On Creating a through Business Model Canvas
It makes a lot of sense to save yourself the time and effort before you have fully qualified and idea. Interestingly many a “Lean Business” is criticized when seeking funding for not having a clear business model.
In reality there is a great deal declared in a full business plan – not the least of which are a set of financial projections that conform to good business practice – that when fully developed help to explain the reduction of risks a new venture presents. Before investing in a full business plan or strategic plan the process of developing a complete Business Model Canvas will rapidly get you to the questions and answers that will certify that the product or service you envision is worth the time to bring it to market.
The Business Model Generator is a invaluable guide. The headings of a Business Model Canvas are mostly intuitive, but often during analysis holes or assumptions are easy to find. Consider the questions I have extracted from the Business Model Generator book as you complete each section. These are also useful if you are evaluating another teams efforts.
The first set to examine your thinking about customer segments is on the right.
Evaluating Your Customer Segments
Start with identifying what type of Segments your customers fit into?
- Mass Market – VP, Dist Ch, and Customer Relationships all focus on one large group.
- Niche Market – specific specialized with tailored information to specific requirements
- Segmented – similar but different groups with varying needs and problems.
- Diversified – unrelated segments with different needs and problems
- Multi-sided platforms or markets – 2 or more interdependent segments interconnected dependencies in their needs and problem.
- What needs do each of your customer segments have?
- How are they solving that need today?
- What is your distinct offer for each customer segment?
- Can you connect the types of relationships required to reach each of them?
- Can you quantify the profitability of each customer segment?
- How willing is each segment to pay for different aspects of what you plan to offer?
Once you have this set you are ready to dive into exploring your Value Proposition.