Since 2006 I regularly use various tools for modeling the economic activities of the companies with whom I work.
Most people seriously involved in business strategy avoid till the last moment to embark on business plans. Especially with young companies, where projections at 5 years are all more blurry and absurd than the others. Working on the business model, on the other hand, offers a synthetic vision of the business project, easily declined in scenarios at 3, 6 and 18 months.
It remains to find a method of modeling the business model.
I think a lot of the readers of this blog now know the work of the collective led by Alexander Osterwalder who, a few years ago, made a clear synthesis of half a dozen different tools and kept it the essential. To illustrate it quickly, Google’s business model could be presented in this way (do not dwell on the relevance of content that is very superficial):
Not bad at all, but a little confused.
I was always embarrassed in particular by the “prevert list” aspect of this format: all the relevant information is present, we know which part of the business model is responsible for what, but the inherent logic does not appear any more Than that .
At the agency we present rather the model this way:
Just as simple (this is always on an A4 sheet), but this time we have the structure of the business model that appears clearly. This is especially important for multi-edged models such as those combining free B2C:
And paying B2B:
In addition to the structure that is now organized from value creation to customer segments, we also make two adjustments:
First, we distinguish the added value of the product . The product is not the most important in a business model . It plays a pivotal role of course because it is the support of the transaction, but it is not it that is sold in reality. That is its added value. The model we use reinforces this distinction and allows us to work on the strategic vision of the company. The answer to the famous question ‘ what is the problem you are dealing with ‘, or more prosaically ‘you serve what’:
From there it is possible to go down to a marketing vision in two forms: the marketing of innovation first of all …
… Then the famous “marketing mix” which has a very operational focus:
The monetization is a separate subject, clearly highlighted. Here again, the professionals of the accompaniment and the fundraising, know how much this complex subject must be treated with acuity and finesse.
I could develop many other points concerning the use of this tool (and I do it of course through many training courses), but not to be too long emphasize what becomes the financial part. It is also treated clearly and distinguishes fixed and variable costs:
It may be read alternately by budget line:
These simple adaptations of the “business model canvas” give with little extra effort a more structured and more productive vision in my opinion. It even becomes easy to write the business plan itself, once the business model has been tested and validated in the startup.