Working on your business model canvas? Stop.
The best way to fill out the Business Model Canvas isn’t one box at a time.
If you’re not familiar with it, the BMC is a 9-box grid that documents everything about how your business creates, delivers, and captures value for a customer.
Every founder does one at some point.
And most founders take each of the nine boxes in turn:
- List all the customers you’re serving;
- List all the channels you’re using;
- List all the resource you need;
The problem is that there’s no context, and no way to see how one box relates to other. More than that, it prevents us from documenting clearly what, exactly, our business hypothesis is. It’s like a puzzle that’s still in the box: all the pieces are there, but they don’t form a picture yet.
In today’s issue, I’m going to show you how to fill out the BMC in a way that provokes insight.
It’s not one box at a time, but one story at a time.
Start with a customer, right?
Don’t waste your life building something no one wants.
So start all the way at the right side of the canvas with a single customer segment, and plop in all the details you know — or the hypotheses that you have.
A single customer segment.
Our goal isn’t to complete the customer segments box — it’s to begin a story that we can follow through the rest of the canvas. And that makes the next step pretty clear:
Move from box to box until the story is complete.
You have a particular customer with a particular problem — great!
But that’s just the start of the story:
- For that customer…
- You’ll create value (value proposition);
- Put it in front of them (channels);
- And create a particular experience (relationships).
- For this, you’ll charge some money somehow (revenue model).
- To do this, you’ll do things (activities);
- And need some stuff (resources);
- And maybe some outside help (partnerships).
- And all of this takes money (cost structure).
Or, if you’re the visual type:
Just by telling the story of how you’re creating value for one customer segment, you’ve put relevant, related hypotheses in all nine boxes — and it’s properly contextualized.
But you’re not done!
Add more stories, one at a time.
Most business models can’t be told in one story. You should be nervous if yours can.
Stories won’t all look the same:
- Multiple customer segments? Add a new story from scratch.
- Multiple value props for the same customer? How does it impact the rest of the story?
- Multiple revenue streams? Add it to the box and follow it through.
Let’s say you have a software-as-a-service subscription model with a freemium tier. How does the introduction of the freemium tier change the story?
- Does it impact channel strategy (e.g. to push self-signup)?
- Does it change relationships (e.g. because free users get only community support)?
- How does supporting free users change your cost structure?
The process repeats itself: just grab a new colour, and add more stories until the entire business model is documented, and all facts and hypotheses are shown — along with their proper context.
But never start in the middle of a story.
If your freemium tier is designed to bring in a broader (read: different) customer segment, start with the customer. If the reason for changing the cost structure is because of an hypothesis about the freemium conversion rate, don’t start with the cost structure box.
Start as early possible with any story.
Probably with the customer.
Whenever you're ready, there are 3 ways I can help you.
If you’re still in the idea-to-seed stage, trying to get early traction, I’d recommend starting with some coaching:
→ Book a 1:1 coaching session to tackle one key challenge, from prototype to pitch.
→ Apply to my Traction Coaching program, and we’ll find traction together.
- If you already have early traction, I’d recommend running a Traction Sprint to find the traction you need to get from Seed to Series A.
- Of course, you can always ask me a question for my weekly office hours livestream.