Sunday afternoon and I was sitting in a cooling mountain stream having escaped from the tropical heat of Kuala Lumpur for a few hours.
Beep Beep
It’s a Whatsapp message from Leander. As it’s a sunday afternoon and we have no outstanding jobs for customers it must be a deep philosophical message. It was; it was a crisis of faith even
To think about; what customer problem do we solve with bm.guru?
To deep for a Sunday afternoon. So I lay back and continued to watch the dragonflies buzzing across the waters
Five O’clock this morning and my fingers were itching to write an answer.
What problems does a Business Model Canvas Solve?
There are two ways of looking at this. TL;DR Clarity and Possibility
The Case for Clarity
When you first have a business idea there are often lots of thoughts involved. From my experience you tend to see possibilities and react against constraints. The result is more like a tangled mess of string than the cat’s cradle that you really want to produce.
So it is hard for you to get a handle on your idea; it’s harder still to communicate it across to other people. So what you normally do is to try and talk the tangles out. Alternatively, if you are more of an engineering mindset you fill pages of notebooks with aborted process charts and squiggles. You get some clarity, but not enough.
What a business model canvas does is to cut through all the tangles and give you a clear view on how the business model for your idea works. So with 9 simple components it lets you tell the story of how your idea will become a functioning business in three simple paragraphs or an elevator pitch.
So for Business Model Guru
We will help our customers take the first step on the road to startup execution by bringing a lot of clarity to their business model. We will reach them through word of mouth and content marketing and keep everything automated. This allows us to keep our costs down and our key resource is the process that enables us to quickly produce high quality business models using a standard process. We sell completed business model canvases and consultancy and our costs are for Leander and Denis’s time + the web infrastructure required for the sales and billing process
So a quick and simple way of explaining what it is that we do and how we do it. That then enables lots of further questions to be targeted on each of the different aspects of the business. You can pick apart the distinction between word of mouth and content marketing. Implicit in that is that we probably have a direct sales channel and if we do – doesn’t that start to unbalance our const structure? It does. And that is entirely the point.
We a quick and simple approach like the business model canvas we can see a lot more clearly many of the inconsistencies that lie at the heart of an idea and work out how to resolve them.
This is often one of the problems that people have when they start going it alone. When my wife set up her steel company he aim was to be low cost and provide better customer service. Without thinking though she copied her previous employer’s staffing approach and that delivered customer service at a high price. It then took another 8 years to resolve that tension in the business model at the cost of tens of thousands of dollars. If she’d used the business model canvas (or indeed if it had been written a decade ago) that simple insight could have transformed her business.
So that’s the first problem that a business model canvas brings. It shines light onto what you are doing. When you do it yourself for the first time you get a lot of benefits. Even if you never think about buying a model from Business Model Guru it’s worth doing. Spending 5 minutes bring clarity/ an hour brings more and three is making your neurons squirm.
As you do more of them you start seeing patterns starting to emerge and it’s knowledge of those patterns that Leander and I use to help build much strong business models.
The Possibilities from Business Models
I did a philosophy degree, so, almost by definition, I’m not one of those people who gets shit done. I tend to analyse too much. Having an idea and leading off with massive imperfect action causes a different set of problems. Step back for a bit and think about things, under the shade of a Banyan tree is optimal, and see what you can change.
If you go to any startup conference you get a bunch of entrepreneurs who will be saying ‘I’m doing the X of Y’ where X is a recognisable business mode, try Uber, LinkedIn or the latest flavour of smoked Unicorn and Y is almost any type of business under the sun. In the lats few years lots of possibilities have been focused on scalability, network effects or asset-lite models.
Step back and play.
Say you want to open a competitor to Uber. Let’s say that we decide not to use the Uber business model (they have umpteen billion dollars and a brand and we don’t) and so we need to come up with something that is going to disrupt their model. Hmmmm. Off the cuff that leads to brain pain and not talking much because the problem is too hard. So we start making some hairy suggestions
Customer – everyone. We are their car. How would that work?
Asset heavy – we own cars. What the biggest cost in Uber’s model? Drivers! How do we get rid of the drivers? Can we get rid of cars and drivers? If we can then who do we need our partners to be? Google or Tesla? But they are quite likley to be competitors? So can we change something else so that we can be working with autonomous vehicles lite – so half way between mass transit with it’s fixed lines and true any point to any point (because with network analysis we can see that passenger demands aren’t really any point to any point but are much more like the traditional hub and spoke model of airlines)
And so it plays out. This where Business Model Guru really works well. 40+ years of industry experience, multiple sectors of knowledge, and a seriously inquisitive approach to finding new ways to reinvent the wheel. How can we take your idea and provide you with a number of options that are going to let you become truly disruptive rather than living in the copy cat world of doing the X of Y where competition, capital and execution failure leads to a fast death.
So, to give a concrete example. A US charity came to us. they had a great service with brilliant word of mouth recommendations but they were always struggling to raise enough money to cover their operational costs. A marketing consultant would say – I have just the fundraising campaign for you. We didn’t do that. Instead we looked at totally different ways for the charity to monetise their services and in doing so we ended up really focusing on the value that they provided.
So when you sit down and have a new business idea
- do a business model canvas to get strategy
- start playing with it and change all the components out to see what happens
The thought experiments, I am a philosopher after all, may not transform your business, but your insight from doing them, and thinking about them will. That is what the real value of a business model is, and that, Leander, is the problem that we solve
