... where visionaries, game changers, and challengers discuss business models
For those who may not yet have seen the blog post, Alex has created a new tool as an addition to the canvas - the customer value canvas. It can be found through the link at the bottom of the Hub home page, or here
One of the most difficult challenges an innovation practitioner faces is reconciling all the different theoretical approaches, and variations on leading approaches. Often we are faced with incompatible or contradictory approaches and are left to reconcile the differences or adapt the approaches to make them compatible.
A great example of how approaches can be integrated is the collaboration between Alex Osterwalder and Steve Blank. The addition of the business model canvas to the customer development model (CDM) provided a strong tool to describe what Steve Blank instinctively knew was a key component of the model. The addition of the CDM to the business model canvas provided a process for the business model innovation in a start-up, entrepreneurial environment, to complement the existing business model innovation process in BMG. Steve Blank further extended the integration by the addition of the Lean/Agile product development as a method in "The Start-up Stack".
This new canvas tool takes integration in a different direction, vertical, by creating a 'plug-in' that helps one work out the details of the overall business canvas. Think of it as taking a portion of the canvas (value prop and customer segments) and blowing them up to focus on the details of that relationship. It is also is of great assistance in helping the client to focus on that part of the canvas and to identify and comprehend the relationship.
For some time now I have been experimenting with a couple of plug-ins to help clients work out the details of their value proposition in the business model. I have used the Value Mapping tool from the Board of Innovation, and the Whiteboard value map that is described in Cooper & Valskovitz's Entrepreneur's Guide to Customer Development. I have also experimented with some of the approaches in Ash Maurya's Running Lean; in particular, identifying three key problems and three solutions.
One of the best approaches I have plugged into the customer-value proposition analysis is the 'job-to-be-done' approach of Clayton Christensen and Mark Johnson. I use it in a table that has three columns. The first identifies the potential customers. The second column identifies the job each of these has to get done with which we can help, The third column identifies the need that customer has to get the job done. The 'need' becomes the value proposition in the model. By looking at column one we can identify key groupings of customers with similar jobs to form segments. Column three allows us to group based on value proposition and develop bundles of products and services.
I like this new tool by Alex and will be interested to see what the Hub community thinks of it and how it can evolve.
I like it Kenneth.
I find the VPC visually daunting (too much going on). Placing it "inside" the traditional canvas gives it context and makes it easier for me.
Also like you adapted measurements.
I might re-draw it a little. One concern that I have already is that I've placed the VPC within that upper portion of the drawing in a way that might suggest that there is only one VP or CS but overall, I think integrating the drawings might help.
The adapted measurements are straight out of Triple Bottom Line (Planet, People, Profit) which is how I'm now using the larger BMC with clients.
Think it is better as it retains the original canvas layout.
Something has been lost in translation of the ideas I stated in my original post.
The integration to which I referred is the inter-connectivity of ideas and tools. How one set of ideas or different tools support and extend each other to develop a more comprehensive understanding. That should not be confuse with the desire to create a single comprehensive view that combines these tools and views.
Making an approach or tool more complex in the interest of being more 'comprehensive', does not necessarily make it better. Often it makes it more difficult to work with and the value of the approach, i.e. its simplicity, can be compromised. One can even lose the underlying structure that is core to the conceptual model. Frequently I see this happening when people reconfigure the canvas based on their logic.
I believe it is better to keep these tools separate and use them to extend the analysis by separating out and studying, as in the case of the value-proposition canvas, or by adding in dimensions, as in the customer development model.
I didn't personally take on the idea of integrating the two models from the original post. I came up with that idea on my own and it's something that I do often to test how models or ideas might relate to one another. In this case, I think it is important to try and do that for a few reasons:
a) The VPC has elements that relate directly to the BMC;
b) Entrepreneurs who may be considering how/when to launch or who may be using a lean launch approach may want to try and connect these models in the context of such thinking; and,
c) There is definitely a conceptual framework in the VPC that is implied but not really explored in considering the same major elements within the BMC.
It is for this last reason that I often asked myself "How does the BMC relate to the 'interests' between a VP and CS?" The VPC model answers that question by showing how the interests align by digging deeper or perhaps "earlier" in the process.
I'm not sure that it is better to use the tools separately. I think that it's best to explore how they can be used to better serve the entrepreneur in the discovering of an emerging business. For that to happen, integrative thinking may actually be more important than anything. How they might best fit together remains another question. My own personal conclusion, so far, is that the VPC precedes the BMC in terms of "launch viability" and can be best though of as a multiple layer above or before the BMC's completion.
As for adding triple bottom line to the measurement perspective (which Alex originally calls the financial perspective), I think that's completely reasonable. After all, emerging sustainable (or even not-for-profit enterprises) need to measure their success and where else would such long-term metrics go? In my view, they belong along the "bottom" of the model.
It's a little bit limiting, in my view, to suggest otherwise. Now, I personally think that the original BMC configuration (with TBL added) makes the most sense... But that's just my own opinion. Trying out other positions, patterns, or representations can help others arrive at their own conclusions, of course, but suggesting that people NOT do that doesn't sound right to me. After all, if people didn't try things differently how would innovation happen?
Dear Sir, i am really impressed by the work of BDM and the alliance i see with Steve blank. My question is the work of BDM and Steve can be applied to old traditional business model that needs to innovate and create. What is the added value of this approach to the marketing approach method on which you go through marketing research first then introduce your product or service