The “Business Model Generation” methodology is an essential aid to all business owners and consultants, who want to document, communicate and brainstorm businesses models in a succinct manner.
The book “Business Model Generation” by Alexander Osterwalder & Yvess Pigneur provides great examples of how to document business models, along with methods to brainstorm innovative changes in business models for existing businesses.
If you like visual aids, then you are going to love the techniques described in this must have book. What struck me, biased as I am toward visual tools, is how their visual models encapsulate the linkage and dependency on the key elements of the business in one page.
The base technique describes uses a common base canvas to capture the core building blocks of your business model: Key Partners (FP), Key Activities (KA), Key Resources (KR), Value Proposition (VP), Customer Relationships (CR), Channels (CH), Customer Segments (CS), Cost Structures (CS) and Revenue Streams (RS).
A simple example of how this would work for apple’s I-pod is shown below:
Once the base or existing model is created the book then helps you explore the opportunities to explore other alternative business models. Some example business models described in the book include:
- Unbundling Business Models
- The long tail
- Multi sided platforms
- FREE as business model
- Open Business Models
Key techniques described include brainstorming with the use of post-it notes against the base canvas, as well as my old chest nut of customer value propositions and what’s in it for customers.
Once you have your model developed with post it notes, you can really go to town and prepare a visual form of your business with pictures.
BTW: Do not be put off by the 72 page book preview available on their web site http://www.businessmodelgeneration.com/. As a result of my pre-read of the preview I nearly didn’t buy the book. So glad I did purchase, based on a recommendation (thanks Matt McKendry). My order on amazon was delayed waiting for a reprint, so hopefully they now have plenty in stock.
This book is now going on my must read list for entrepreneurs, order your own copy now
Post Ed note: I now run workshops which include this methdology – www.growthmanagement.co.nz/training
After using this model for some time I have come up with my own variant read more>
[...] the difference: inventors have ideas – entrepreneurs have validated value propositions and business models that [...]
Rob, This is a well written, quick view of Osterwalder’s business modeling world. You are right about the book. It’s invaluable. You inspired me. I have to get blogging again. Big corporations make billions with Ontology and business models. Getting this across to regular business people could change our world. Keep blogs coming on BM.
- Arthur
[...] you are new to the “business model canvas” , here is a link to a book review and summary that I published a while ago on the original book. It’s great to see this book appearing on book [...]
[...] You can look at an example of the business canvas for Apple’s iPod here. [...]
here is the video description of business model canvas