Start Up a Startup With a Business Model Canvas
Startups can be really messy for even the most experienced and headstrong entrepreneurs, so knowing the first step to take is vital. In the beginning, with just an idea, what should you do next? Well, the simple answer to that is to brainstorm all the different aspects of your business. This might include why your idea exists, what it solves, and who would even buy or use the resulting service or product. The easiest way to plan out all these areas of your business is to craft a business model canvas. A business model canvas is a simplified version of a business plan that let’s you see everything necessary in one page. It’s easy to find templates or examples for them, you can simply search business model canvas on google and you’ll see loads of results.
In one of my business classes at Case Western Reserve University, we formed startup teams to practice going through the process of an early stage company. To facilitate the first step of creating a business model canvas, Shannon Lyons, the executive vice president of flashstarts ( an accelerator in Cleveland Ohio), shared her wisdom with my class as a guest speaker. She told us what to expect in the early-stage startup environment and how to fill out a business model canvas. One really neat thing she taught us was staying customer-focused when filling out the business model canvas. After all, whether you’re for-profit or non-profit, you are going to need people who can use and support your company to survive, so keeping them in mind as your filling out the multiple sections in the canvas is critical. For example in the Value proposition section, you might want to focus on which problem you are solving for customers and what needs you are satisfying. Simply solving “a” problem is not good enough, it has to be a customer’s problem.
One way you can make your business model canvas customer oriented is creating customer personas. These are just breif realistic examples of people who might buy your product. You usually want at least a few before you can move on to completely filling out your canvas. Once you do have an idea of who might be interested in your company’s value proposition however, you can determine your customer segments and relationships. In other words, you are then able to understand how you will interact with customers and begin to understand what they expect from you. Once you properly grasp who benefits from your company’s proposition and how to satisfy them you can focus on the channels you will use to deliver your concept, which partners you’ll want to work with, necessary activities, and the resources you’ll need. All of those segments of your business will lead you to building your cost structure (highest expenses) and revenue streams (revenue source). Understanding your customers before you fill out your canvas isn’t something you can simply do in your head alone however, so gathering data from interviews is very helpful. In interviews, simple data has minimal usability so always use unbiased and open-ended questions to get everyone’s entire opinion.
While the business model canvas is an easy alternative to diving right into a business plan, it’s an easy way to stay organized without getting overwhelmed. There’s no need to feel guilty about starting with a simplified business plan, because you are giving yourself a place to start thinking about the entire business plan. Having a business model canvas that focuses on customer needs will tell you what steps you need to take to turn your idea into a reality in one page whereas a business plan is a clunky mess that takes a while to fill out. Your time is better spent executing your idea from the beginning.
As I mentioned earlier, I’m going through the startup process myself and I’m learning a lot of things through trial and error. Admittedly there are always errors, but to my surprise, planning a strategy has prepared me for the execution of the idea more than I originally imagined. I feel confident in the direction my team can take our startup and I will definitely be expecting a roller coaster ride, but at least we’ve got seatbelts.