Elements of Entrepreneurship
The Business Model Canvas
I use the Business Model Canvas (BMC) with my high school entrepreneurship students to help them understand the 9 crucial parts of a successful business.
For developing new business models and documenting existing ones, the Business Model Canvas is a valuable strategic management tool.
The “nine elements “ of the BMC were originally proposed in 2005 by Alexander Osterwalder . If you ever get the chance to take one of his superb workshops, do it. Here is his website.
The nine elements of the BMC can be grouped into 3 areas: feasibility, desirability, and viability.
Feasibility:
- Key partners
- Key Activities
- Key resources
Desirability:
- Value Proposition
- Customer Relationships
- Customer Segments
- Channels
Viability:
- Cost structure
- Revenue systems
It’s fascinating that when entrepreneurs think of ideas for a product, system, or service they are going to create, they often move straight to the feasibility part of the process and this is a bad idea. It is absolutely essential to get the “desirability” of what you are designing for right before considering the other factors (feasibility, viability). Desirability means “Do people want it?, feasibility is “How do we do this?”, and viability is “Can we make money?”.
If you do not meet your user’s needs, they will not desire your product, system or service at all and then you are back to square one! You may have to solve for a different issue once you have the “desirability” feature figured out. You can quickly test the “desirability” of your product by going out and asking people. Think about your target user’s pain point, identify the killer feature of your product or service, and then ask them about it. So always start with desirability if you don’t get this right no one will buy your product or service.
