"Whenever a company is created, explicitly or implicitly, it employs a particular business model that describes the design or architecture to create value ...
... The essence of a business model is the definition of how the company adds value to customers and seduce them to pay for that value, converting part of those payments into profits.
Thus reflects the assumption of the company's leaders on what customers want, how they want, and how the company can be organized to best meet those needs ... "(Teece, D.J -2010 / Berkeley - University of California)
I have said in some of my previous posts that much of the innovation has come from new business models. So I found it could be interesting create a specific post on how to build business models.
One of the tools used to design and create business models from prototypes is the Canvas.
The tool has become popular in recent times, and SEBRAE (Serviço Brasileiro de Apoio à Pequena e Média Empresa) itself launched an app for use of this tool by those who wish to endeavor. (https://www.sebraecanvas.com/#/).
Canvas not only allows for the design of several new business models, as it allows also to improve of existing ones.
The idea is quite simple and is also an intuitive tool. The tool's creator, Alexander Osterwalder, began to design the "Business Model Canvas" when he was writing his doctoral thesis in management information systems at HEC (The Faculty of Business and Economics of the University of Lausanne) in Switzerland.
The model consists of a panel divided into nine separate units. It begins by choosing the market segment and following the development of the value proposition for these clients. Following the form of relationship with the customer in determining the channels by which the value proposition will be delivered to that market segment and finally how the business will be monetized, i.e., what are the sources of revenue.
The right side of the panel has a market perspective and to address interaction with customers. Keeping in mind the value proposition in the center, the left side of panel is more focused on the business itself and defining what would be the key activities and resources, as well as strategic partners and the cost structure.
Thus, in a single panel it´s possible to have a macro vision of the business model. This overview allows adjustments and changes without major trauma since is still in the prototype phase. The best way to build up the business model Canvas is forming a working team and many Post-its, so that every idea can be discussed, questioned and / or validated by the other team members.
Although as I said, the tool is extremely intuitive, two blocks from the nine deserve more attention. The first is the block that refers to the market segment and that will require a thorough knowledge of the characteristics of customers and their business.
That means first knowing what these customers need to deliver, what's your purpose? What are the tangible and intangible goals, tasks and their specific problems? What are your needs that must be met?
Another key point is to understand the challenges of these customers, what are the barriers they face to have their problems solved and what are their biggest issues of any nature. What makes them feel bad, have poor performance, lost nights of sleep ... in short, what are the "pain" of these customers?
At the same time, imagine what the solutions that our value proposition would make our customers happy? Which could exceed their expectations, such as higher productivity, lower costs, better margins, lower risks ... What would make the business and the lives of our customers easier? What these customers are looking for and how close that our value proposition is? In short, what these customers would see as gains?
Building our value proposition, a perfect "fit" between each of these ideas blocks is key. That is, we need to create a value proposition for our customers, who first meet their most urgent needs, and secondly to remove your pain and that it provides them a perceivable and measurable gain.
The value proposition includes, therefore, the actual goods and services, which should provide in addition to the relief of customer pain (pain relievers), noticeable and measurable gains that enchant for being above their expectations (gain creators).
These two blocks are the "heart" of the Canvas and are the ones that will require more time and care from the team responsible for design a new business model.
There are numerous videos available on the internet about building the business model canvas, below the link for some: