Posting by Stewart Christ, MBA, Principal at BMC Associates
The Business Model Canvas was introduced by Alexander Osterwalder as a mechanism to create and document a business model in a concise and visual manner and provide a unique way to enhance collaboration. The Canvas’ visual depiction of a business model incorporates key elements that include external partners, activities, value propositions, customer relationship and segments, resources, channels, cost structure, and revenue streams. This template has been embraced by a number of business thought leaders and is very popular throughout the global lean start-up community.
By using a visual tool that can accept written input from multiple contributors, often displayed on a wall or other vertical surface, contributors can input and edit the model quickly, and the resulting physical and visual interaction can create a powerful team building environment. The defined regions within the canvas template force the collaborators to complete each of the key strategic business elements. In addition, the limited writing space in each region of the canvas imposes a healthy discipline of brevity and precision. Intended to be an organic document, it can represent the evolving nature of a business. In a start-up scenario, the evolution of the canvas represents growing organizational maturity that should incorporate feedback from product and market testing, minimum viable product initiatives, and other learning.
Many of the prescribed strategies for creating, building, or selling a business have been written around the assumption of a sole proprietor or a single founder. However, most businesses incorporate multiple owners or are the result of multiple co-founders. As a matter of fact, the data and research indicate that most businesses have multiple owners and are the result of the efforts of multiple co-founders. Further, the data and research are clear that businesses that are the product of multiple owners and co-founders substantially outperform those involving a single owner or founder. Therefore, it makes sense to consider these strategies within the context of multiple owners and founders.
I am continually amazed when working with business owners that they have not attended to the fundamentals of their ownership with the same attention they pay to execution details. The partnership fundamentals start with their personal styles, values, and relative strengths and weaknesses. Equally important is the definition of roles, responsibilities, contributions, expected rewards, accountability, and governance. Just as a canvas can document a business model, co-owners and co-founders can document their relationship in an organized fashion. These partnership agreements will vary over time, like their canvas, and should be revisited in the same manner.
When co-owners differ as to their future vision – and their plans for achieving that vision – this can be expressed as operating from different canvasses. An effective method to determine the degree of misalignment is to have them individually sketch out their own canvas and then come together for a detailed comparison. By negotiating the merger of their differing canvas versions, alignment can be achieved.
While the Business Model Canvas is a very powerful mechanism for creating and evolving a business model, I emphasize that equal attention must be paid to the fundamentals of the business partnership. Partnership and canvas alignment is crucial to success at the beginning of the enterprise, as well as during the growth and expansion phases. Do the work necessary in both areas to maximize your chance of reaching your vision and achieving your goals.