I mentioned in a previous post that I love the Business Model Canvas. It’s the single most useful tool and framework I’ve come across. It helps you define and refine your business or product strategy; to explain it, and importantly, execute it. Read on for the main reasons why I like it so much.
Why I Like the Business Model Canvas
There are many reasons why I like it so much, here are the main ones:
- It’s visual.
- It’s easy to use.
- Underlying its simplicity is a sophistication and complexity that enables you to cover all aspects of your business or product.
- You can test it.
- You can tailor how you use it to your own personal preferences.
- Once done, you can use it to compare your business to other businesses of a similar shape and help you figure out where you need to focus and invest.
How to Apply the Business Model Canvas
To use the Business Model Canvas I’d recommend following these steps:
- Draw it on a whiteboard.
- Make sure you have lots of Post-It notes.
- Get the key members of your team together and gather around the whiteboard.
- Start by mapping out the canvas for where you are today. For me, I always start in Customer Segments. Use the Post-It notes to add details to each section in that category.
- Take a photo, then remove all the Post-Its.
- Once done – a pre-condition is that you’ve already defined your business objectives for your new initiative – start mapping out your ‘to-be’ state. Again using the Post-Its.
- Compare this to your ‘as-is’. What’s changed? What’s been added or removed? What does this tell you about where your priorities should be and what new initiatives do you need to start?
- Mark on the canvas which statements are validated by customer and market feedback. Any that aren’t need to be tested, or flagged as risks.
- As you learn new things, change the canvas – it’s meant to evolve and improve with time.
- At this point it’s useful to compare the pattern of your Business Model Canvas to others. A really useful book to do this is Business Model Generation. Highly recommended.
- Now you should have a good feel for the shape of the strategy your new product, business or initiative. From here, it’s down to good old business planning: build the costs, the business case and plan. And deliver.
The YellowDog Business Model Canvas took about a year to stabilise and it’s now on the wall in our office. Now we mainly use it to help tell the YellowDog story, but it is the foundation on which the business is built.