In 2010, Alex Osterwalder and an online community of co-creators developed, designed, and launched the book ‘Business Model Generation.’
In just under a decade, the book has revolutionized, for many, the way that we plan, forecast and roll out new businesses. The book clearly defined what a business model is:
“the rationale of how an organization creates, delivers and captures value.” Business Model Defined
And they created a strategic, visual tool known as the business model canvas. Why?
Innovators, entrepreneurs, executives and dreamers alike needed a tool to visually map out, share, dissect, rework, and ultimately refine their ideas and innovations into a structured format.
What is the Business Model Canvas?
The 9 Building Blocks
There are 9 Building Blocks in the Business Model Canvas.
What unique value does a company’s product or service create for customers?
What group(s) of customers is a company targeting with its product or service?
How does a company plan to build and maintain relationships with the customers it is serving?
What channels does a company use to acquire, retain and continuously develop its customers?
How is a company pulling all of the above elements together to create a revenue stream(s) and generate cashflow?
The above 5 Building Blocks represent the right side of the canvas, and contribute to the Revenue side of the business model.
What assets and knowledge does a company possess that allow it to deliver its value to customers in ways that other companies can’t?
What activities does a company engage in that allow it to execute its strategy and either establish a presence in the market or gain market share?
What strategic and cooperative partnerships does a company form to increase the scalability and efficiency of the business?
What are the key costs associated with running the business and how can key partnerships/resources be leveraged to reduce the cost structure?
The remaining 4 Building Blocks come together to form the left side of the canvas, and contribute to the Cost Structure of the business model.