Little nightly thoughts
by Business Exploration

Dear Fellow Innovator,

The following article, describing a few modification to the Osterwalder’s original Business Model Canvas, has been read by more than 3000 persons (and counting), has been adopted by Lean Startup Specialists as far as Australia (BigJump) and has become my standard way to start looking into new business ideas.
It explains why you should re-arrange your Canvas blocks like this and why you should read the blocks in this order.

We made it the starting point of our "Roadmap to Market" coaching program, that has helped industrial SMBs, high tech Startups and University Spin-offs design a business model that sell.

Read how it works here, and take advantage of our promotion:
"work for credits - 1st project free" to try it at no cost.

The Roadmap to Market

What people says about the Blue Canvas:

The modifications are a small, but I am sure you will appreciate, as some of these readers:

“That was the missing Canvas arrangement / alignment that I've needed for years. Thanks Flavio!”
Bill Roth, CEO at InvestorGraphics.com

“Thank you Flavio. Interesting and practical! Innovative thinking in perspective!”
Donna-Luisa Eversley - Business Development Consultant

“Thank you for sharing your brilliant insight.”
Simone Fontana - Founder & Treasurer at ESCP Europe
Private Equity and Venture Capital Club

“This is a useful modification to the BMC!”
Sunil Malhotra - Founder - Ideafarms

The Blue Canvas

The Business Model Canvas today is the base of any Start-up and most of business initiatives. Alexander Osterwalder has crafted it in 2008 providing all of us with a great tool to describe a business idea in a simple and effective way.
Its 9 blocks are really a guide in analyzing:

  • "why" a Customer should buy your value proposition
  • "how" your value proposition will reach your Customer
  • "what" you need to make it happen

and the cost / revenues sources that will make your business run.

The 9 blocks of the BMC:

  1. Customer Segments
  2. Channels
  3. Customer Relationships
  4. Value Propositions
  5. Key Activities
  6. Key Resources
  7. Key Partners
  8. Costs Structure
  9. Revenues Streams

The problem with the BMC:

You can find a lot of books explaining the 9 blocks and how to use them, however, every time I see wanna-be Entrepreneurs  trying to apply it...
I see minds wandering in space.
So I want to try to help with a couple of recommendations and a slight modification to the "holy Canvas" of Entrepreneurship that comes from few years of experience as Marketer and as Business Process re-Engineer.

My recommendations:

  • Start with "Customer"
    No Customer - No Party. You may say what you want, but "Business follows Relationship". And if you do not "have" a Customer, you cannot even think of doing business. If you have a look at the yellow picture of the Canvas I put in the heading, the number "1" is in the "value proposition" block. 
    This yellow canvas is "borrowed" from a Steve Blank*  presentation. So moving that "1" in another block, it's quite a bold move...I recognize, But my experience is that: when you start describing your Customer, all the following blocks come easy.
  • Go on with "Problem"
    Ok, "Problem" is not an official block of the Canvas, but it's the core of the "Value Proposition" block. I am used to say to my Clients that "Problem" is the block written full page on the reverse side of the canvas.If you can articulate the problem (and here a bit of classic marketing tools may help), to talk about the "Value Proposition", comes much easier.


My modifications:

So far for the easy part. Now let's talk about the slight modification I want to propose.(Osterwalder, please, I beg your pardon...).As someone of you knows, I have done this "doubleface" career path that make me think Marketing as a Process guy and Business Processes as a Marketing guy. The result is that every time I approached the Business Model Canvas my schizophrenia was pumped to stars, causing me a lot of headaches.
My "Marketing-me" loved the Canvas at first sight.
My "Process-me" was unable to stare at it.
My "Process-me" was striving to find symmetry and direction in it but everything conjured against both of them.

Read your BMC in the right direction:

I told you above that the problem was the starting point. As a seasoned project manager, I am used to think "R2L" - Right to Left: i.e. from "Customer" to "Resources".
Moving the "1" to the "Customer" block helped a lot to build again a R2L rhythm into the Canvas.

But much more helped moving the "Key Resources" block to the extreme left, in place of the "Key Partners" block.

Now you can read the canvas Left to Right almost like a classic Porter's "Value Chain": where "resources" are the foundation of your business process.


Give symmetry to your Business Model:

"Symmetry" was reeeealy a nightmare... till I noticed that the blocks were perfect, but in the "wrong" place. "Wrong" I mean, (with all due respect to Osterwalder) compared the two key organizational models used in any business organization already running on Earth:

  • Taylorism or co-ordination of activities
  • Mayo-ism or co-laboration as a form of human relationship**

If you draw a red line from R2L across the upper part of the canvas you will notice that the remaining blocks are kind of "reversed".
Try reading the blocks in this way:

  • Key Actvities > it's a matter of co-ordination - processes - Taylor
  • Key Partners --> it's a matter of co-laboration - relationship - Mayo

while:

  • Customer Relationships > it's a matter of co-laboration - relationship - Mayo
  • Channels --> it's a matter of co-ordination - processes - Taylor

Now you see what I saw:

The Business Model Canvas describes key organizational models too.
But displaced in an asymmetric order. This was causing my "Process-me" get mad: I could not follow the R2L reading.

So I decided to invert the "Customer Relationships" with the "Channel" Block.

Now I have a Canvas that I can read from "Customer" to "Resources" without wandering up and down at middle way.
Above I have all the "Taylor" blocks: and i can see how the value chain processes co-ordinate to use the resources to deliver the value proposition to Customer.
Below I have all the "Mayo" blocks and they point me to all the "human factors" on which I have to count, to make those processes work.


The result is the Blue Canvas:

The Blue Canvas, re-aligns the blocks so you can see your organization processes and relationships flowing smoothly from Resources to Customers, and build a better model of your business.

It's really presumptuous to name these little changes Business Model Canvas 2.0, but I really hope that you will like this re-shuffling of blocks and that it will help you "digest" faster the "business model canvas" methodology, and sprint up your next Investors Presentation.


*) Steve Blank has invented "Lean Startup"
**) Taylor has started the "scientific management" approach to organizations at Ford Motor Company. Mayo has started the "human relationship" approach to organizations at Western Electric.
© 2015 Business Exploration® - All Rights Reserved

CONTINUE READING:
How to define your MVP features to become a unicorn >


To talk about this, contact me at the numbers below.
Happy reading!

Flavio

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