All our business model examples are visualized with this set of 10 building blocks. To give more insight in how this works, we give a brief overview of the different building blocks. Using a common, visual language enables you to easily communicate business models to different audiences, to learn from successful models in other industries, and to quickly generate new variations and business models of the future.
Once you grasp the building blocks below, check out our business model templates to design your own business model in seconds. Share the results in your organization and let us know what you think about this method.
Part 1: The players
A. The company
The first big entity is a company. In most models this will be the actor that offers the product. The company whose business model is designed, will be colored blue in differentiation with other players and stakeholders.
B. The consumer
The one that receives the product and gives something in return, is the consumer. In B2B models, the client is a company and will therefore be illustrated with the previous company icon. The general company-client relation is the same in both business systems.
Part 2: The flow from company to client
The first, most straightforward offer to clients is an actual product, ranging from basic commodities up to finished goods. A BMW car is one example, but today also digital products can be included.
A first way to upgrade your business model is to offer a service next to the product. BMW in this case will not only sell you a car, but will include maintenance and other services around the product. Of course, a lot of companies offer only services without product.
The two concepts of product and service are commonly applied throughout our economy. In the last years, several companies have moved a step further by offering an experience to customers. BMW does not sell a car with a service in this case, but a driving experience.
Today, the next upgrade to reputation can only be found in a few sectors. In these cases, ‘reputation’ selling can be described as the most essential brand experience. If you take the example of BMW, then you could say that some people don’t see their BMW as a driving experience but as the core values and reputation of the brand as such. Hereby, customers are able to shape their own identity with that of the company. Typically reputation will be placed in the top of Maslow’s hierarchy of needs, which makes this type of transaction extremely valuable to companies.
Part 3: The flow from client to company
The typical currency that clients pay with, is money – which is critical to company’s revenue models. This is in contrast to exchange. The building blocks make a differentiation between two types of money. This first icon represents the normal value of a good, including profit.
This second icon represents money as well, but less than the normal amount covering cost and profit of what is offered. Usually this transaction implies that other revenue streams are added to the traditional business model.
Attention has become an important new currency that clients can pay with. Free business models are often based upon this principle: clients get a product or service for free, but pay with their attention (to 3th party advertisers).
Active exposure is the next step in the evolution of currency. People are not only offering their own attention, but also that of their peers in their social environment. For some businesses the spreading of their ideas and brand values becomes more important than the immediate return in money. Of course, companies can’t just rely on active exposure, so their business model should include more players and other transactions. Many start-ups and even big web 2.0 companies are still struggling with this. There is a lot of exposure and value offered to clients, but there is no sustainable business model to capture that value in revenues and profit.
These 10 building blocks offer a new way of designing and innovating business models. Although reality is always more complex, the use of generic building blocks enables you to visually map models, compare different businesses, and identify underlying trends. When you have questions like ‘how to apply the eBay business model in my industry’ or ‘how to monetize my new product or service’, you can start very practically by analyzing successful new business models and transfer their general principles into your industry. Check out our business model templates to design your business concept in seconds!