I discovered Business Model Canvas two years after its 2008 release. I coached a non-profit startup to use it to find its product-market fit in 2017-19. The US Department of Defense found it valuable enough to adapt it to mission-delivery. The George Mason Technology Management Master's program used it as the central theme of its Business Models course while I matriculated in 2019. It is a staple of Lean Startups to ensure the fledgling business knows what it is doing and it is the right thing to do. I submit its use is table stakes for any organization that seeks to understand itself in its context.
The concept behind the Canvas is simple in defining the business architecture. Business Model Canvas provides a visual of an organization's business & mission delivery. It is a simple approach to Knowledge Management, making intrinsic knowledge explicit in a manner easily understood. It is one depiction of the business layer of an Enterprise Architecture. I won't describe the nine facets of the canvas as the Wikipedia article I linked to above provides a credible summary. There are different foci on the Canvas discussed later.
The value of the Canvas is rich when dynamically disproving assumptions. The Business Model Canvas' value is not the simple graphical way it maps how a business delivers value to its customers. The value is its use as a Visual Task Board (Kanban) to validate assumptions and explore additions, changes or removal of different aspects of the business' operations. The business progressively evaluates its riskiest assumptions--those that if true would scuttle the business--and pivot how they intend to operate as those assumptions are proved or disproved.
Businesses are bundles of assumptions that unevaluated can destroy their value proposition. During the initial phase of a business, it validates those assumptions. In the image below, Sweet Sensors is validating its assumptions. Yellow cards depict non-validated assumptions. Green cards depict validated assumptions. Red cards depict disproved assumptions. The 2014 Owlet competition video (10min) powerfully shows the Canvas in action.
Lack of Canvas is an Organizational Weakness. In SWOT analysis, a Weakness is anything that prevents an organization from operating at optimally. Not having an unexamined business model is sub-optimal. Changing a business model without first validating the model works is sub-optimal. Therefore, the lack of a Canvas is an organizational Weakness. If you question whether this is true, can you prove with reasonable certainty that every business decision you make is based on validated information? If not, then you are operating somewhat blind. The Canvas offers a (partial) cure to this blindness.
Canvases are Cheap and quick to Implement. With a moderately firm grasp of how the canvas works, any organization can address their "Lack of Canvas" weakness. With a canvas on the wall, walk your management team through each of the facets to document what you know about each one. It may take an hour. Do you contract out certain services? That contract & company would be a Key Partner. Do you broker that service to your customer? That would be a Key Activity. Do you have a guaranteed income source that supplements your costs? That would be a Key Resource. Are you using or exploring a new billing model? That would be in the Revenue Stream.
Where you know you know the answer with certainty, use a Green stickie. Where you have some doubt, us a yellow one. When you've covered the canvas, then look at the yellow stickies. If there are none (or all the stickies are green), then you have an optimally architected business.
Which are the top 2-3 assumptions that if false would cause serious problems? Agree which one you want to validate first, and the plan that would validate. Then, over the next week execute that plan. If the assumption is proved, replace it with a green one. Otherwise, replace it with a red one. Since this assumption was your greatest risk, now you have an issue to remediate. Rinse. Wash. Repeat.
-- Ben In tenebris solus sto
About Ben Wilson
Ben Wilson, the brains behind the Postal Marines sci-fi saga, is a history buff with a soft spot for human nature and religion. After serving in the US Army, he's now stuck in the exciting world of IT project management, where he feeds off his customers' frustrations. Ben shares his Northern Virginia home with his wife, three kids, and two vicious attack cats. Don't worry, he didn't sell his oldest to the Core (although he may have considered it). His eldest has flown the nest and started a family of his own.
