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You may have heard about the book from Alex Osterwalder called “Business Model Generation” (http://www.businessmodelgeneration.com) which addresses a generation of visionary entrepreneurs who like to go beyond traditional business models and create new future-oriented companies running cool, innovative and modern businesses.

But hold on a moment! As this is about innovating something new, there should be a natural relationship to Design Thinking.

A few weeks ago, I’ve checked this out and realized that one of the key tools of Alex Osterwalder, the so-called “Business Model Canvas”, also works perfectly in the context of design challenges which are at a lower scale than completely new business models for new companies. The Business Model Canvas represents a business model or business case with nine simple building blocks, including customer segments, channels, and relationships; value proposition, key activities, resources and partners; cost structure and revenue streams (http://www.businessmodelgeneration.com/canvas). The canvas therefore combines the economic viability of a solution with its desirability and feasibility.

The challenge where I have used the canvas was about innovating a new learning solution. At the beginning of the design cycle, the Canvas helped to describe the actual learning solution (e.g. traditional class room trainings) as a kind of granular business model and put it into the context of actual trends.

This in combination with further research results made it easy to identify and synthesize, per each Canvas building block, key pain points users have with the current solution. For example, the canvas section “business model channel” is an obvious pain point for certain user types when delivering classrooms trainings which require physical presence.

This exercise was the perfect starting point for moving forward into ideation. The AS-IS model identified user pain points and within the context of actual trends made the brainstorming sparkling like breakwater.

But this is not the end. After creating a low-fi prototype for the prioritized new learning solution, we have complemented the prototyped solution with the to-be business model to underpin its viability, desirability and feasibility.

To sum it up, the Business Model Canvas can be used in various ways during the Design Thinking modes and I’m sure that there are many more ways to use it.

Recently, I was thinking about using the Canvas in the context of discovering Big Data opportunities for a company or business section. How do you feel about that? I would be happy to learn more about your experiences with the Canvas.

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4 Comments

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  1. Maarten Vries

    Hi Thomas – if you like the Business Model Canvas, then you’ll probably also like the Value Proposition Canvas, which is like an “add-on” to help you specify 2 of the 9 BMC boxes in more detail: Customer Segments (CS) and, of course, Value Proposition (VP). Osterwalder is writing a new book about this and, if you sign up to be notified about this book (whether you’re interested or not ;o), you get access to a great little video that explains how the Value Proposition Canvas works. To be honest, I haven’t really applied it myself, but I’m definitely going to. Here is the link: http://www.businessmodelgeneration.com/book/newbook

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  2. Tobias Hildenbrand

    Hi Thomas,

    thanks for bringing the topic up and sharing your experience and thoughts.

    We applyed both the BM Canvas and the Value Proposition Canvas in different development projects, also in co-innovation setups with several customers.

    Please check out the related content on our (yet internal) SAP Method Store.

    Kind regards

    Tobias.

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  3. Fred Verheul

    Hi Thomas,

    Nice blog post, and thanks for bringing the Business Model Generation book to my attention. I just robbed myself of some €20,- and ordered it.

    I attended a designthinking coaching workshop last week, where the Business Model Canvas was discussed and I was the lucky one who had to present it (my choice, don’t worry 🙂 ). Which effectively forced me to think it through more thoroughly, and so I also came up with the use of the BMC for as-is as well as to-be analysis, at the start of the Understand-phase, or within the Ideation-phase, for a new company or a new product or even for an improvement of an existing product as you describe. There really are no limits 🙂 .

    So now I can’t wait to learn more and to put it into practice (proof of the pudding…).

    Thanks for sharing your experiences!

    Cheers, Fred

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