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Does Startup Success Validate Us Personally?
How We Secretly Lose Control of Our Startups
Should Kids Follow in Our Founder Footsteps?
The Evolution of Entry Level Workers
Assume Everyone Will Leave in Year One
Stop Listening to Investors
Was Mortgaging My Life Worth it?
What's My Startup Worth in an Acquisition?
When Our Ambition is Our Enemy
Are Startups in a "Silent Recession"?
The 5 Types of Startup Funding
What Is Startup Funding?
Do Founders Deserve Their Profit?
Michelle Glauser on Diversity and Inclusion
The Utter STUPIDITY of "Risking it All"
Committees Are Where Progress Goes to Die
More Money (Really Means) More Problems
Why Most Founders Don't Get Rich
Investors will be Obsolete
Why is a Founder so Hard to Replace?
We Can't Grow by Saying "No"
Do People Really Want Me to Succeed?
Is the Problem the Player or the Coach?
Will Investors Bail Me Out?
The Value of Actually Getting Paid
Why do Founders Suck at Asking for Help?
Wait a Minute before Giving Away Equity
You Only Think You Work Hard
SMALL is the New Big — Embracing Efficiency in the Age of AI
The 9 Best Growth Agencies for Startups
This is BOOTSTRAPPED — 3 Strategies to Build Your Startup Without Funding
Never Share Your Net Worth
A Steady Hand in the Middle of the Storm
Risk it All vs Steady Paycheck
How About a Startup that Just Makes Money?
How to Recruit a Rockstar Advisor
Why Having Zero Experience is a Huge Asset
My Competitor Got Funded — Am I Screwed?
The Hidden Treasure of Failed Startups
If It Makes Money, It Makes Sense
Why do VCs Keep Giving Failed Founders Money?
$10K Per Month isn't Just Revenue — It's Life Support
The Ridiculous Spectrum of Investor Feedback
Startup CEOs Aren't Really CEOs
Series A, B, C, D, and E Funding: How It Works
Best Pitch Decks Ever: The Most Successful Fundraising Pitches You Need to Know
When to Raise Funds
Why Aren't Investors Responding to Me?
Should I Regret Not Raising Capital?
Unemployment Cases — Why I LOOOOOVE To Win Them So Much.
How Much to Pay Yourself
Heat-Seeking Missile: WePay’s Journey to Product-Market Fit — Interview with Rich Aberman, Co-Founder of Wepay
The R&D technique for startups: Rip off & Duplicate
Why Some Startups Win.
Chapter #1: First Steps To Validate Your Business Idea
Product Users, Not Ideas, Will Determine Your Startup’s Fate
Drop Your Free Tier
Your Advisors Are Probably Wrong
Growth Isn't Always Good
How to Shut Down Gracefully
How Does My Startup Get Acquired?
Can Entrepreneurship Be Taught?
How to Pick the Wrong Co-Founder
Staying Small While Going Big
Investors are NOT on Our Side of the Table
Who am I Really Competing Against?
Why Can't Founders Replace Themselves?
Actually, We Have Plenty of Time
Quitting vs Letting Go
How Startups Actually Get Bought
What if I'm Building the Wrong Product?
Are Founders Driven by Fear or Greed?
Why I'm Either Working or Feeling Guilty
Startup Financial Assumptions
Why Every Kid Should be a Startup Founder
We Only Have to be Right Once
If a Startup Sinks, Founders Go Down With it
Founder Success: We Need a Strict Definition of Personal Success
Is Quiet Quitting a Problem at Startup Companies?
Founder Exits are Hard Work and Good Fortune, Not "Good Luck"
Finalizing Startup Projections
All Founders are Beloved In Good Times
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The Bullshit Case for Raising Capital
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Startup Failure is just One Chapter in Founder Life
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All Founders Make Bad Decisions — and That's OK
Startup Board Negotiations: How do I tell the board I need a new deal?
Founder Sacrifice — At What Point Have I Gone Too Far?
Youth Entrepreneurship: Can Middle Schoolers be Founders?
Living the Founder Legend Isn't so Fun
Why Do VC Funded Startups Love "Fake Growth?"
How Should I Share My Wealth with Family?
How Many Deaths Can a Startup Survive?
This is Probably Your Last Success
Why Do We Still Have Full-Time Employees?
The Case Against Full Transparency
Should I Feel Guilty for Failing?

How To Create A Business Model Canvas

The Startups Team

How To Create A Business Model Canvas

A business model canvas is a method for determining a company’s business model in a visual, straightforward way. It can be used to develop new business ideas or to sketch out the business model for an existing business. It was developed by Alexander Osterwalder in 2008 and is part of the lean startup methodology.

Every company needs to be able to clearly and concisely outline their business model. Not only does it serve as a guide for moving the company forward, it also helps when approaching investors and partners. However, figuring out a business model can be tricky, especially for first time founders. And that’s where Osterwalder’s business model canvas comes in.

The business model canvas can be printed out in large scale, so that an entire team can work on it together. Consider using post-it notes so that ideas can be added, subtracted, and moved around as you work collaboratively toward developing a clear business model for your startup.

business model canvas

Business model canvas framework

The business model canvas framework contains nine sections. Let’s take a closer look at each one.

1. Key Partners

For the key partners section, you’re trying to determine who else you need in order for your startup to be successful. Who’s going along for this ride with you and your team?

Ask:

✓ Who are our key partners?
✓ Who are your suppliers, if relevant?
Who are your investors, if relevant?

2. Key Activities

What’s the most important thing your company has to do in order to be successful? The answer to this is often the product or service you’re delivering to the end customer.

Ask:

What’s the most important action your startup needs to take in order to be successful? You must settle on one.

3. Key Resources

In order to be successful, your startup needs a variety of resources. “Resources” doesn’t just mean money, though, although that type of resource is certainly important. Resources refers to everything your startup needs to succeed.

Ask:

What financial resources do we need?
What human resources do we need?
What physical resources do we need?
What intellectual resources do we need?

4. Value Proposition

Your startup’s value proposition is the promise you make to customers about the services or goods you’re going to deliver. It’s can also be thought of as the value your customers find in your product.

Ask:

What value do we bring to our customers?
What problem are we solving?
What makes us different from our competitors?
What’s new about our startup?

5. Customer Segments

No product can survive without customers, which makes it essential to determine what your customer segments are. The business model canvas has five customer segments: mass market, niche market, segmented, diversified, and multi-sided platform/market.

Mass Market
Mass market means your product or service appeals to the widest possible range of people. Think of a product like dishwashing soap. Pretty much everyone uses it.

Niche Market
Niche market means your product or services appeals to a specific group of customers, based on their particular needs. For example, only new parents are going to be interested in purchasing a Baby Bjorn.

Segmented
Many companies have multiple markets within their main market. This is called a segmented market. So, for example, you may need to segment out your market based on demographic characteristics like age, gender, or location.

Diversified
A company that serves more than one market segment has a diversified market.

Multi-Sided Platform
Some companies have two or more markets that they’re serving simultaneously, with the same business. For example, if your company is a go-between for vendors and buyers — like Amazon is — then you have a multi-sided platform.

Ask:

Who are our most important customers?
Who were our very first customers?
Who gets the most out of our value proposition?

6. Customer Relationships

Startup founders know that customer service is the key to success. Customer relationships can take the form of personal assistance, dedicated personal assistance, self service, automated service, communities, and co-creation. But whichever method you choose, just make sure it’s excellent.

Ask:

How is my company going to interact with customers?
✓ How am you going to provide that key support and build an ongoing relationship with them?
How will customers be able to reach us if they need support with our product
✓ What’s the most cost effective way to still provide great customer service?

7. Channels to reach customers

Your company won’t survive if you can’t reach your customers — so how are you going to get your product or service to them?

Ask:

Are we going to reach our customers directly, through our own channels?
✓ Are we going to to reach our customers through partner channels, like Amazon or a podcast network or other major distributors?
Or are we going to use a combination of both?

Cost Structure

In this section, you’re going to explore the different costs and monetary consequences of your model.

Ask:

✓ Is your company cost-drive or value-driven?
✓ What are your fixed costs?
What are the most important costs for your startup?
✓ Which Key Resources are most expensive?
Which Key Activities are most expensive?
What are your variable costs?
What are your economies of scale?
What are your economies of scope?

9. Revenue Streams

Your revenue streams are how you actually make money — and how much money you make. Your startup may have one or many revenue streams, but this is where you’ll identify them.

Ask:

What are your customers currently paying for similar products?
How are they paying for those products?
Do they like that payment method? Would they prefer a different one?
✓ How much are they willing to pay you?
How much does each individual revenue stream contribute to overall revenue of the company?

How is a business model canvas different from a traditional business plan?

A traditional business plan can takes months to compose and can run to as many as 100 pages. It’s about mapping out all of the possible contingencies for your business, from your five-year profit forecast to your cash flow, cap table, market size, product, solution… You get the idea. It’s a static document that’s meant to reassure both entrepreneurs and investors that a company will succeed.

A business model canvas, on the other hand, can be created in a day. It’s meant to be a dynamic document that help provide some structure to a startup, with the understanding that it’s just a starting point. It fits neatly into the lean startup model because it’s all about getting a model created quickly so that entrepreneurs can start testing their assumptions and hypothesis. Lean startup focuses on moving quickly and pivoting often if necessary, which a traditional business model simply doesn’t allow you to do.

Tools to build a business model canvas

If you’re looking to build your own business model canvas, the best place to go is Strategyzer, which is Alex Osterwalder’s company. There you’ll find not only the format of the business model canvas, but also a range of tips and sheets and information on how to best utilize it. For those of you who want to go really deep, they even offer a full business model online course.

But, don’t get too stuck in your head about it! The beauty of the business model canvas lies in its quick execution and flexibility. So what are you waiting for?

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Yuliia Oliinyk

Excellent.. simple as possible.. so let me add one more valuable piece of information on the topic https://litslink.com/blog/5-lean-canvas-examples-of-multi-billion-startups

Reply4 years ago

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