The business miracle no longer happens somewhere in the middle
At last week’s Entrepreneurship 101 lecture, Mark Zimmerman, chief information officer at MaRS and advisor to the MaRS information technology, communications and entertainment practice, spoke about the Business Model Canvas.
He began his presentation by describing the 1990s formula of writing business plans.
(wild guess x some assumption of a miracle that happens somewhere in the middle x [another] wild guess)
What that formula produced for Mark, as someone who has spent considerable time supporting entrepreneurs, is a 192-page business plan for a real estate startup.
Today, Mark recommends the Business Model Canvas, a concise and shareable tool for expressing the what, who, why and how of your business, if you don’t really require a business plan.
The Business Model Canvas consists of the following elements.
- Customer segments: Who do you serve?
- Value proposition: What problem do you solve or what job does your product do? It’s not about simply stating “I have a better mouse trap”; it’s about expressing what exactly your mouse trap does better and how it does it.
- Channels: How do customers find you? How do they buy your product? How do you deliver your product?
- Customer relationships: What types of relationships do you have with your customers? This should express what types of relationships your customers have with you as opposed to what types of relationships you have with your customers. A great test of this relationship is whether or not your customers will give you money.
- Revenue streams: How do you get paid? The canvas can be expressed using different colours for multi-sided models.
- Key activities: What things must you do to stay differentiated?
- Key resources: What resources do you need to accomplish those activities?
- Key partners: Who else do you need to make your model work?
- Cost structure
- Social and environmental costs, as well as social and environmental benefits, which are an addition to the canvas for social innovation businesses.
All in all, your Business Model Canvas should produce a clear path to a net benefit regardless of the viewer, whether that viewer is you, your customer or an investor. If you’re a pro, you’ll be able to complete your Business Model Canvas with just pictures. For now though, let’s just focus on paring down that 192-page business plan to one comprehensive canvas.
For more great information on the Business Model Canvas, check out the video from Mark’s Entrepreneurship 101 lecture.
Produced by MaRS Media.
Next lecture: Business Plan and Other Communication Tools on Wednesday, December 4, 2013
- Slides: Business Model Canvas
- Article: Business model design
- Article: Business models
- Workbook: Business Model Design
This past week we also re-launched the Up-Start! Competition. To review the details of the competition and how to apply, check out our slides.
Want to connect?
- Join the Entrepreneurship 101 LinkedIn Group.
- Follow the conversation on Twitter: #ent101.
- Get updates on Vimeo.
- Download the course schedule.
- Download the course syllabus.
Gina was the interim manager of MaRS’ Entrepreneurship & Innovation Series. Prior to joining MaRS, Gina worked in the small business and startup space in a variety of roles, with a focus on business development, project management and communications. She recently completed her MBA at the Rotman School of Management. See more…