The Business Model Canvas (BMC) is a popular tool for designing and testing business ideas. It helps you map out the key elements of your value proposition, customer segments, channels, revenue streams, cost structure, and more. But how do you compare different BMC examples and learn from them? Here are some tips to help you analyze and benchmark different business models using the BMC.
One way to compare BMC examples is to look for common patterns that emerge across different industries, markets, or contexts. For example, you might notice that some businesses use a subscription model, while others rely on advertising or freemium. Or you might see that some businesses focus on a niche customer segment, while others target a mass market. By identifying the patterns, you can understand the logic and rationale behind different business models and how they create and deliver value.
Extend your BMC analysis beyond the boundaries of a single business and delve into the broader ecosystem. Explore how various organizations, technologies, and market dynamics interact within a specific industry or ecosystem.
Comparing BMCs means spotting shared strategies across sectors. For instance, many tech firms opt for a subscription approach, while local cafes might thrive on loyalty programs. Spotting these trends isn't just about recognition; it's about understanding the 'why' behind business choices and adapting best practices for your venture.
Another way to compare BMC examples is to evaluate how well they fit with their environment and stakeholders. For example, you might ask yourself how aligned the value proposition is with the customer needs and wants, how effective the channels are in reaching and retaining the customers, how sustainable the revenue streams are in relation to the cost structure, and how compatible the business model is with the social and environmental impact. By evaluating the fit, you can assess the strengths and weaknesses of different business models and how they cope with uncertainty and change.
Consider the adaptability of BMCs in response to dynamic market conditions. Examine how well each business model accommodates changes, whether they are disruptive innovations, shifts in customer preferences, or external shocks like economic crises.
"Evaluate the fit" means checking if a business model suits its environment and stakeholders. For instance, does a café's offerings match what local customers want? Or can a new tech service sustain profits despite market changes? By checking this fit, you gauge how ready a business is to face challenges and adapt.
A third way to compare BMC examples is to explore the possible alternatives and variations that could improve or challenge the existing business models. For example, you might brainstorm how you could modify or combine different elements of the BMC to create new or better value propositions, customer segments, channels, revenue streams, or cost structures. Or you might imagine how different scenarios or trends could affect or disrupt the current business models and how they could adapt or pivot. By exploring the alternatives, you can generate new ideas and insights for your own business model innovation.
When assessing alternatives in the BMC, ask "why" a particular choice was made. For instance, if a company prioritized one revenue stream over another, what drove that decision? Was it market demand, competitor actions, or resource availability? Understanding the rationale behind choices not only offers deeper insights but may also reveal overlooked opportunities or vulnerabilities in your own model. For example, if a business overlooked a potential channel due to resource constraints, you might spot a chance to capitalize on it. It is important to always delve into the reasons, not just the choices.
A fourth way to compare BMC examples is to learn from the feedback and results that they generate in the real world. For example, you might look for evidence or indicators of how successful or profitable different business models are, how satisfied or loyal their customers are, how scalable or flexible their operations are, and how impactful or responsible their actions are. By learning from the feedback, you can validate or invalidate your assumptions and hypotheses about different business models and how they perform and evolve.
Embrace the power of iterative observation when comparing BMCs. Rather than relying solely on static snapshots, continuously monitor the performance and evolution of various business models in real-world scenarios.
Feedback is your compass in the business landscape. When comparing BMCs, note real-world results: Which model boasts higher customer satisfaction? Which scales efficiently? For instance, if one model consistently receives praise for adaptability, it's worth a closer look. Let feedback guide you.
A fifth way to compare BMC examples is to compare the stories and narratives that they tell and communicate. For example, you might pay attention to how different businesses articulate and present their value proposition, customer segments, channels, revenue streams, cost structure, and more to their audiences and stakeholders. You might also notice how different businesses use storytelling techniques such as metaphors, analogies, emotions, or humor to convey their message and vision. By comparing the stories, you can understand the culture and identity of different businesses and how they influence and persuade others.
Comparing stories in BMCs shows how businesses talk to their audience. A tech startup might focus on innovation, while an older company stresses reliability. The way they tell their story can give clues about their core values and audience approach.
I learned that traditional business models (usually contained in 3-ring binders) simply change too fast at the onset due to all the pivots. So much easier to show just the high-level overview using a Business Model Canvas. Then, if needed, provide more detailed supplemental information to an investor. Also recommend saving and keeping old versions of your canvas. It can be fun to go back and look at the evolution of your business ideas and pivots. They can help you tell the story of how your business ideas evolved!