A Strategic Planning Alternative for Startups: The Business Model Canvass

Many startup pundits, including Steve Blank, the champion of the “customer development” and “lean startup” methods, have criticized reliance on the traditional practice of creating a business plan, and it’s true that many founders get hung up on trying to figure out what to do when they sit down to plan out their new venture. The “business model canvass” created by Alexander Osterwalder, provides entrepreneurs with a new way of looking at their strategic planning process.  In essence, the canvass is a series of questions that are designed to get founders thinking about nine categories of processes and internal activities which are the “building blocks” for their business:

• Value proposition, which the startup offers (i.e., product/service, benefits)
• Customer segments, such as users, payers, parents or teenagers
• Distribution channels to reach customer segments and offer them the value proposition
• Customer relationship to create demand
• Revenue streams generated by the value proposition
• Resources needed to make the business model possible
• Activities necessary to implement the business model
• Partners who participate in the business and their motivations for doing so
• Cost structure associated with the business model

The beauty of the business model canvass is the way that it allows entrepreneurs and other strategic manager to create a visual representation of their current and projected business models that also provides a holistic view of the business as a whole and a technique for quickly seeing how a specific action or investment will impact each of the components of the business model.  Learn more by downloading a briefing on Strategic Planning: The Business Model Canvass from the Sustainable Entrepreneur’s Briefing Series