The Business Model Canvas
The Business Model Canvas (BMC) has been around the startup block since 2005. It has often been billed as an alternative to the traditional, long-form business plan. When many in the startup community hear “business plan,” they think of bank loans and lifestyle businesses, not VCs and high-growth startups.
Before our conversation with Dave Cass — former Founder and CEO of Uvize (acq.), Adjunct Professor at the Leeds School of Business, and Managing Director of the Techstars Workforce Development program — we questioned whether the BMC belonged in the modern founder’s tool belt.
After our conversation… it does.
First, an Overview
The BMC is a strategic management framework that allows you to visualize, understand, and iterate on business models in a single, one-page document.
It's divided into nine sections, each representing a key business component: Customer Segments, Value Propositions, Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key Partnerships, and Cost Structure.
The BMC as a Framework for Founders
During our conversation, Dave shared his insights on how the BMC can be used as a framework for founders to navigate the complexities of building and scaling a startup.
The BMC is a valuable tool for startups because it helps founders to…
Understand their business model: The BMC provides a clear and concise overview of how a business creates, delivers, and captures value.
Identify key assumptions: The BMC helps founders to identify the key assumptions underlying their business model.
Test their business model: The BMC can be used to test different business model hypotheses.
Communicate their business model: The BMC is a visual tool that can be used to communicate a business model to others.
Our main takeaway from the conversation is that, like a traditional business model, the value is in the exercise and how the BMC is leveraged and iterated over time.
Like quality goals, company values, or a financial model, returning to your BMC on a regular cadence to update and discuss the core components of your startup as it grows is where the real value lies.
The BMC in Action
Dave shared several examples of how he has used the BMC in his own entrepreneurial journey and how he teaches his students at both the University and Techstars. He highlighted the importance of using the BMC as a "visual tool" to track the impact of new information and the cascading implications that move throughout the business model.
Dave also emphasized the importance of using the BMC as a "communication tool" to communicate the business model to others, such as investors, customers, and partners. He noted that the BMC can be used to answer questions such as "What if this happens?" or "How do you think about this?" completely and holistically.
Tips for Using the BMC Effectively
Start with the customer. The customer is the guiding force behind what you do. Identify your customer segments and their needs.
Keep it simple: The BMC is not meant to be information-rich. Focus on the most important pieces of your business model.
Make it dynamic: The BMC is a living document. Update it regularly as your business evolves. We’d recommend a bi-annual cadence but quarterly can work well in a rapidly changing environment (e.g., pre-seed or seed stages).
Use it as a communication tool: The BMC can be used to communicate your business model to others.
Don't be afraid to be wrong: The BMC is a tool for learning. Test your hypotheses and change your business model.
Get Started
Most design and collaboration tools have BMC templates. We recommend using one on something like Miro or simply grabbing a large sheet of paper and some sticky notes.
Here are a few final things to keep in mind as you start using the BMC:
Collaborate with your team: The BMC is a team effort. Involve your team in the process of creating and updating your BMC.
Use it as a starting point: The BMC is just a starting point. Use it to generate ideas and then dive deeper into each building block.
Don't be afraid to experiment: There is no one right way to use the BMC. Experiment with different approaches to find what works best for you.
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