Before thinking only about the next revolutionary concept, let’s not forget that it’s not only the idea that matters, but also its execution. This concept is well assessed by the Business Model Canvas, which we are going to present in brief in this post.
Traditional business literature does not often work well with startups. There is a generalised misconception in business management, suggesting that starting a new business is similar to managing an existing one. This could not be farther from the truth. Aspiring entrepreneurs have to face the fact that literature and academia have not yet cracked the code of starting a successful venture.
Entrepreneurship and new product development will always be uncharted territory and we need to establish new perspectives on how to structure the logic our business will pursue.
Here’s a breakdown of this article’s content
1. The idea is not enough
2. The structure of the business model canvas
3. Conclusions and suggestions for further research
The idea is not enough, you need a good business model too. A second misconception suggests that in order to come up with a successful company you need to focus on developing a great idea. The honest truth is that the idea is not enough, you need an appropriate business model to deliver value to your customer. But fear not, the Business Model Canvas is here and is going to assist you with crossing the desert.
The importance of failing is downplayed. As any entrepreneur can tell you, as an entrepreneur you need to identify and manage risks. There are many risks associated with starting a company, and it’s hard for anyone to come up with a clear strategy to develop your organisation from day one. What you need to do is testing, trying, failing, trying again. In the business literature, there are very few models which are actually able to contemplate failure, as some business areas praise themselves of almost being exact sciences. The business model canvas, however, can help you with the ‘not knowing stage’ of your venture and allow you not to focus on the answers but to focus on the questions.
In my opinion, a good businessman tries to identify the right questions that need to answered, more than any direct solution to a problem. This is why the BMC revolves around 9 essential questions, that need to be answered in a clear, concise and coherent logic.
Here’s the canvas with its essential blocks.
The BSC is essentially split into two sides, the right side of the canvas allows you to understand what your company want to be and what value it wants to deliver to its target audience.
If I dared to provide a guideline, I would suggest to:
Start with the idea. Understand what is at the core of your business and what problem you want to solve for your customers. If you look at the current Unicorns (societies valued above 1 billion dollars) you’ll see that nobody tries to reinvent the wheel. These are the 9 steps they built their companies around.
Now that you’ve decided what you want to be for your customers, it’s time to look at how you can deliver on your promises.
There are a variety of factors to be considered. It’s this complexity which encourages us to use a visual tool to step back and take into account the logic that needs to glue our business together. If you start lean you can try and make mistakes, change your answers, change your beliefs, challenge your assumptions, make changes every day.
Don’t try to get the business model right from the start, use post-its and erasable pens instead!
By looking at the current trends in business we are then drawn to realise that over the last decade business management has switched from managing products to managing different business models. An exciting way to approach the future of this model pertains to how companies, are now becoming fully aware of the opportunities to integrate new exciting product and service ideas with a variety of business models, capable of harvesting their innovation potential, creating more than a product portfolio, but a business model portfolio.
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