Business Model Canvas. Let’s Define Your Startup.
Today I am going to talk about something different but indispensable if you want to start some new venture. It’s a fact that every new startup should have its roadmap and an easy and simple way of defining it is using a Business Model Canvas.
Business Model Canvas?
A brief definition of what a Business Model is when we are talking about Startups would be something like:
The Business Model helps us to define all the parts that a Startup need to work.
It also will tell us how our company will create value. Obviously, we have a purpose and we want to solve a problem or create a need for our customers. Thus, what we will do is creating value. We will have customers and we will offer them services or products in order to create this value.
The Business Model Canvas can be represented in a piece of paper and it’s just a big square divided by blocks. Each block represents each key pilar inside our business and it looks like this:
Defining the Different Blocks
The Business Model Canvas is divided, as I said before, in 9 blocks:
- Value Propositions. The aim of an startup is to solve o problem or a need. That’s all. Satisfying a customer through the product or service we will offer him/her. This one is the middle block (yes, it’s important) and it will contain how we will solve this problem or need. However, it’s not about describing your idea or product. We can include here the main benefits and how it will differentiate your from competitors as well.
- Customer Segments. The next step is to decide who are your customers. We may focus only on the youth or people from a concrete country. We will list here the segments of potential customers (we can have more than a segment). However, remember that we will have to validate if they are our target audience and discard them if necessary.
- Channels. This block will basically contain the distributions channels. How we will deliver our product to the customers? We will do it thought a website or a mobile app? Will we need to distribute our hardware using trucks?
- Customers Relationships. Now we have our value propositions, our segments defined and the way we distribute the product. It’s essential to take care of our customers and how we engage them. This block also includes how we will acquire new customers and how we will increase the numbers.
- Revenue Streams. Money is always an important fact to take into account. Here we will define how we will make money from the product we are offering. We have some models like the freemium model, the subscription model or simply selling the product directly to the customers.
- Key Resources. We need some resources in order to make our Business Model work. This section will include the assets we need, like capital, patents or human resources.
- Key Partners. Sometimes we need some partners to make it work. We can include here partnerships with other companies or material providers.
- Key Activities. We need to do some activities to create our product or service. Thus, we will have to plan and define the main tasks we need to finish in order to operate. Examples of these activities would be creating an app or a communication tool with your partners.
- Cost Structure. Last but not least, it’s important to control and have a clear vision of our expenses and costs. We will include here the cost of the different resources and activities.
Today we have seen how to define your Business Model elements using a simple and clear way. However, it’s important to remind you that you must validate each block of the canvas. Iterating the Business Modal Canvas when you find something that is not working it’s essential to clarify your ideas and avoid failure. Ah, one more thing! Feel free to download the canvas image and use it!
See you in the next post!
Originally posted here