Using the Business Model Canvas in product management and digital products

Key Points:

• Business Model Canvas is a tool
• It gives you a bird’s eye view of your business model
• Great for communicating how your business works
• Ideal for looking at opportunities to change (or pivot) your business

Canvas tools are all the rage these days. Many use the Business Model Canvas regularly and it can be very powerful for your planning and growth ambitions.

This post provides a brief overview along with a few tips on how to develop your own business model canvas and get the most out of the tool.

What is the Business Model Canvas?

Think of Business Model Canvas as a blueprint for how businesses work.

• Value Proposition: the key thing you offer your customers.
• Customer Segments: high-level customer types.
• Customer Relationships: how you manage these customers.
• Channels: how your customers interact.
• Key Partners: businesses or people you work with to deliver your value proposition.
• Key Resources: key things you have that enable you to deliver your value proposition.
• Revenues: high-level revenue drivers.
• Costs: high-level cost drivers.
• Key Activities: the important things you do to deliver your model.

The canvas delivers a fully functional and interactive, bird’s eye view of your business model.

Background

The tool was originally developed by Alexander Osterwalder and released in 2008.

His book Business Model Generation, co-written with Yves Pigneur, has become commonplace in large organisation’s Product teams.

Benefits of using it

The Business Model Canvas tool can be used to varying degrees of complexity. All of these aspects have their place but the best bang for your buck comes from the simplest aspects above all; Communication and Pivoting.

Communication

When adding information to the canvas it is important to not be distracted by noise, rather concentrate on only the important aspects of your business. Ask yourself:

Is this material/important enough to summarise this aspect of my business?

This will give you the helicopter view of your business that can explain your model to anyone at a glance.

Communication with clarity will make your life in business much easier. A canvas, when compared with a written overview of your business, is so much easier to digest. This is particularly true when it comes to speaking with current or prospective investors.

Another aspect of the Business Model Canvas that I believe is even more powerful is using it to review how you could pivot your business.

Pivoting your business?

Changing an aspect of your business with a view towards growth or preservation is known as pivoting.

A classic example of the application of this is Google; look at their Search model compared to their AdWords model.

Google started its journey without revenue. Their canvas showed that their value proposition was Search and their customers were the end-users who performed those searches. Over time these customers were almost everyone.

This business model certainly had all of the costs of providing this service but none of the revenue. This would have proven to be non-viable in time without a change.

Google was able to see that they could view their search customer differently as an asset and consequently, businesses would pay money to access this asset. This opened up a new business model “AdWords”.

The Business Model Canvas tool is an excellent way to see these potentials and also help your business adapt.

We at the product agency also like to use online tools, such as Miro, to make these canvases interactive and shareable. A powerful tool, particularly when working with people remotely.

Do yourself a favour and experiment with the Business Model Canvas for your business or you can also reach out to us to discuss this and how we can help you on your digital journey.

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