Video – Business Model Generation Explained

Business Model Canvas Poster download (http://...

Business Model Canvas Poster download (http://www.businessmodelalchemist.com/tools) (Photo credit: Wikipedia)

The Business Model Generation by Alex Osterwalder and others is one of the best pieces of “startup” literature that every person who wants anything to do with business should read, understand, and teach at least once. One who teaches, knows best. If you are able to explain the business model canvas to someone else, you know it well enough.  The lean startup movement made a variation of this called the “Lean Startup Canvas.”  We, at Anant, added our own “modern enterprise canvas” to help people understand how to organize their People, Processes, Information, and Systems after they’d figure out what their business did and if they were going to be able to make money.

I like to break down the canvas’s 9 blocks into three areas :

Production

  • Key Partners – Who outside your firm will the business be dependent on?  (Modern Enterprise’s Responsibility Areas can be very helpful here)
  • Key Resources – What resources including equipment, people, or space, data, or knowledge do you need?
  • Key Activities – What are the activities that you need to do on a daily, weekly, monthly basis to run the company? (Modern Enterprise’s Responsibility Areas and Processes can be very helpful here)

Value

  • Value Proposition – What are you producing and how are you providing value to the people who are paying you?
  • Cost Structure – What are the fixed, variable costs of the production of this value?
  • Revenue Stream – How are you making revenue?  Is this revenue greater than your cost structure?

Distribution

  • Customer Relationships – How are you maintaining client relationships before, during, and after your customer engagement cycle?
  • Channels – What are the channels you are using to get your value proposition to your customer?
  • Customer Segments – Who are you doing this for? Do they have a pain that you are making a medicine for? Are you making a “candy” product to give them pleasure?

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