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Canvas: a new business model.

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Por: Fábio Lúcio Meira     10526 visualizações     Tempo leitura: 7 min

THE PROBLEM:

Consider the following situation:

"You wake up excited because you have a new idea. Get up and start creating your product. You dedicated all four months and your new software is ready. Enters validation phase and it is approved. But how to place it in the market? Two or three months more consolidating a business plan, it's time to open your business and then you discover that your business plan, although very well written, did not include all segments of customers you would have. The proposed structure is with several flaws. Hands on remaking the business plan and reorganizing the company."

Often, business plans do not achieve their goals because the entrepreneur still cannot answer accurately, among many others, the following questions:

a) Which would be the segments of the business customer?
b) How would the business reache to the customers?
c) How would the customers arrive to the business?
d) Who would be the partners of the business?
e) How would be the cash flow?

SOLUTION?

An extremely flexible tool which allows the entrepreneur to mature his ideas is the Canvas applied to the business model.

A Business Model describes the logic of how an organization creates, delivers and captures value for its customer segments. The Model Canvas by Alexander Osterwalder was developed in a process of co-creation in his doctoral thesis. Using the concepts of Design Thinking, Alexander created a simple tool, synthesized in a single framework, which is able to generate proposals for business models that allow the entrepreneur to mature his purpose to reach a model ideal considered for his needs.

In Figure 1, we can see how simple the proposal of Alexander is.

Canvas Model
Figure 1 – Canvas Model

The Model Canvas provides a simple vision, but not simplistic, of the business model that we intend to adopt in a company. A major advantage of applying the Canvas is the ability to "play" with possible models (business prototypes). A prototype can be quickly developed and refined. Thus, the entrepreneur can get a more realistic result obtaining a model closest to his business need.

In Figure 2 - Canvas Sectors, we can see that it is possible to divide the Model Canvas in two blocks. The green block that encompasses all the points inherent in customer segments and blue block that handles the development of the business process.

Canvas Sectors
Figure 2 - Canvas Sectors

In evaluating the “building blocks”, we have: * At this time, when reading a product understand the product and / or service.

1) Customer Segments
The Model Canvas gives special attention to the customer. Five out of nine sections are dedicated especially to the customer. Focus on the block name: "Customer segments." Identify customer groups you want to reach. You may have heard: "Who sells to everyone, does not sell to anyone"? Well, the same thought should be applied when developing your Model Canvas. It is no use having a great idea if you cannot look at your business from the clients point of view. Remember, it is the customer who is responsible for your revenue stream.

2) Value proposition
Have you identified your target customers? So now identify which are the values that you deliver to them. Understand that by "value" does not mean the product itself, but rather the difference that you offer to customers, which "benefit" do you offer with your product. It is essential that your Value proposition is greater than that offered by your competitors. For all the benefits that you can identify, try to summarize them in one sentence.

3) Channels
The communication channels indicate the means by which your business will supply your product and does it your get attention of your customers, as well as the way in which your product is delivered to your customers. Thus, we can define the channels as a means communication, sales and distribution of the product, defining part of the company interface with customers. Through them, these customers take notice of the product and evaluate them, buy them, etc..

4) Customer Relationship
The block of Customer Relationship defines the strategies to be adopted to gain and maintain customer loyalty with your product. Maintaining this fidelity is perhaps one of the most difficult tasks of a Startup. Many startups are realizing the importance of this relationship already at birth. Good strategies to avoid losing customers by issues such as: unnecessary discounts, bad service, etc.

5) Revenue Streams
The revenue streams block defines how your business will be paid from the delivery of your product value. There are several ways for a business to establish its revenue stream. It is for the entrepreneur to identify the forms most frequently used by Customer Segments your business.

6) Key Resources
The Key resources block defines which are the fundamental assets in the business to get to work on your product. In a software development company, we can consider the Key resources as computers, the licenses used for development, servers, software records, the knowledge of development, etc.

7) Key Activities
Key activities are activities that make up the process of product development (value) offered to clients in business. It is essential that the entrepreneur has full control over the key activities so that the product obtained resulting provides a standard quality considered a benefit to the customer. For example. In a company that provides tools for SaaS, we can have the key activities: the development and product maintenance, server maintenance, etc.

8) Key Partnerships
Key partnerships indicate who the key partners are to achieve the key activities. In general, we can indicate as key partners: suppliers of raw materials and outsourced services, distributors, vendors, etc. Any type of task or essential raw material provided by another company which ensures the functioning of the Business Model should be identified in this block.

9) Cost Structure
The cost structure defines the main costs (or investments) applied in business for all products to be generated. We can define in this costs structure: equipment, manpower, outsourcing, software, marketing, distribution, etc. It is important to emphasize that these costs can come from blocks:

  • Key resources
  • Key Activities
  • Key Partnerships
  • Channels
  • Customer Relationship

Figure 3 - Example of a Model Canvas, I present a prototype of a company that develops solutions for access control of vehicles in companies, parking lots, shopping malls, etc., using various RFID technologies. Note that filling the Model Canvas should be simple. The more concise and objective your text is, the better results you will get.

Example of a Canvas Model
Figure 3 - Example of a Canvas Model – adapted of book: O Analista de Modelos de Negócios

AM I READY NOW?

A business model is not ready in its first prototyping. Refinements are needed in order to obtain a stable model and perhaps "ideal" for your business. In addition, several prototipation may be made to achieve the expected model. The use of Model Canvas is increasingly and spreading mainly in Startups and in Lean Startups. In the United States, many companies rely mainly on Canvas, abandoning the conventional Business Plan. Although this may seem to be a senseless idea, many of these startups are getting great results, especially considering the flexibility that Canvas offers, if rapid changes as required in the business model, which is not possible in the conventional business plan. To learn more about other aspects that the Canvas model has proved to be an excellent tool, read more in the books below.

Bibliography

- Business Model Generation. Alexander Osterwalder & Yves Pigneur. Editora John Wiley & Sons
- O Analista de Modelos de Negócios. Luz Geração Empreendedora.


Data da publicação: 06/05/2014

  • Fábio Lúcio Meira      
    Agência Inova Paula Souza
    University professor for 18 years in information technology. Consultant in the area of Software Engineering. Innovation agent and coordinator of the Núcleo de Inovação Tecnológica da Fatec Lins. Project Coordinator of "Entrepreneur of the Future"

    .
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