... where visionaries, game changers, and challengers discuss business models
"Simplicity is the ultimate sophistication." Leonardo da Vinci
Of all strategies for business growth, the approach of creating game-changing business model innovation is widely acclaimed as the most profitable and defensible way of growing a business. Extraordinarily successful companies such as Google, Apple, Groupon, Uber, and Airbnb introduced game-changing business models in their industries. From my perspective, there is a Business Model Revolution underway in the global economy. However, the art and science of designing game-changing business models are little understood. In short, Business Model Design is a nascent field where intuition prevails over systematic tools. No wonder, so many startups fail and go bankrupt.
Currently, the most common tool for visualizing or prototyping a business model is Alex Osterwalder's Business Model Canvas. However, with its 9 building blocks, the Business Model Canvas is complex to learn as well as slow and difficult to apply especially for startups. There are just "too many
blocks balls in the air" when using the Business Model Canvas especially when finding Problem-Solution Fit for a startup. It's easy to suffer from information overload when using and managing information in the 9 building blocks of the Business Model Canvas; it would be cognitively advantageous to "chunk" or aggregate the 9 building blocks into a few number of categories. Also, the logic behind the visual design of the Business Model Canvas is not obvious or intuitively aligned with the simple or folksy definition of a business model: "A business model describes how a business sustainably makes money." This non-obvious logic has resulted in many modifications to the original Business Model Canvas and "non-business model diagrams" of little utility.
Based on Rod King's Business Model Strip, the 4Q-Business Model Strip introduces a simpler, faster, and scalable tool for visualizing and prototyping business models. The "4Q" refers to the 4 questions on which the Business Model Strip is based: Why? Who? What? How? The 4 Questions (4Q) can be presented on a high level tessellation known as a "4Q" or "4 Box"-Canvas.
It's important to note that the visual structure ("skeleton") of the 4Q-Canvas, which consists of 4 tessellated boxes, is inspired by the visual structure of Alex Osterwalder's Business Model Canvas which has 9 tessellated boxes. Consequently, there is a direct and strong relationship between the visual structure of the 4Q-Canvas and that of the Business Model Canvas. Unlike in the paradigm of the Business Model Canvas, the 4Q-Canvas has a fractal structure in that every or any box (theme) on the planet can be visually summarized and explored as a narrative or story on the 4Q-Canvas. (The 4 questions are just two questions short of the classic journalist questions or Rudyard Kipling's "Six Honest Serving Men:" Why? Who? What? How? Where? When?)
Readers, who are familiar with Simon Sinek's tool of the Golden Circle, would recognize that the 4Q-Canvas contains a "Golden Triangle" formed by the triangulated questions of Why-What-How. The simplicity and versatility of the 4Q-Canvas also facilitate the recognition of complementary tools that can be used in a business modeling project. For instance, Rita McGrath's approach of Reverse Income Statement (Discovery-Driven Planning) can be applied using the 4Q-Canvas especially in more advanced stages of a business modeling project. The simplicity of the 4Q-Canvas is illustrated by the fact that even kindergartners can use the 4Q-Canvas as a simple visual template or graphic organizer to better organize stories and other narratives.
In the diagram below, the minimum Business Model Strip is superimposed on the above 4Q-canvas. Unlike in the Business Model Canvas, a Business Model Strip directly shows how a business makes money: a product is offered to a customer who, if satisfied with the offer, makes a payment to the business or product's supplier. At this level, other properties such as core competence, channels, and cost structure of the Business Model Strip are ignored in the name of simplicity. At any time during a business model project, "missing" business model attributes can be considered or made visible by zooming into the appropriate section of a Business Model Strip.
With only 4 blocks or nodes on the canvas, a business model can be rapidly documented, prototyped while testing its hypotheses or creating different configurations. As an example, the business model for Apple's Classic iPod is shown below on a 4Q-Business Model Strip.
Here's another perspective of the 4Q-Business Model Strip for Apple's Classic iPod. The diagram below zooms out to the business model while showing details including trade-off of its business model node.
Note that one can zoom into any node of a Business Model Strip in order to examine the "trade-off," "value," "happiness," or decision-making criteria for that node. For instance, we can explore the value of the "Customer Node" as well as "Product Node" by zooming into each as follows:
In conclusion, I'd like to say that this posting is deliberately short. My purpose is to briefly illustrate the simplicity, speed, and scalability of the 4Q-Business Model Strip as a business modeling tool. The 4Q-Business Model Strip can be used with or without a 4Q or 4 Box-Canvas. In any case, I hope that I managed to achieve my objective. Nevertheless, should you have comments and questions, do let us know at your earliest convenience.
Have a great day!
P.S.: The full slide deck, which is based on the above presentation, can be obtained here: