A break down of the Business Canvas
A Business canvas allows you to view segments of your model alongside each other. These segments are:
- Customer Segments
- Value Proposition
- Customer Relationships
- Revenue Streams
- Key Partners
- Key Activities
- Key Resources
- Cost Structure
There isn’t a right order to filling this out, but the order we propose does make it easier to navigate the Business Canvas.
1. Customer Segments
The first section to fill out is the Customer segments. This is essentially your target market and audience. Who are the people using your product or service? If you’ve built up any personas, then this segment will be relatively easy to fill out.
Once you’ve got this section filled, you’ll know who you’re selling to.
2. Value Proposition
Your value propositions are the values that you’re delivering to your customers. In other words, what are you doing to satisfy them or what problem are you solving for them.
Once you’ve got this section filled you can start looking into Channels and Customer Relationships.
You know who you’re marketing to and what you’re giving them, but how are you going to get it to them? Channels are about delivery. If you were, for example, creating a music platform then your channels could be an app and the web.
4. Customer Relationships
This is the relationship that the customer is expected to form with the company and/or the product. For example, is your product a collector’s item? If the answer is yes, you would want the “collector’s instinct” as part of your customer relationship – the need to have them all.
5. Revenue Stream
From understanding the product, you can now start to see where your revenue streams might be coming from. Remember to include all revenue streams especially if your product has two types of customers (e.g. local businesses and app users)
6. Key Partners
You won’t be able to build your project by yourself. The next thing to identify are your key partners. These could be manufacturers, delivery services etc..
7. Key Activities
Your Key Activities will include what is happening internally as well as what your key partners are providing for you. If we stick to the app example, your Key Activities would include IT maintenance and developers for the app, software mechanics etc..
8. Key Resources
To complement your Key Activities, you’ll have to highlight your Key Resources. In the app example, this would mean you’d need a very good IT infrastructure.
9. Cost Structure
Now that you’ve highlighted your product and what it needs, you will start to have an understanding of the costs associated with it. Costs will include your Key Activities and Resources.
The important thing to remember with a Business Canvas is that it is a space to test a hypothesis. Once you’ve written down how you think your business model could work, you need to test it time and again, and then refine or develop it. It should never be a static plan.
When you are out testing your ideas, remember to use the Business Canvas as a reference point. It is, essentially, the precursor to your business model and plan.
Lastly, but most importantly, be specific. When you fill out your Business Canvas don’t write generic statements. The more detailed you are, the more effective your Business Canvas will be.
Business Canvas example
Holgel Nils Pohl does a great case study on creating a Business Canvas for PokémonGo. What is particularly interesting is that PokémonGo has two main customer segments: the user and the local business. This creates two separate revenue streams. Have a look at the images below to see Holgel’s take on PokémonGo.