The Business Model Canvas is a tool designed by Alex Osterwalder and Yves Pigneur that uses nine boxes to describe a company’s business model. It was not originally conceived for the startup world, but designed to
|THE BUSINESS MODEL CANVAS 9 BOxES|
|Key Partners: Third-party organizations, the resources they provide, and activities they conduct that are critical to the business model; could be suppliers, distributors, channel partners, and so on.|
|Key Activities: What activities must the business conduct in support of the business model? What activities are they experts at?|
|Value Propositions: What value does the business model provide to customers—what needs are being addressed and problems solved? What combination of products and services are required to fulfill the promise? What desired outcome is derived to the customer?|
|Customer Relationships: How you market, sell, support, and otherwise service, whether direct, through intermediaries, online, and so on.|
|Customer Segments: Groups of human beings sharing similar needs, characteristics, and behaviors who will make ideal customers.|
|Key Resources: What human, physical, and intellectual resources are needed to create and deliver the promised value to the customer?|
|Channels: What are the paths needed to market, sell, and distribute products to customer segments?|
|Cost Structure: What forms the basis for the cost of your product? What must you cover immediately with sales?|
|Revenue Streams: How will you make money?|
more simply describe complex, large enterprise business models. It provides a means of determining where innovators or continuous improvement professionals might focus their efforts to increase revenue or growth.
Blank introduced the canvas to the startup world, inviting entrepreneurs to use it in place of traditional business plans. The canvas proved far simpler than attempting to describe all the assumptions Blank laid out in The Four Steps. It also helps founders focus on those aspects of a business model that need to be tested first. Students update the values in the boxes as they learn.