After several years “on the market” there are now multiple Business Model Canvas adaptations floating around. People sometimes ask me about them. This blogpost provides an answer by explaining the Canvas through the analogy of a Theater (watch the video). It shows why we got it right and why most adaptations are broken.

When Yves Pigneur and I set out to find a better way to describe business models we had the following objective in mind: What are all the most important decisions you make when you design your business. We were not interested in operational or organizational issues, but aimed to find a way to describe the blueprint of your business strategy, the core elements that constitute the heart of how your business works.

Our research (i.e. my Phd dissertation) led us to the nine building blocks that now constitute the foundation of the Business Model Canvas. If you take away one block, you actually lose the big picture. You lose the overview of ALL the elements that compose your business logic. It will be incomplete. The following video from Strategyzer.com, our online business model tool, illustrates this nicely by comparing the Canvas to a Theater:





A theater has a front stage and a back stage. People don’t really care about the back stage, but it is necessary to make the front stage possible. The front stage is what people are interested in and it is what they are willing to pay for. The backstage enables the front stage and it is what costs money. Like a theater, a business model has a front stage (which leads to revenues) and a backstage (which makes up for the costs). Eliminate any of the elements of the Business Model Canvas and you lose the big picture… Hundred thousands of people around the world have come to value this.

By the way, if you liked the video above you should sign-up for Strategyzer.com. As an early adopter you will get 50% discount and only pay $150.- USD instead of $300.- USD. In a couple of weeks or a few months we will probably upgrade to Beta and drop the discount. Besides a really cool and collaborative business model tool you will find an increasing amount of content like the above video inside our Strategyzer Academy.

FYI: A prototype version of this video was posted on this blog earlier last year.

Does this sound like you? You strive to help companies unlock potential by using better business design techniques. You have already done so by researching, applying and “teaching” practical and visual business design tools, in particular the Business Model Canvas and the Value Proposition Canvas.

The opportunity

Work with me and the team behind Business Model Generation (500,000+ copies in 26 languages), the Business Model Toolbox for iPad, Strategyzer.com, and the Business Design Summit. Your research on interesting cases, their business model mechanics and their transformation into remarkable presentations and stories will transform the way people design businesses around the globe. You work from home, anywhere in the world, and with flexible working hours (potentially part-time).

What we expect

You have a deep curiosity for how organisations work and could work better. Your “hunger” to do your best work ever is insane and you are more motivated and better qualified than anybody else to do this job. You have a business research background, potentially a PhD, but also have practical experience in a company, as a consultant, or as an entrepreneur. Your conceptual and practical understanding of the Business Model Canvas is proven. Finally, you are NOT an asshole.

The challenge

You will put together amazing case studies and stories that help people understand business model innovation and transformation. What I’m taking about here are not the traditional text-heavy Harvard Business School cases, but beautiful, simple, and captivating presentations and stories that open people’s eyes to the potential and particularities of business model innovation (cf SunEdison, Re-Inventing How We Do Start-Ups!). You will work with me and potentially others from the team on a regular basis via Skype.

How to apply:

• Tell us: Which business design methods you deeply understand (your level: 0 to 10 / 0=never heard of)? Business Model Canvas (Osterwalder & Pigneur), Customer Development (Blank & Dorf), Lean Startup (Eric Ries), Strategy Maps (Kaplan & Norton), Disruptive Innovation (Clayton Christensen), Jobs-to-be-done (Christensen, Anthony, Ulwick), Value Proposition Canvas (Osterwalder, Pigneur, Smith, Bernarda), Blue Ocean Strategy (Kim & Mauborgne).
• Tell us: Which of the following authors have you read? Mark Johnson, Rita McGrath, Vijay Govindarajan, Chris Trimble, Nancy Duarte, Garr Reynolds, Dan Roam, Dave Gray, David Sibbet, John Medina.
• Show off your skills: Compare the business models of Apple, Google, Amazon, Microsoft, and Facebook.
• Share: Your expectations (including salary) and a story that left a mark on your career and thinking

Apply: send your application with all of the above to xxxxx (sorry, submissions closed) (tip: don’t forget that my schedule is pretty busy and that I don’t have time to read a lot of text

Have you ever been in one of those endless meetings, where smart people sit around a table, talk a lot, but don’t get to a real outcome? My friend and author Dan Roam calls that “Blah Blah Blah”. Over the last couple of years I saw first hand how visual methods like the Business Model Canvas can end blah blah blah and enable clear and tangible strategic conversations. This post shares a wonderful story that illustrates that.

My biggest learning from working with senior executives, consultants and entrepreneurs around the globe was that we waste a lot of time with talking without necessarily understanding each other. This happens because we just use words, without using visual concepts and tools that could facilitate the conversation.

It seems that the higher you get in the hierarchy of an organization, the worse it gets. As if the problems “at the top” were easy enough to discuss without sketching them out, without making them tangible. Have you ever seen a board room with a whiteboard?

This is what it looks like:

And guess what happens if to those smart business people who only use words and no shared visual language:

Of course the above are my own experiences and opinions, so I was blown away when my friend Lisa K Solomon (who’s upcoming book you should get) shared the story of Sue with me:

I was sitting in a senior manager meeting listening to a perfectly normal PowerPoint presentation by one of our regional directors. He had a complex problem – a large asset that we are contractually obligated to maintain is conflicting with another priority project – what should he do? He was asking for honest-to-god help, but after delivering his PowerPoint, the other managers in the room were still having trouble seeing the big picture.

There were many partners, influences, and beneficiaries along with many policy options – managers tried to give feedback but they spent a lot of time asking the director to reexplain the context.

Finally during a lull while people were eating lunch, the director just asked point blank, “does anyone have any tools or suggestions on how I can better manage this complex issue?” In 10 seconds, I downloaded the Business Model Canvas, jammed the VGA cord into my laptop and asked, “How about this?”

I ran through a few of the blocks explaining how this was a great tool to 1) put all of the parts into one place 2) have more meaningful and specific conversations (people can see the parts all at once so you don’t have to keep reminding them of the structure verbally) and 3) immediately record feedback/suggestions in one place that makes sense.

The regional director is really genuinely interested in working with the canvas and asked if I’d be willing to help his team get started (gulp!). Our asset manager came over and said, “hey, I know that thing!” – he’s using it with a consultant to draft and test a potential new tool for conservation management. He invited me to audit the meetings with the consultant which I’ve started – it was surreal to sit in on a meeting where they reviewed an empathy map!

Just to give some quick context, I never actually speak during senior manager meetings as an executive assistant. But I really just could not hold it in any longer – I had to “whip out” the business model canvas. I’m a little terrified of what I may have started but I know that it could be a great tool for many of our project directors so I’m going to be “whipping it out” a lot more.

This will be the result of Sue’s efforts:

With a better outcome:

And of course the Business Model Canvas is just one visual tool that works. In my two previous blogposts I talked about our new plug-in, the Value Proposition Canvas. Check it out!

Finally, two other authors besides Dan Roam (Blah Blah Blah) that will help you go beyond just talk are Dave Gray, author of Gamestorming (and more recently The Connected Company), and David Sibbet, author of Visual Meetings and Visual Teams.

In my last post I described a new business tool, the Value Proposition Designer Canvas. In this post I outline how you can use the tool to not only design Value Propositions, but also to test them. You’ll learn how you can supercharge the already powerful Lean Startup and Customer Development principles to design, test, and build stuff that customers really want.

The Value Proposition Designer Canvas (VP Designer Canvas) allows you to zoom into the details of your Value Proposition and the Customer Segments you target. You can use it as a poster (cf image below) to design better Value Propositions with sticky notes. However, to make sure your customers really want what you design, you’ll need to test all the assumptions you make with the VP Designer Canvas.





We already now know how to do this kind of designing and testing for business models: by combining the Business Model Canvas with the Customer Development process. Steve Blank has impressively demonstrated this in his work.

We can achieve the same for Value Propositions by combining the VP Designer Canvas with the Lean Startup process. This will help us more systematically work towards achieving what the startup movement calls a product-market fit or problem solution fit. In other words, building/offering stuff that customers really want.

In a nutshell, the Lean Startup process essentially consists of iterating through the “building” of, “measuring” of, and “learning” from product (and service) prototypes. The Lean Startup movement calls these prototypes Minimum Viable Products (MVP).

Supercharge the Lean Startup Process

The VP Designer Canvas can add two crucial things to this process that are currently missing. Adding them to the mix will bring us to a whole new level.

Firstly, the VP Designer Canvas gives you a simple and practical way to rapidly sketch out WHAT you are building and how you believe this will create customer value/benefits, as well as WHY your are building it: which customer jobs, pains, and gains you intend to address.

Doing this BEFORE building an MVP, will help you better track and manage the testing, measuring, and learning process.

Secondly, the VP Designer Canvas helps you distinguish between Product/VP and Customer assumptions. If you “just” build an MVP to measure and learn, you won’t know if a negative outcome of your experiment is related to your MVP or to a lack of customer interest.

In science such a significant bias would invalidate your results all together. Hence, you need to separate the testing of your product/VP assumptions (i.e. WHAT) and your customer assumptions (i.e. WHY) whenever possible. The latter is something you can observe and investigate even before designing an MVP.

Using the Value Proposition Designer Canvas – Step by Step

Let me walk you through a rough step by step process of how to use the VP Designer Canvas for testing. In reality, of course, these steps will be less sequential and much more messy. You’ll also want to adapt this process to your needs and circumstances.

1. Fill Out Your VP Designer Canvas.

Describe the JOBS your customer is trying to get done and outline their PAINS and GAINS. List the PRODUCTS and SERVICES you intend to offer and describe how you believe they will ALLEVIATE your customer’s PAINS and CREATE GAINS. You can use the trigger questions in the poster and in my last blogpost if you need help.

Voilà, you now have a great list of Produc/VP and Customer assumptions. You described who you think customers are and what you think would create value for them. It’s your best guess – but still just your (smart) opinion.

2. Test your Customer Assumptions

Now it’s time to “get out of the building” – to use Steve Blank’s terms – in order to verify your customer assumptions. Talk to as many (potential) customers as possible to verify if they really are trying to get those JOBS done that you described in the VP Designer Canvas. Find out if those JOBS are crucial to them or unimportant? Find out if the really have those PAINS you believed they have. Are those PAINS severe or minor? Verify if they really value the GAINS you believed they value.

It’s even better if you can test your customer assumptions more rigorously. What I mean with that is going beyond simply talking to customers, but not yet building an MVP. The design professions have several techniques to achieve that.

3. Adjust your Customer Assumptions Based on Insights

Now that you better know who your customers are you should revisit the Customer Profile in your VP Designer Canvas. Ideally you now understand the significance of your customers’ JOBS, the severity of their PAINS and the intensity of their desired GAINS.

4. Redesign your Value Proposition Based on Insights

Adjust which pains and gains you want to focus on, based on your customer insights. Then redesign your Value Proposition accordingly. Don’t forget that great Value Propositions rarely address all customer PAINS and GAINS. They address a few really well!

This will give you a readjusted VP Designer Canvas.

5. Start Testing your Value Proposition

Now it’s time to build your MVP and continuously test and adjust your Value Proposition based on what you learn.

The VP Designer Canvas will serve as your map to permanently track assumptions and tests, while you’re pivoting through the Lean Startup process. The moment this circle ends is when you’ve achieved a fit between your Value Proposition and what your Customers expect. This is what the startup movement calls product-market fit or problem-solution fit. It’s when you build stuff that customers really want!

Don’t hesitate to give me your feedback, since this process is just a first suggestion of how to use the Value Proposition Designer Canvas.

I’m a big fan of the Lean Startup movement and love the underlying principle of testing, learning, and pivoting by experimenting with the most basic product prototypes imaginable – so-called Minimal Viable Products (MVP) – during the search for product-market fit. It helps companies avoid building stuff that customers don’t want. Yet, there is no underlying conceptual tool that accompanies this process. There is no practical tool that helps business people map, think through, discuss, test, and pivot their company’s value proposition in relationship to their customers’ needs. So I came up with the Value Proposition Designer Canvas together with Yves Pigneur and Alan Smith.

The Value Proposition Designer Canvas is like a plug-in tool to the Business Model Canvas. It helps you design, test, and build your company’s Value Proposition to Customers in a more structured and thoughtful way, just like the Canvas assists you in the business model design process (I wrote more about how we came up with this new tool previously).

The Canvas with its 9 building blocks focuses on the big picture. The Value Proposition Designer Canvas zooms in on two of those building blocks, the Value Proposition and the Customer Segment, so you can describe them in more detail and analyze the “fit” between them. Companies need to get both right, the “fit” and the business model, if they don’t want to go out of business, as I described in an earlier post on failure. The tools work best in combination. One does not replace the other.

In this post I’ll explain the conceptual tool. In my next post I’ll outline how you can use it for testing in combination with the Customer Development process by Steve Blank and the Lean Start-up process by Eric Ries. The Value Proposition Designer Canvas will allow you to better describe the hypotheses underlying Value Propositions and Customers, it will prepare you for customer interviews, and it will guide you in the testing and pivoting.

The Value Proposition Designer Canvas

As mentioned above, the Value Proposition Designer Canvas is composed of two blocks from the Business Model Canvas, the Value Proposition and the corresponding Customer Segment you are targeting. The purpose of the tool is to help you sketch out both in more detail with a simple but powerful structure. Through this visualization you will have better strategic conversations and it will prepare you for testing both building blocks.

Achieving Fit

The goal of the Value Proposition Designer Canvas is to assist you in designing great Value Propositions that match your Customer’s needs and jobs-to-be-done and helps them solve their problems. This is what the start-up scene calls product-market fit or problem-solution fit. The Value Proposition Designer Canvas helps you work towards this fit in a more systematic way.

Customer Jobs

First let us look at customers more closely by sketching out a customer profile. I want you to look at three things. Start by describing what the customers you are targeting are trying to get done. It could be the tasks they are trying to perform and complete, the problems they are trying to solve, or the needs they are trying to satisfy.

Ask yourself:

• What functional jobs is your customer trying get done? (e.g. perform or complete a specific task, solve a specific problem, …)
• What social jobs is your customer trying to get done? (e.g. trying to look good, gain power or status, …)
• What emotional jobs is your customer trying get done? (e.g. esthetics, feel good, security, …)
• What basic needs is your customer trying to satisfy? (e.g. communication, sex, …)

Customer Pains

Now describe negative emotions, undesired costs and situations, and risks that your customer experiences or could experience before, during, and after getting the job done.

Ask yourself:

• What does your customer find too costly? (e.g. takes a lot of time, costs too much money, requires substantial efforts, …)
• What makes your customer feel bad?(e.g. frustrations, annoyances, things that give them a headache, …)
• How are current solutions underperforming for your customer? (e.g. lack of features, performance, malfunctioning, …)
• What are the main difficulties and challenges your customer encounters? (e.g. understanding how things work, difficulties getting things done, resistance, …)
• What negative social consequences does your customer encounter or fear? (e.g. loss of face, power, trust, or status, …)
• What risks does your customer fear? (e.g. financial, social, technical risks, or what could go awfully wrong, …)
• What’s keeping your customer awake at night? (e.g. big issues, concerns, worries, …)
• What common mistakes does your customer make? (e.g. usage mistakes, …)
• What barriers are keeping your customer from adopting solutions? (e.g. upfront investment costs, learning curve, resistance to change, …)

Rank each pain according to the intensity it represents for your customer. Is it very intense or is it very light. For each pain indicate how often it occurs.

Customer Gains

Now describe the benefits your customer expects, desires or would be surprised by. This includes functional utility, social gains, positive emotions, and cost savings.

Ask yourself:

• Which savings would make your customer happy? (e.g. in terms of time, money and effort, …)
• What outcomes does your customer expect and what would go beyond his/her expectations? (e.g. quality level, more of something, less of something, …)
• How do current solutions delight your customer? (e.g. specific features, performance, quality, …)
• What would make your customer’s job or life easier? (e.g. flatter learning curve, more services, lower cost of ownership, …)
• What positive social consequences does your customer desire? (e.g. makes them look good, increase in power, status, …)
• What are customers looking for? (e.g. good design, guarantees, specific or more features, …)
• What do customers dream about? (e.g. big achievements, big reliefs, …)
• How does your customer measure success and failure? (e.g. performance, cost, …)
• What would increase the likelihood of adopting a solution? (e.g. lower cost, less investments, lower risk, better quality, performance, design, …)

Rank each gain according to its relevance to your customer. Is it substantial or is it insignificant? For each gain indicate how often it occurs.

Products & Services

Now that you sketched out a profile of your Customer, let’s tackle the Value Proposition. Again, I want you to look at three things. First, list all the products and services your value proposition is built around.

Ask yourself which products and services you offer that help your customer get either a functional, social, or emotional job done, or help him/her satisfy basic needs?

Products and services may either by tangible (e.g. manufactured goods, face-to-face customer service), digital/virtual (e.g. downloads, online recommendations), intangible (e.g. copyrights, quality assurance), or financial (e.g. investment funds, financing services).

Rank all products and services according to their importance to your customer. Are they crucial or trivial to your customer?

Pain Relievers

Now lets outline how your products and services create value. First, describe how your products and services alleviate customer pains. How do they eliminate or reduce negative emotions, undesired costs and situations, and risks your customer experiences or could experience before, during, and after getting the job done?

Ask yourself if they…

• … produce savings? (e.g. in terms of time, money, or efforts, …)
• … make your customers feel better? (e.g. kills frustrations, annoyances, things that give them a headache, …)
• … fix underperforming solutions? (e.g. new features, better performance, better quality, …)
• … put an end to difficulties and challenges your customers encounter? (e.g. make things easier, helping them get done, eliminate resistance, …)
• … wipe out negative social consequences your customers encounter or fear? (e.g. loss of face, power, trust, or status, …)
• … eliminate risks your customers fear? (e.g. financial, social, technical risks, or what could go awfully wrong, …)
• … help your customers better sleep at night? (e.g. by helping with big issues, diminishing concerns, or eliminating worries, …)
• … limit or eradicate common mistakes customers make? (e.g. usage mistakes, …)
• … get rid of barriers that are keeping your customer from adopting solutions? (e.g. lower or no upfront investment costs, flatter learning curve, less resistance to change, …)

Rank each pain your products and services kill according to their intensity for your customer. Is it very intense or very light? For each pain indicate how often it occurs.

Gain Creators

Finally, describe how your products and services create customer gains. How do they create benefits your customer expects, desires or would be surprised by, including functional utility, social gains, positive emotions, and cost savings?

Ask yourself if they…

• …create savings that make your customer happy? (e.g. in terms of time, money and effort, …)
• … produce outcomes your customer expects or that go beyond their expectations? (e.g. better quality level, more of something, less of something, …)
• … copy or outperform current solutions that delight your customer? (e.g. regarding specific features, performance, quality, …)
• … make your customer’s job or life easier? (e.g. flatter learning curve, usability, accessibility, more services, lower cost of ownership, …)
• … create positive social consequences that your customer desires? (e.g. makes them look good, produces an increase in power, status, …)
• … do something customers are looking for? (e.g. good design, guarantees, specific or more features, …)
• … fulfill something customers are dreaming about? (e.g. help big achievements, produce big reliefs, …)
• … produce positive outcomes matching your customers success and failure criteria? (e.g. better performance, lower cost, …)
• … help make adoption easier? (e.g. lower cost, less investments, lower risk, better quality, performance, design, …)

Rank each gain your products and services create according to its relevance to your customer. Is it substantial or insignificant? For each gain indicate how often it occurs.

Competing for Customers

Most Value Propositions compete with others for the same Customer Segment. I like thinking of this as an “open slot” that will be filled by the company with the best fit. The visualization for this was an idea by Alan Smith, one of my co-founders, and the designer of Business Model Generation.

If you sketch out competing value propositions, you can easily compare them by mapping out the same variables (e.g. price, performance, risk, service quality, etc.) on a so-called strategy canvas.

The Value Proposition Designer Canvas Poster

You can use the Value Proposition Designer Canvas like the Business Model Canvas: plot it as a poster, then stick it up on the wall, and then use sticky notes to start sketching.

Contrary to the Canvas, the Value Proposition Designer Canvas poster and methodology is copyrighted. However, you are free to use it and earn money with it as an entrepreneur, consultant, or executive, as long as you are not a software company (the latter need to license it from us). However, when you us it please reference and link to BusinessModelGeneration.com.

Here is a downloadable draft poster version of the Value Proposition Designer Canvas.

Testing and Pivoting

Using the Value Proposition Designer Canvas as a thinking and design tool is only a start. To get the best out of it you need to combine it with testing and pivoting. In my next blogpost I explain how the Value Proposition Designer Canvas perfectly integrates with the Customer Development and Lean Startup Process. I explain how it helps you substantially when you “get out of the building” as Steve Blank would say.

Last But Not Least: Workshop Date Announcements

We have a couple of 2-day workshops coming up where you can learn about all our tools:

• Save US$600.- with the super-early bird discount on our 2-day San Francisco Workshop on Nov 29/30 2012 (this discount expires Sept 2, 2012)
• Save US$500.- with the early-bird discount on our 2-day Zurich Workshop on Oct 25/26 (this discount expires Sept 9, 2012)

Hope to see you in either San Francisco or Zurich!

My aspiration is pretty simple: I want to change the way people design, test, and build strategies and businesses. Part of that journey is about bringing the best conceptual tools out there online and making them so useful, practical and attractive that no business person can resist. To achieve that my team and I are looking for an outstanding tech co-founder and a senior RoR developer. Do you want to join us?

Our track record:

When we created the Business Model Canvas we created a standard setting business concept for anyone to speak “business model”, and we worked directly with Intel, GE, Ericsson, 3M, P&G, and dozens more.

When we published “Business Model Generation” (#bmgen), we created a new breed of visual and practical business books. #bmgen sold 350,000+ copies in 26 languages since 2010.

With the Business Model Toolbox for iPad, we created the first ever tool for individuals to flesh out business ideas. The app combines the smarts of a spreadsheet with the speed of a napkin sketch.

Now, with Strategyzer (alpha version), we’ve created a beautifully designed, easy to use web-platform for teams to build better business models.

You are… (for the senior RoR developer position)

Our Technical Lead for Strategyzer, passionate about what you do everyday and are doing the best work of your career.

You care about technology, how beautiful products are built, and your are helping us bring on more specialized team members as you grow the product to keep up with an enthusiastic customer base.

You work autonomously in a self directed fashion, and collaborate closely with the core Product and UX team. You believe that great code and great design make for a better product.

You have opportunities (but not obligations) to travel globally to retreats and events.

You finish each day pumped about getting started the next day.


Required skills include:

• Test Driven Development and Continuous Integration
• 2+ years experience with Ruby on Rails
• 7+ years experience in software development
• Experience building scalable web-apps
• Javascript, CoffeeScript
• Selenium
• Git
• Pragmatic software design
• Experience with managing webapp development project from design to implementation

Additional Skills Desired:

• PostgreSQL
• DevOps
• Behaviour Driven Development
• Ability to work with front-end team (CSS3, HAML)
• Experience with Enterprise applications
• Some experience with different modern stacks
• Some experience with multiple cloud platforms
• Ability to coach less experienced developers
• Ability to communicate well with non-technical teammates

Our compensation package includes a competitive salary and equity participation for a tech co-founder and potential equity participation for RoR developer.


Type of position: Permanent
Location: Toronto preferably, but could be anywhere in the world since we are a globally distributed team already
Work hours: Full-time 100% focus, but super-flexi-hours


Tell us about:

• How you’ve scaled an app to more than 1000 concurrent users
• Working in collaboration (your github profile would be good!)
• What you want to know about how we work
• What involvement you’ve had in building a dev team
• A story that left a mark on your career and thinking

Why work at Business Model Foundry?

• You get to work with a team that’s doing the best work of their career, and will help you to do the same.
• You will turn built up momentum into something amazing for an enthusiastic community.
• You follow the no-asshole rule, and so do we.

contact us
jobs@strategyzer.com


Our work culture:

Artists get inspired when they go to scenic places. This was our most recent “workation” in Splugen, Switzerland

Our customers meet us at workshops all year long around the world. Here Alex (co-founder) is onstage in Berlin.

Traditionally, we eat (and drink) a lot. This was traditional Norweigan fare, and it was delicious!

There are a lot of reasons why business models fail. Understanding them can help us better manage risks. In this post I sketch out the four main types of failure.

I’ve been thinking about failure a lot recently. As an early-stage software entrepreneur failure is starring at me big and ugly every morning. Yet, rather than just denying the possibility I prefer understanding and managing the risk of failure. And when I say “failure” I mean the big and hairy type that can put you out of business.

In the brief video below I broadly categorized business model failures into four main reasons:

• Solving an Irrelevant Customer Job
• Flawed Business Model
• External Threats
• Poor Excution

My team and I of course aim to avoid the failures outlined above with the software company we’re building. More importantly, however, we strive to provide the software-based tools that can help us manage the risk of failure in order to build prosperous businesses.

Learning videos, like this one (but produced more professionally) and the ones in my previous posts, will be an integral part of that software package…

Every couple of weeks somebody sends me an email writing that I’m missing a building block in the Business Model Canvas. Often, they point out that competition is missing. They’re wrong. “Competition” is not a business model building block, it’s part of the environment in which you design your business model.

Though I believe we’re too obsessed with competition, it would obviously be naive not to take into account existing or potential competitors when you design your business model. Competition is, however, only one of several elements that are part of your Business Model Design Environment: the environment in which you design your business model, just like an architect designs a building in a particular environment.

The architect’s environment is land use, legal restrictions (e.g. safety regulation, etc.), innovation in materials, the city context, or even societal trends that influence “building tastes”. A business model designer’s environment is characterized by technology trends, competitors, customer jobs and needs, and many, many more, as illustrated in the video below:





Designing business models is a constant interaction between the nine building blocks of the Business Model Canvas, which you control, and the environment in which you are designing it. If you want to learn more about the environmental model my co-author and I came up with, check out page 200+ of our best selling book Business Model Generation.

We came up with this environmental model, because there was no concept out there that looked at the Business Model Design Environment in a simple, holistic, and visual way.

At every talk and workshop I try out something new to see if it sticks with the audience. An image that resonated a lot was describing the Business Model Canvas as a theater with a front stage and a backstage.

What creates value in a theater is the action that takes place on the front stage. It’s what people came for and what they are paying for. The backstage, however, is what makes the front stage possible, it enables the front stage.

The Business Model Canvas is similar. The right-hand side of the Canvas is the front stage. The left-hand side of the Canvas is the backstage. Check out my little sketch outlining the front stage and back stage of the Business Model Theater:

This guestpost tells the special story of how Sebastián Salinas Claro and Joshua Bicknel connected across the globe on the Business Model Hub. They joined efforts in their aim to defeat poverty by teaching entrepreneurship. The results are amazing.

By Sebastián Salinas Claro (with Douglas Cochrane and Joshua Bicknell):

My recent journey illustrates the power of social networks and how linkedin and the Business Model Hub brought me to Kenya – all the way from Chile. It was a fascinating experience that all started when I contacted Alex on Linkedin. I told him how I was teaching the Business Model Canvas to disadvantaged youth in the South of Chile with excellent results. He suggested that I post my story on Business Model Hub, which I did. That’s where the journey starts.

In August Joshua Bicknel browsed the pages of the Business Model Hub and came across my post. He read about the exciting experience I went through introducing the Canvas in Chile. He decided to contact me, keen to hear more. After a few hours on Skype, I declared my intention to travel to Kenya to work with him on a pilot project. It was quite a commitment from me. Few Chileans travel to Kenya, and it was an even bigger leap considering we had never met. But I took the leap and joined his team in Nakuru, East Africas fastest growing City, in October 2011.










Since then we have been working with unemployed youth supporting them to imagine and design innovative new businesses that create employment and defeat poverty. I want to use this blogpost to discuss some of the insights from this experience, in particular the power of the Canvas as a great leveler. We worked with 4th year Commerce students from Egerton University and unemployed young men and women who never finished high school. Both grasped the Canvas equally fast and applied it to imagine impressive new businesses. In fact, on a number of occasions the non-university students actually impressed us more.








One such occasion was in a session with the Salgaa Sparks youth group. In Salgaa there is no rubbish collection. All waste is either dumped on the streets or burnt. It is a fast growing town and a popular nightspot for transit truckers, so the area is becoming increasingly dirty and unsanitary. Sparks came to us seeking help to develop a solution to this problem. Initially, they didn’t imagine starting a business, instead believing the solution to be a volunteer community-cleaning programme. By using the Business Model Canvas we helped them discover a more interesting opportunity altogether.








Firstly, they mapped their idea on the canvas, imagining it as a profitable business, and came up with a rubbish collection scheme. Not a wholly radical idea. A similar schemes exist in other Kenyan settlements. However, they then began to question whether there was any value in the collected waste and soon realized that they could turn the organic materials into fertilizer and sell it to the farmers at $10 a bag. Then they came up with another profitable idea: to rent out their work carts on days when they were not collecting rubbish.





Using the canvas they envisioned, imagined, developed, and refined a very exciting business model with three potential revenue streams. A business that achieves two goals at a time. It cleans-up the environment and provides unskilled youth with jobs. They are currently applying to the Kenyan Youth Enterprise Fund and project that their business will break even in its second month!





Throughout their lives these youth have been excluded because of their social and economic background. By using the Canvas they have, with no formal business training and sometimes not even a high school diploma, produced a very attractive business proposal. This speaks volumes for the capacity of the Canvas as a tool for profound change, empowering communities to start businesses that tackle the current structures of inequality.





We are excited to expand this programme next year. We will take graduates to both Kenya and Chile to work with hundreds of unemployed youth to develop new businesses as we seek to build a global generation of young people with a commitment to defeating poverty through entrepreneurship and not aid. And everywhere we go we will pack the Canvas as the key tool in our arsenal!

Check out our website in www.balloonkenya.com and www.emprediem.com

Signed, Douglas Cochrane, Joshua Bicknell & Sebastian Salinas Claro