Four core questions you need to answer for any great business

November 28th, 2011 by Patrick Stähler

Thanks to the business model canvas people are enthusiastic to build new business models and find business model innovations, but often they get lost in technocratic details. They just see building blocks but they forget the overal logic every great business needs.

Actually, you as an entrepreneur have to answer just one core question: Why should your firm exist on this planet? You need a Daseinseinsberechtigung (right to exist) for your firm. This is a very philosophical question. To be more operational, you can break down the Daseins question into four core questions. But still the answers will not come with a pure analytical process but with creativity and lot’s of empathy for your customers and their jobs they want to have solved. 

The technocratic approach is useless for finding love (source: http://xkcd.com/55/)

The four core questions on your business model canvas

  1. Why should customers be excited to do business with you? That is the value proposition. You could almost go as far as asking: Why should customers love to do business with you?
  2. How do you create the excitement of your customers in a productive way? That is the value architecture or operating model. Here you describe how you fulfill your value proposition.
  3. How do you earn money? That is your revenue model or the profit formula and here you should be able to explain why you as the owner should be excited about the business.
  4. What are your values you live up to in your team and with your customers and partners? That is the human side of the business and of utmost important, since it is the most difficult part to copy. I call it the culture and values of a business.

For these questions, you need compelling answers and the nine or elven building blocks are very helpful in answering the questions but do not get lost in details but look at the broader picture and see the interdependencies.  If you can answer the questions you have a great strategy that is customer-oriented, profitable and sustainable.

The bad part for any mediocre business is that you cannot answer the questions. Please all mediocre business, why don’t you try harder and work on “why should your customers be exicted about you?” instead of optimizing a dull business.

9 Responses to “Four core questions you need to answer for any great business”

  1. Norris Krueger Says:

    Nice blog post, Patrick – summarizes far better than I could have!

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  6. ביטוח חיים Says:

    I like your approach this is a very interesting way to look at things..

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  8. Cesar Says:

    Great starting: I think ‘They believe they can, -just with the use of the BMC’ but it takes more than that.

    easy to understand your 4 questions.

    Congrats

  9. Patrick Stähler Says:

    Hi Cesar

    Using the Business model canvas is art. Just filling out the canvas leads you nowhere. That is the reason I wrote a kind of series on using the canvas:
    The First is about using it in general. It is called: Using the Canvas is Art:
    The Second is the most recent post on Leaving blancs blanc.

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