Imagine you are preparing for a sailing race. You own a good boat, capable of enduring the fastest wind gusts, and indeed you have the destination in mind. One might believe you have all the essentials to reach shore safely - think again. Without a GPS, how will you make sure that you are still on route?
You go to buy a GPS only to run into other sailors. You stand back, observe, and finally decide to distinguish yourself by purchasing an innovative GPS featuring route’s redefinition based on weather changes. Thereby increasing your winning chances.
The same logic applies to start-ups. A capital, a business idea (good boat) and a vision (destination) are critical to success. Nevertheless, you still need a business model (GPS) to launch and grow your business correctly especially in difficult situations. In other terms, to win the start-up competition you need a lean business model (innovative GPS): “Business Model Canvas” (BMC).
The canvas is formed by organisational blocks. Each of these nine components contains a series of scenarios you need to test.
- Customers: What is my market? Who are my target clients? What are their needs and characteristics?
- Value proposition: Why will someone buy my product/service? What are the benefits and advantages offered by my product/service?
- Channels: Will I open my own store, sell via retailers or opt for e-commerce?
- Customer relationship: What marketing strategies will I adopt to publicize my brand, retain my clients and increase my sales?
- Revenues: What is my pricing strategy? How do I price my product/service? What is my potential turnover?
- Key resources: Which human and material resources should I dispose of for my business to fulfil its mission?
- Key activities: Which stages will I spend most of my time on to ensure business prosperity?
- Key partnerships: Who are my key suppliers and partners?
- Costs: What are my break-even point, fixed charges and variable costs?
This is the fact: your start-up’s vision might not be compatible with the market and needs adjustments. Get out of the office. Find the answers you are looking for while exchanging with your potential customers, suppliers and partners. Test your different scenarios. Make the right decisions. And whenever your market evolves simply follow the canvas to refocus your business.
Now that you are in on the secret of how companies like Nespresso, Skype, Lego and Apple became leaders of their markets; grab a pen and sketch your way to success.