Brett Shellhammer, Executive-In-Residence at VeloCity, gave a great overview of The Business Model Canvas at the Accelerator Centre last night. He explained the Business Model Canvas as a very visual metaphor for the business model that is great for brainstorming. It’s easy to read, use, share and update, even more so when using Lean LaunchLab, an online tool that allows you to easily create and share your Business Model Canvas with investors and advisors. VeloCity students will be using Lean LaunchLab throughout the term while the product is in beta.
Brett thoroughly explained The Business Model Canvas. It includes 9 sections (Key Partners, Key Activities, Key Resources, Cost Structure, Customer Relationships, Customers, Channels, Revenue, and Value Proposition) that allow you to define the important aspects of your business. He especially emphasized Value Proposition, the section in which product and operations as well as customer selling and servicing converge.
Brett explained Value Proposition with The Silly Cow, an exercise used in the book Business Model Generation. The goal of this exercise is to sketch out a business model using a cow and its basic characteristics (cows eat, produce milk, moo). Using those characteristics, Brett lead a brainstorming session where VeloCity students came up with a business model based on a cow. This comparison helps clearly define Value Proposition – what problem you’re solving, what product you’re creating to solve that problem, who will buy it and for what price. It also includes whether this product is completely new or just a better, faster, cheaper, innovation (which is much more common).
With the Business Model Canvas and Lean LaunchLab, you can alter the specifics of your company with ease – they allow you to have a flexible business model. Brett explained the importance of this: the Business Model Canvas lays out everything about your company so that you can recognize its flaws and then fix them. This outline allows your business to be more self-aware so that you can adapt your business model as soon as you see a problem.
We look forward to seeing how you use the Business Model Canvas to improve your startup!