Identifying and certainly explaining your business model is often the most challenging part of communicating your start-up ideas. The business model needs to give a clear answer on questions like: How will you make money? How does this compare to your cost base? Which partners and processes are driving your operations model? What is your pricing model? How can your business model evolve/mature over time? Questions that often lead to complex answers formatted in lengthy text documents that nobody tends to read. Keep it simple, keep it visual! Both for identifying and communicating your start-up business model. I have found the following 3 tools very helpful to visualize different business model ideas (note my bias to include the 3th tool in this list, having co-developed the 10 blocks).
Tool 1: Business Model Canvas (by Alex Osterwalder)
The Business Model Canvas is the most widely used business model design tool accross the globe. Alexander Osterwalder has developed a powerful method to capture all elements of a business model: propositions, partners, activities, resources, customer relationships, channels, customer segments, costs, and revenue streams. You can read all about the canvas on his Business Model Alchemist blog and in the Business Model Generation book. The business model canvas is used in workshop settings, to visualize company business models (Nespresso), to analyze broken industry models, and for more creative business model drawings. Print out the Business Model Canvas, wait for the upcoming iPad application, or try out the BMDesigner to visualize your business model ideas on the canvas.
Tool 2: Plan Cruncher – Crunch your business plan on 1 page
With Plan Cruncher you can create a one-page summary of your business plan in need for investment. The Plan Cruncher tool asks you some of the standard questions that a business plan must answer, and formats your answers in a set of icons. The icons are a visual representation of the key ideas in your business plan, such as ‘advertising revenue model’ or ‘in need for seed funding’. In contrast to the the other two tools, Plan Crunchers incorporates broader business plan elements in addition to the business model. By asking you a set of key questions that you have to answer, I found it very useful in forcing you to make a very simple summary of your start-up’s business plan. Check out these examples.
Tool 3: 10 Blocks To Design Your Business Model
This tool defines a common, visual language to present business models with 10 Building Blocks. We believe it is an intuitive tool to visualize transactions between actors in a business model, and to specifically explore different revenue models (please take into account my personal involvement having co-developed this tool). On the other hand, the Business Model Canvas provides a broader base to capture the HOW of a business model in terms of infrastructure, resources and key processes. The 10 blocks are used in creative business model workshops, to visualize business models of start-ups (Beebole), to win a Student Innovation Challenge, and to build a global database of revenue model examples. Print and cut out the 10 Building Blocks, download the presentation template, or try the online Business Model Drawing Tool (supported by Google Docs).
What’s your experience in communicating and visualizing a business model? Have you used one of these or other methods? What else would you like to see?