A few hints about using the business model canvas. This represents a very useful and handy system to schematize the development strategy of your startup but a few practical suggestions may be applied:
–KEY PARTNERS: List non just names (not always meaningful for the reader!) but the type of partner; list the partners not random but in order of importance. Try if you can to give informations about redundancy (f.i. are there alternatives ready?)
(it has at least to answer to the following points: Who are our key partners?; Who are our key suppliers?; Which key resources are we acquiring from our partners?; Which key activities do partners perform?)
–KEY ACTIVITIES: List not just process names but try to explain why are rare they so crucial and essential in your own value chain…; list in order of importance. Try if you can to give informations about redundancy (f.i. can you figure out alternatives, can you figure out an outsourcing of such a process?)
(it has at least to answer to the following points: What key activities do our value propositions require?)
-KEY RESOURCES: try to make also for this point something more than a list…if possible, try to define priorities in order of importance. Try to give to the reader a hint about key suppliers: if they are so specific/rare and, sometimes, there is no alternative for same of them, is necessary to mention them also in the “key partner list” because that’s what they really represent for you!!!
(it has at least to answer to the following points: What key resources do our value propositions/business model require?)
–VALUE PROPOSITION: work hard in this section pf the canvas. It should be included: an inspiring vision of your startup; a mention of the possibility to realize it in steps/modules (f.i. what is a possible MVP?); can you list in this section at least 4-5 key values that make your value proposition unique? (and, at the same time, characterize you as an entrepreneur)
(it has at least to answer to the following points: What value do we deliver to the customer? Which one of our customers’ problems are we helping to solve?; What bundles of products and services are we offering to each segment?; Which customer needs are we satisfying?;What is the minimum viable product?)
–CUSTOMER RELATIONSHIP: This section is important and strictly connected with the “customers “ area… avoid being too generic. If customer experience is relevant, be specific in briefly describing how this interaction/communication, according to you, will take place…keep in mind what are the contents of the “channels” sections: is there a sufficient congruence between the 2 areas of the canvas? Keep in mind the costs, because customer relationship can represent a relevant investment …
(it has at least to answer to the following points: How do we get, keep and grow customers?;Which customer relationships have we established?;How are they integrated with the rest of our business model?; How costly are they?)
-CHANNELS: This section is tricky..be careful with words and try always to explain. Avoid being too generic: you cannot list too many channels if there is no logic behind/without an explanation. Moreover, to adopt a channel carries specific costs and sometimes requests specific efforts and times. (f.i. making an agreement with organised large-scale distribution systems) If a channel/distributor/vendor is essential for developing your business model, is necessary to mention them also in the “key partner list” because that’s what they really represent for you!!!
(it has at least to answer to the following points: Through which channels do our customer segments want to be reached?)
-CUSTOMERS: Try to depict your customer profile really in depth: is the target segment well described and clear for the reader? Did you explain in the canvas why is this specific segment so relevant for you? Is there a rank of the possible targets?
(it has at least to answer to the following points: How do we get, keep and grow customers?;Which customer relationships have we established?;How are they integrated with the rest of our business model?;How costly are they?)
-COST STRUCTURE: don’t be either too vague or too concise: is essential to explain first in a note your cost structure and then try to give an idea of the related importance of every factor. This means also expressing values as a percentage of the total cost in place of expressing values using currency. Moreover, it can be useful to split this section in two or more areas, expressing costs related to first/second year of the business plan, just to make the point clearer for the reader
(it has at least to answer to the following points: What are the most important costs inherent to our business model?;Which key resources are most expensive? ;Which key activities are most expensive?)
-REVENUE STREAM: that’s why you are going through all this job!!!! Don’t forget to explain (maybe splitting the section according to a year -1; year-2 vision) the revenue stream strategy & model. Possible investors /partners will be very careful in reading this area of the canvas. If you can convincingly explain it, then it probably works!!! MVP principles can be very useful in testing the feasibility of the revenue model. Tell also about previous experiences/tests/interactions with customers that can somehow highlight the feasibility of the overall picture.
(it has at least to answer to the following points: For what value are our customers really willing to pay?;For what do they currently pay?;What is the revenue model?;What are the pricing tactics?)
IN A WORD:
- KEEP EVERYTHING IN BALANCE
- THEREFORE, IF YOU CHANGE SOME POINT, ALWAYS TAKE INTO ACCOUNT TO ANALYZE THE CONSEQUENCES ON THE OTHER SECTIONS OF THE MODEL
- REVIEW THE MODEL MANY TIMES AND PERIODICALLY
- USE IT AS A SORT OF ABSTRACT (AND INDEX) OF YOUR TO BE BUSINESS PLAN