What is the Business Model Canvas?
The Business Model Canvas, created by Alexander Osterwalder, is a strategic tool that lets you visualize your entire business model on one page. It's used by startups and Fortune 500 companies alike.
The 9 Building Blocks
1. Customer Segments
Who are you creating value for?
- Mass market vs. niche market
- Segmented vs. diversified
- Multi-sided platforms
2. Value Propositions
What value do you deliver to customers?
- What problem are you solving?
- What needs are you satisfying?
- What's unique about your solution?
3. Channels
How do you reach your customers?
- Awareness: How do customers learn about you?
- Evaluation: How do they evaluate your offering?
- Purchase: How do they buy?
- Delivery: How do you deliver value?
- After-sales: How do you provide support?
4. Customer Relationships
What type of relationship does each segment expect?
- Personal assistance
- Self-service
- Automated services
- Communities
- Co-creation
5. Revenue Streams
How do you make money?
- Asset sales
- Subscription fees
- Licensing
- Advertising
- Freemium
6. Key Resources
What do you need to deliver your value proposition?
- Physical resources
- Intellectual property
- Human resources
- Financial resources
7. Key Activities
What must you do to make your business work?
- Production
- Problem-solving
- Platform/network management
8. Key Partnerships
Who are your key partners and suppliers?
- Strategic alliances
- Joint ventures
- Buyer-supplier relationships
9. Cost Structure
What are your major costs?
- Fixed costs vs. variable costs
- Economies of scale
- Economies of scope
Tips for Filling Out Your Canvas
- Start with Customer Segments - Everything flows from understanding your customer
- Use sticky notes - Makes it easy to iterate and move things around
- Be specific - "Small businesses" is too vague; "Restaurants with 10-50 employees" is better
- Validate assumptions - Each box contains hypotheses to test
Action Items
- Download a blank Business Model Canvas template
- Fill out each of the 9 blocks
- Identify your 3 riskiest assumptions
- Plan how to test those assumptions