How to Start a Business Model Canvas
The business model canvas, developed by Alex Osterwalder, has gained a lot of traction in the start-up space for two key reasons. First, it provides you with a simplified view of the key elements for assessing the viability of a business. Second, it provides a framework for brainstorming and for forming and testing hypotheses. It is an informal presentation of a formalized description of why a business will succeed, built around the value proposition of the business.
Ash Maurya, author of Running Lean, and others in the lean-startup community are building on a variant of this called a lean canvas, where some of the peripheral emphasis is shifted, but the core of the canvas is still the value proposition. Conceptually, the value proposition is the product.
As a product manager or product marketing manager, you can immediately improve your product strategy by grabbing an empty canvas and answering the questions that the canvas prompts. Start with the value proposition—the description of your product. Starting to fill out the business model canvas (or lean canvas) can be very intimidating because the straightforward questions are so sweeping in scope. The trick is to start with the core—the value proposition.
April Dunford, successful product marketing expert and author, with experience in both the start-up and large company realm, has developed a worksheet that she uses with her teams to clarify and drive clarity in thinking about a value proposition. Her template focuses on the intersection of great ideas from Crossing the Chasm, her own experience, and the core of business model canvases.
Part of what makes this canvas-based approach—a spatial layout of interconnected ideas—powerful is the iterative conceptual cycles. What makes April’s worksheet so powerful is that it immediately drives some of the key questions that (1) make sure your proposition actually has differentiable value, and (2) make sure that you identify the customers who will value your proposition. Too many products are solutions looking for a problem, which means they aren’t actually products—merely inventions.
Use the value-proposition worksheet to kick-start the process. The answer to the first question in the worksheet is the first Sticky Note you put in the value-propositions section of the canvas. As you work through the worksheet, you will start adding other information into the canvas and quickly start iterating, as the connections jump out at you. The worksheet has a bonus of being particularly useful as a product marketing asset.
