3 ways to supercharge your Business Models
I have been fortunate enough to work with several teams of varied size, location and some really innovative products over a span of 10+ years. In the past, I have worked with few leading telecom service providers in US and UK managing their operational & business support systems. I also had the opportunity to work with an e-commerce giant working on several B2B/C products that had a quite interesting business models.
One of the key thing that has stood out in the past few years is an in-depth analysis and understanding of the business model by all the stakeholders and teams involved in achieving the goals. But here lies the misconception that a business model is just about the revenue projection or increasing sales by performing some actions over a period of time. Time and again this incomplete understanding lead to several underachievements by the teams, to say the least. At the minimum, this costs several sprints chasing the wrong target consecutively draining the budget and increasing the frustration level of the product team.
A business model is NOT just:
- Return on your investment
- Features you are planning to roll out
- A vague vision of future state of your product/service
If you want to get deep insights about the business model and how it can transform your business or help you get started then I recommend reading ‘Business Model Generation’ from Alexander Osterwalder & Yves Pigneur.
A business model for me is:
- A framework which keeps you honest towards your goals
- A lot of research and hard work to think through all the verticals & horizontals of the canvas [VP, CR, CH, CS, KA, KR, KP, RS, CS] (and trust me it’s worth the effort).
- A backup of your product vision whenever you lose focus
- A way to understand and evaluate the nuances of the business by looking at all the levers and pivots which should work in sync to test your hypothesis and eventually drive towards the product market fit.
Product managers along with product owners/business analysts play a vital role in analyzing all the key components of the business model and fine-tuning the model over a period of time.
In my experience, the below 3 activities have worked well for the product team in order to gain a better understanding of the model which will gain market fit.
- Review your business model after evaluation of each hypothesis and plug in your learnings to drive the next set of evaluations or goals.
- Nothing beats being with the customer in an environment where your product or service is being used. The learning can be overwhelming but it’s a huge plus and gives you the best insight of “wants & needs” of your customer.
- If you work with several functions in your org which are responsible for product management, sales, marketing, engineering, operations etc then the need to be on the same page on the understanding of the business model is a must. As an example, a minor difference in understanding of your target market can lead to a marketing pitch or campaign that may yield zero or below par results. Or your engineering team may end up investing effort which yields 20% return.
These guidelines if followed should be able to divert you from the common pitfalls and reduce the cost of change.
Here’s a link to an offline downloadable version of the BMC provided by Strategyzer & an online collaborative version from Canvanizer which also lets you share the online canvas with your team members. Canvanizer also provides a ton of other canvases that you may employ per your requirement.
So how can we as BA’s, PO’s, PM’s, entrepreneurs be prepared before pitching a project or an idea to stakeholders? Be prepared and do your homework before you pitch to potential stakeholders. Business Model Canvas (BMC) is not just for entrepreneurs but also for intrapreneurs to employ and come up with a sound strategy.
Leave a comment if you would like the next blog regarding the lean canvas adapted by Ash Maurya.
Image Credit: Grasshopperherder.com