Beyond the Business Model Canvas

The Business Model Canvas may be a great way to build a new business model, but it may also be the wrong tool for capturing a freshly conceived vision of a solution to a customer requirement.

The kinds of visions that lead to business models worth exploring don’t start with value propositions or customer segments. They start with imagining an important pair of experiences.

They’re diametrically opposite experiences, one bad, one good, and they both magically pop into your head at the same time.

As entrepreneurial gadfly Dave McClure points out, the kind of experience that will best motivate a potential customer to want something, is a problem that’s driving them  out of their minds with frustration, or one that just seriously scares them (e.g., something that could lose them their customer, job, friends, or reputation): in this case, what he’s talking about is the ‘bad experience’ part of your vision.

The good experience in question is the part of your vision that’s actually ‘visionary’: it’s your mental image of what a solution to that problem would look like and, more importantly, what life would be like once that solution existed.

If you’re like me and you have that kind of vision often, you get kind of fussy. You only get really fired up about your imagined solution if it has something about it that goes way beyond solving the problem.

You say to yourself: ‘Wow! This opens up all kinds of other possibilities! That solution allows me to do all kinds of other stuff!’. As if this wasn’t enough, it’s is not the only exciting characteristic of what it’s like to have a ‘vision with legs’: here are some more:

    • I can tell nobody has thought of this before, because the solution is so simple, cheap and easy to make that if it had been thought of before, it would already be out there
    • this would make the existing way of doing things look stupid
    • if I build this and it’s only able to improve things just a fraction as much as I imagine it could, it would still be a massive improvement
    • once people started to use this, they would never want to go back to the way they do things now
    • every time I think about this, I find another use for it and another way of making it better

The point is, that with all this excitement, you still don’t have an actual business model in your head, and it’s probably way too early in your ‘speculative imaginings’ to start formalising the thing into one.

The questions that you’d need to ask yourself about your vision (the questions whose answers would enable you to fill out a Business Model Canvas) are so detailed and diverting, that attempting to answer most of them at that particular juncture may risk you finding yourself dragged away from your visioneering at a critical and potentially irretrievable moment of inspiration.

Nonetheless, there are a few simple, straightforward questions that you can ask yourself, which should help you quickly scribble the thing down in a format which securely captures the essential features of the original idea, whilst at the same time keeping other less ‘vision critical’ issues from distracting you from your all-important ‘flash of insight’ when a continuous stream of possibilities and implications are rushing into your mind, and the last thing you need is to get bogged down in questions about such things as channels, partnerships, resources and relationships.

Before I offer this ‘Vision Model Canvas’ of vision-critical questions (which is actually far too grandiose a term, it’s only a list of eight short questions, and I don’t have an elegant ‘canvas layout’ for it, as Alex Osterwalder has for his canvas) I will remind you of the elements of the Business Model Canvas:

(1) Customer Segments

An organization serves one or more customer segments

Key questions:

(1) For whom are we creating value?

(2) Who are our most important customers?

(2) Value Propositions

An organization seeks to solve customer problems and satisfy customer needs with value propositions.

Key questions:

(3) What value do we deliver to the customer?

(4) Which one of our customer’s problems are we helping to solve?

(5) Which customer needs are we satisfying?

(6) What bundles of products and services are we offering to each Customer Segment?

(3) Channels

Value propositions are delivered to customers through communication, distribution and sales channels.

Key questions:

(7) Through which Channels do our Customer Segments want to be reached?

(8) How are we reaching them now?

(9) How are our Channels integrated?

(10) Which ones work best?

(11) Which ones are most cost-efficient?

(12) How are we integrating them with customer routines?

(4) Customer Relationships

Customer relationship are established and maintained with each Customer Segment

Key questions:

(13) What type of relationship does each of our Customer Segments expect us to establish and maintain with them?

(14) Which ones have we established?

(15) How are they integrated with the rest of our business model?

(5) Revenue Streams

Revenue streams result from value propositions successfully offered to customers.

Key questions:

(16) For what value are our customers really willing to pay?

(17) For what do they currently pay?

(18) How are they currently paying?

(19) How would they prefer to pay?

(20) How does each stream contribute to overall revenues?

(6) Key Resources

Key resources are the assets required to offer and deliver the five previously described elements.

Key questions:

(21) What Key Resources do our Value Propositions require?

(22) Our Channels?

(23) Customer Relationships?

(24) Revenue Streams?

(7) Key Activities

Key activities are the actual jobs and operations needed to be performed in order to produce key resources.

Key questions:

(25) What Key Activities do our Value Propositions require?

(26) Our Channels?

(27) Customer Relationships?

(28) Revenue Streams?

(8) Key Partnerships

Key partnerships involve activities that are outsourced and resources that are acquired outside the enterprise.

Key questions:

(29) Who are our Key Partners?

(30) Who are our key suppliers?

(31) Which Key Resources are we acquiring from partners?

(32) Which Key Activities do partners perform?

(9) Cost Structure

The eight previously described business model elements result in a cost structure.

Key questions:

(33) What are the most important costs inherent in our business model?

(34) Which Key Resources are most expensive?

(35) Which Key Activities are most expensive?

This is way too many things to start thinking about whilst your mind is fully engaged with dreaming up the repercussions and ramifications of your newly-imagined concept.

Instead, in the immediate term, these questions are all that you need to answer:

The Vision Model Canvas

Capture Your Eureka Moment!

(I’m not copyrighting it, please feel free to copy it)

1 Describe an undesirable experience
2 Who might have it?
3 What might they do about it?
4 What might they prefer to be able to do about it?
5 Describe a way to make that preferred option possible
6 What might that preferred option cost?
7 What might they be prepared to do to get it?
8 How many might be in that same position?

Answer these (some questions have deliberately been left very vague, for your creativity’s sake, you can obviously make the answers as long and multi-dimensional as you like, but remember not to get too distracted with scribbling if you think your time would be better spent doing more imagining first) and the sooner you get back to your rapturous flights of fanciful innovation, the better.

When you’re done with your latest round of visioneering, take a break, maybe quaff a cold one, go back to your scribbled answers to those eight questions (you may actually have several sets of them as the ideas were flowing thick and fast) and then get to work, using them as a basis for answering the other thirty five.

Why not cut, paste and print out a bunch of copies of the vision model canvas and just keep them close at hand, in case you get any ideas worth preserving? You never know when inspiration might strike. Please use the comments below to let me know if you find this at all useful.

I’d be grateful if anyone could invent a creative ‘canvas format’ that makes it more attractive. Even a nicely laid out form with boxes would do, but I’m sure you could come up with something better.