Is the Business Model Canvas a Template, Method, or Mindset?
The business model canvas, and its sister format the lean canvas, has become cemented in the lexica of entrepreneurship, strategy, and innovation. While its form is familiar to many, its use is quite varied. The relative experience and skill with which it is wielded is a significant factor, but just as important is how we would even describe what it is.
Is it a template? Is it a method? Is it a mindset? Or all 3?
It certainly can be called a template, but its value as a template is relatively limited. If you successfully complete filling out a BMC without new insight, questions, or actions, then it was indeed only a template for you. The value of course is quite limited, but it can prove an effective way to tell your story to an investor or investment committee, a boss about your strategy, a partner, or to your team to explain the business model. In this way, the BMC is nothing more than a tidy way to tell the story while not losing a comprehensive view. For many strategy thinkers with a lot of experience cultivating their own way of thinking through strategic challenges, this is often how the BMC appears.
As a method, it can be more powerful, although what form that method takes depends greatly on your need. Are you working on a pivot, developing a case for a new product line, or starting a brand new business?
The template remains the same, but the method can be shaped around your needs. I think as a method, there are 3 primary places where it serves best.
First, it provides a structured way for a facilitator to engage a team in crafting a new or modified business model. Every facilitated process must anchor around some framework, and the BMC can be a framework around which the facilitator structures their discussions and interventions.
Second, it can provide a means for collaboration. Imagine two founders, both with insights, but who have different styles of thinking and processing. Having a common canvas on which to “paint” allows a common language and lens on which to collaborate, diminishing the importance of either’s preferred thinking style and using the BMC as a bridge between them.
Third, it can help either an individual or a group see their blind spots. I was working with a group of business consultants, and as a method to teach them BMC, we had a founder present his business. 95% of what he presented was on the right-hand side of the canvas. He had lots of thinking of what the market was, who the customers were, and what the value proposition was, but very little about how to achieve it (the left-hand side). This was his blind spot. When I was an angel investor, I would notice during many founder pitches that most of the questions would focus on what the founder presented, but failed to dig in on what the founder did not present. These questions, in the blind spot, were often where the troubles were found.
Finally, how is the business model canvas a mindset?
In my lean transformation work, I am often advocating the belief that behaviors are more powerful than tools, whether in the practice of standardizing a process or solving a problem. The same comes with the business model canvas.
How do you think about your business model?
Do you think about your business model as being built on assumptions that must be tested and are subject to change?
Do you think about your business as the interdependency of many moving pieces?
Do you think about your business as the intersection between what the customers wants, what you’re able to deliver, and the feasibility of doing so profitably?
These beliefs drive your behaviors, and whether or not your pull out your business model canvas regularly is often secondary to how you behave when presented with challenges or changes.
In many ways, the business model canvas is simultaneously a template, a method, and a mindset. The more you use it, both in study and practice, the more you will see it as all three.
If you are interested in learning more about how to utilize the business model canvas in your role or organization, Professor Josh Ehrig and I are running an executive education workshop with Lehigh University on May 17th. Check out the details and register here.