We have a great tool for visualization of a business model: the canvas. There is a hype on visual thinking and business model design. But can the tools deliver?
In the last years, I have seen many uses of the business model canvas to real cases. Some showed astonishing results, others were disappointing. Why? Any tool is only as good as the user. A fool with a tool is still a fool. But also: A genius without the right tool might be a fool. So let’s see, what makes the difference.
Visual Thinking = Thinking with Visual aid
Visual Thinking is often mistaken as nice visualization. A bad idea does not become better by visualization. Visual Thinking is great since you think in pictures. Visualization can help to make your thinking better, to see more options and see the interdependencies among all components. But you still have to think!
There was a reason why god gave us two brain hemispheres: Visual Thinking is the combination of analytical and creative thinking. So do the thinking.
Be precise in your thinking
Due to the limited space, people tend to be pretty imprecise when filling out the canvas. They fill the canvas as if it is just a form, not the master plan for a venture or for the future of your firm. That happens particularly often in large corporations where the people are so stuck in their old thinking.
The more precise the better, since that shows that you have precise thinking. That does not mean you have to know everything at the beginning of your thinking process. Mark clearly areas where you have to do more thinking instead of just filling out just something. If you have not enough space on the canvas then use the white board to draw the component. That is often the case for the production or value steps in your value architecture.
Be precise in your language
People love buzzwords particularly in the value proposition. They write about best-in-class, social something, customer-centric. All empty words (See post on the horror of Newspeak). Start with precisely describing who your customers are. Do not write business customers but identify some business customers that you can check tomorrow your value proposition with.
I force my participants to write down a list of ten names of customers they can call tomorrow to check if the value proposition is appealing or not. That leads to the next and most important point.
Customer Insights as starting point
A good and innovative business model starts with a customer insight, of something what is unsolved or badly solved for the customer. That is what I call a job to be done for your customers. But entrepreneurs love their products and they try desperately to find a need for their offer. They spent hours arguing why people should buy their offer during business model sessions instead of talking to real potential customers. It is important to convince your customers not others during the workshop.
The Art of business model design starts with a deep understanding of customers. So leave your conference room and test your assumptions about the value proposition when you do the business model design. Observe potential customers, ask them about the basic needs, not about today’s solutions, be curious, be adventurous.
The Art of Business Model Design
- It’s all about the customer
- Be specific what you say
- Keep it simple, but not simplistic
- Be self-explanatory
- Focus on the relevant points where you make a difference
- Do not reinvent everything