Fully Leveraging the Business Model Canvas
I’d say more than half of the entrepreneurs that I sit down with at some point in the conversations leverage the business model canvas to summarize their idea. This is especially pervasive at the early stages. Its wonderful as it ends up providing a really quick & mutually understood framework to summarize their idea. However, I think many people end up under utilizing it. In the video below starting at 34:10, Alexander Osterwalder (creator of the canvas) talks about the four levels of sophistication when leveraging the business model canvas.
The four levels quickly are (but watch the video starting at 34:10 for the full context):
- Checklist: show each element of a business model all at once
- Story: build a full canvas while using the elements to tell your story
- Patterns: take advantage of well understood business models such as two sided markets, freemium or the long tail
- Iterations: show how the canvas and more importantly your business has evolved as you validated or invalidate hypothesis when your plans interact with the market
Again, to reiterate when contrasting the canvas with a long written business plan that no one reads, any of these levels of sophistication are valuable. However, when entrepreneurs “fully” utilize the paradigm by highlighting patterns and showing me the iterations in their thinking it’s an even more powerful tool.
Unfortunately, less then 10% of the entrepreneurs pitching me do this. To be fair, they may just be jumping to the current iteration of their thinking, but they still miss the chance to talk about their business model patterns.
As you’re working on your pitch, just a recommendation to fully take advantage of the business model canvas.