Business Canvases have emerged as a useful visual communication tool in the last decade, and the types of canvases are therefore rapidly increasing. These visual tools allow us to quickly summarize and communicate mental images with other business stakeholders… Additionally, the various components (boxes marked) act as anchors to aid the consideration and deliberation about choices that need to be made regarding these components.
The Business Model Canvas (BMC), developed by Alex Osterwalder, has an intuitive appeal. On the left hand of the value proposition box, one could capture all the choices that need to be made on the solution market aspects and the right of the box, all the choices made regarding the factor market aspects. Each box and the common lines between the boxes are reflective of the design choices one would need to make about the business. If used prudently, one could think through various choices that a business needs to make, evaluate the choices, and make informed decisions that potentially improve the chances of a business surviving.
Following the BMC, several other canvases have also emerged to the forefront. Some of these are focused on sub-problems of building a business like – the value proposition canvas, the lean canvas, customer forces canvas etc. Some of these canvases focus exclusively on understanding what needs to be built into the product – and are captured in product canvases. We also have the Digital Platform Canvas and the Social Enterprise canvas based on the specific nature of the business.
Often a common mistake an entrepreneur makes in using the tools is just aimed at filling the canvas and believing that they are now on the course to building a venture. Canvas is just a snapshot of the venture’s image, in which it captures what you think about the business. It does not mean that you have ticked all the necessary elements to become a successful venture, by filling in the various boxes in the canvas. Also, there are no correct or incorrect answers.
Use a canvas as a diagnostic tool to understand and point out issues with your business. Reflect on the points you have made to identify potential issues or understand the problems you face in a new light. The design of BMC links you to a chain of questions across the different components which could get you to design the business better.
For example: If you have a product that you plan to sell to multiple groups of customers, you may ask – Are you looking at the customer segments differently from each other? How do you reach out to individuals among these segments? What is the cost of using a specific channel? What does the channel really provide you? Could you piggyback on an alternate channel instead? What is the implication of the cost of customer acquisition? Am I trading off understanding the customers in-depth, with the ease of access? Which of the product features are valued most by a specific segment?
As you fill in the boxes, you may realize that you already have a complex business model. A start-up could simply fail to deal with such high complexity! You may then use it to sequence your entry into the market. Given that you wish to simplify and keep things under control, what would be the first target customer segment – say a beachhead, would you like to begin with? What would be the additional resources you would gain having entered in with the beachhead segment, beyond just product validation? Does anyone else look up to them as a potential reference group? As explained, by using the BMC above, you could also build on other canvases depending on the problem you intend to address.
Ask yourself:
Which is the right canvas for the problem I am facing currently?
How should I use the visual tool?
Disclaimer-no claim of ownership. Inserted only for demonstration purpose. All rights with the orginal authors.
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