Business Model Ideation

version
1.0
difficulty
time
45 minutes
people
3-5
license
CC BY-SA 4.0

The business model canvas can be a terrific ideation tool if you know how to use it as such. The tools on this page help you generate different options that you can either explore further or put on the shelf for later. The Business Model Canvas was created by Alexander Osterwalder, of Strategyzer.

Includes:

  • Regular size (A4) PDF

How To Use the Business Model Canvas for Ideation

There are many, many ways to use a Business Model Canvas. Often we see people employ it to better understand how their company creates, delivers, and captures value today. And, just as often it’s used to make an idea (for the future) more concrete. However, in between those two things is ideation. In other words, if you know where you are today and you’re looking for ways to create business models for tomorrow, you must ideate.

While there are plenty of really great methodologies and frameworks, like open brainstorming and the Creative Matrix, designed specifically for ideation, the Business Model Canvas can also be a really powerful tool to get the creative (ideation) juices flowing. The key to using the Business Model Canvas for ideation is that it’s best to start with your current business model. In other words, if you’re starting from zero, there are probably better methods for ideation.

Tool Overview

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  1. Customer Segments

    List the top three segments. Look for the segments that provide the most revenue.

  2. Value Proposition

    What are your products and services? What is the job you get done for your customer?

  3. Revenue Streams

    List your top three revenue streams. If you do things for free, add them here too.

  4. Channels

    How do you communicate with your customer? How do you deliver the value proposition?

  5. Customer Relationships

    How does this show up and how do you maintain the relationship?

  6. Key Activities

    What do you do every day to run your business model?

  7. Key Resources

    The people, knowledge, means, and money you need to run your business.

  8. Key Partners

    List the partners that you can’t do business without (not suppliers).

  9. Cost Structure

    List your top costs by looking at activities and resources.

Ideation Options

A Freshwatching

Need a jumpstart to start ideating based on your current business model? Why not use another company’s business model to start your creative engine. This is the purpose of the freshwatching ideation technique.

Freshwatching – a term invented in The Netherlands – is an ideation method by which you mix and match (or overlay) business models from other companies, often totally outside of your business or industry, with your own business model to see what you can come up with. For instance, say you’re current business model is one by which you sell accounting software to accountants through an extensive reseller channel to other business (i.e. B2B).

What might happen if you applied Uber’s business model to your own? How would it change things? How would you go about making money in a different way? How would your company change operationally?

It doesn’t matter if the company is an online business, an offline retailer, or even a massively popular one. With Freshwatching you’re simply looking at your company through the lens of another.

Freshwatching Checklist

  • Find 3-5 inspiring examples from other industries.
  • Together with your team, map the different examples each on a canvas.
  • For each example, dot-vote on the most interesting, unique aspects.
  • With your team, come up with 3 different versions of your own business model - picking one or two of the inspiring aspects for each version.
  • With your team, write down three pros and three cons for each new model. Why would it (never) work? What do you want to 'steal' for your own business model?

B Remove the Core

For this technique, you need to have filled your own business model. Start with that. Then, examine your own business model to find your company's 'special sauce' - that one thing you are absolutely certain defines how your company creates, delivers, or captures value. For instance, if you're running a software business, this might be the proprietary software you develop and sell. It could also be an irreplacable partner or a specific customer segment.

Now, as a thought experiment, remove the 'special sauce'. Remove the post-it notes from your model that are, today, the core of what your business is about. Chances are, this leaves your business model with a large gaping hole.

The innovation exercise is to fix the business model. But specifically not by sneaking your current special sauce back in! The point is to see what alternatives you can come up with.

TIP! This is an exercise that will usually cause some resistance by team members, as it removes the foundation under what you've been working on. Remind your team that it is a thought experiment, and that it's the goal to go through this 'what if?' scenario, not to challenge the actual vision of the project.

Remove the Core checklist

  • Map your current business model.
  • Vote with the team on the post-it that is absolutely crucial in the model.
  • Have them remove that post it.
  • Take 10-15 minutes to fix the canvas.
  • If possible, split the team in groups for more variation in approaches.

C Epicenters

The Business Model Canvas represents a dynamic system. There is interplay - cause and effect - between each and every building block; changing an element in one block will affect the others. This lends itself well to a technique called epicenter-based innovation.

With epicenter based innovation, you effectively have nine different building blocks, or potential epicenters, to play with in order to generate more ideas. One way this works is to clear out eight building blocks of your business model, leaving only one intact. What would you build if that one was kept the same, but all the others can be filled just as you want? For instance, what would you build if you could bring your company's key resources to bear on an entirely new business model?

Amazon did just that when it figured out that it could use its cloud infrastructure to generate additional revenue.

Other building blocks to focus on with this approach are customer segments (what else can you offer them?), your value proposition (what other customer segments can you address?), revenue streams (what other ways might you sell, lease, or rent your product/service), or even your channels (what else can you leverage with your current channels?).

TIP! Identify the unique strongpoints of your company and use these as epicenters. What are you exceptional at? What value have you created? What else can you do with that?

Epicenters Checklist

  • Map your current business model.
  • With your team, dot-vote on the strongest aspects of your business.
  • For each of these, take an empty Business Model Canvas and copy the relevant building block.
  • With this initial block as 'epicenter', work outward across the rest of the Business Model.
TIP! Try to make it as different as possible from the current state, if you fill in the same things you had before you're only doing a memory exercise.

D Follow Patterns

When you scan the landscape of existing business models, one thing you’ll notice is that there exist lots of business model patterns. Business model patterns are like formulas that can be applied to a business model to address a new customer need, or create a new revenue stream, etc. Some well-known examples of business model patterns are ones that use subscription revenue streams and/or have product platforms whereby one part of the product relies on the other to make money (think cheap handles, expensive blades, or cheap printers, expensive ink), often called bait-and-hook. There are tons of patterns that you can look at, we list the most well-known ones here.

Patterns

  • Bait and Hook / Razor and Blade
  • Freemium
  • Multisided Platform
  • Upsell
  • ...

E Ask Trigger Questions

Asking “what if?” is a powerful way to help a team come up with great ideas. The key to doing this with the BMC is to come up with a list of questions that challenges what you do today…perhaps for each box of your business model. If, for instance, you’re BMW and you sell your product today through dealers, what would happen if you sold it directly to customers through an online channel? What would that look like? You get the picture.

As the trigger questions are asked by a facilitator in 10-15 second intervals (which is important that they are), each person will simply write whatever comes to mind on a sticky note using a permanent marker. By the end of this exercise, there should be a pile of at least as many sticky notes as there are questions in front of each participant.

F Bringing it all together

The above ideation (and innovation) techniques are meant to give you concrete starting points for coming up with new ideas. The best way to use these is to do so with a group of people brought together to create novel, new options for your company or product.

The keys to making these, and other ideation/innovation techniques, work for you are the following:

When ideating always wear a yellow hat.

Not necessarily literally. Rather, using Edward De Bono’s “Six Thinking Hats” metaphor, everyone must be optimistic while ideating. Anything is possible at this moment…until it’s invalidated later on in the process.

Having a strong facilitator will make all the difference.

We all know how hard it is to work on your company while in your company. Bringing in someone from outside your company or even outside your group will help to keep the energy high and the yellow hats on.

Use the above techniques as prompts during a workshop.

While you might get interesting ideas from people by sending them the prompts ahead of time, more likely everyone will overthink everything. The best way to get people’s creative juices flowing is to have the moderator use these techniques as prompts during a live workshop.

Gamify the ideation process.

The facilitator should get people to eke out every last idea…to the very last one. A good way to do this is to create a contest out of the ideation process, whereby the person with the most unique ideas on sticky notes wins.

Cluster the ideas and apply them to Business Model Canvases.

Having a bunch of sticky notes with half-baked ideas is…well…not even worth the sticky notes the ideas were written on. To make ideas concrete, cluster all of the ideas into a few bigger categories then have teams of 3-5 people build new business models based on the clusters.


Additional Resources