When you are creating a business model the right level of detail is critical. Too much and it’s difficult to know exactly what it is that you are doing. (Fig1) Too little and your business model is often bland and indistinguishable from competitors (Fig 2). What is the right level of detail in a business model?
When you first sit down and sketch out a business model, normally for an existing company, it is better to err on the side of too much. Sit down and throw everything at the piece of paper in front of you. Put it all down. Then sort out what is important.
A lot of the time the level of detail will vary. Like having a map with different scales in different areas. This is not necessarily bad, but it often means that you haven’t thought that much about the areas with the lower level of detail.
Other parts of the canvas will seem bland and generic, filling space, whereas some have a lot of impact.
Impact is good. Bland is not.
Types of Detail in The BMC
There are two schools of thought. The first is functional. Your canvas should map what there is. If you read it it should describe how the business model works, or should works. All the detail should be there. (Fig 4)
The second school is essential. What are the essential components of the business model that make it what it is, that deliver impact and make it unique. (fig 3)
Both work, the essential is more useful at the design stage. The functional at the implementation stage.
When I am designing I will generally focus on the essence. That is what makes the company or the business model unique. Typically there are three to five essential features in a business model that make it really work. This is the stuff that comes out when pitching, what you think about, what makes a difference.
Around this, there are 9 – 12 features that play a support role. They fill in some of the detail, bring out the strength of the model, but are hiding or confusing the issue.
This works because the business model canvas is a high-level map. Too much data on it and you get overwhelmed and the map is useless. Too little and you can’t use it to find your way.
Action Points:
- Add the 3-5 points that you always mention when describing your business model
- Add 9 – 12 additional points that bring context to the first set.
- Generally no more than 3 points per segment
- If you look at points or segments and they are identical to your competitors ask if they need to be included, or redesign that part of the business model.
- Ignore all the rules if it feels right
If you want some examples of how I draw business models look at Amazon, Google or Apple. You may also want to have a look at some business model strategies as well as general business model how to.
