the value of your business model.
When designing never forget to apply what are the Channels to your customer segments? Maybe and very likely you already have some customers? Try to segment them and design the appropriate Customer relationships. Are you seeking long-term relationships with your customers or one of a time? Do you need new customers or just trying to keep existing ones? Do you need personal or automated relationships with your customers? A tip for you: there are not extremes in customer relationships, you are always somewhere in between.
And not lest for the second part of the canvas. Don’t forget to design your revenue streams. It might be the crucial part of your business.
Left part of the business model canvas
Third, left part of the business model canvas is so called rational part. It’s where you have to find out if you have the necessary resources for your business model?
Do your resources support your value proposition, your channels, relationships with your customers and revenue streams? The same goes for the key activities. What are the activities needed to support the central and the right side of your business model? On the extreme left hand side of business model canvas you have the key partners. Who are your key partners and what is the core that you’ll keep inside your business model?
Again, not least, the cost structure of your business model needs to be known and approved. If not not, here you go again with another business model canvas. This is the beauty of the canvas.