Let’s get straight to the point: it is fair to say that the book Business Model Generation, by Alex Osterwalder and Yves Pigneur, is the best reference for the development of absolutely any business model. In the end of the day, it is a simple and intuitive script to be completed before starting any new venture.
But what is the difference between this and other books of the genre?
Generally, when we want to explain something, we put our thoughts into words. Lots and lots of words. If we are talking about a start-up business, with the purpose of detailing everything that concerns the market, performance, and operation of the enterprise, we will certainly fill in pages and pages with text.
However, that can become very tiresome both for those who develop the texts and explanations, and – maybe even more – for those who need to understand everything that has been shattered in words later on.
The great advantage of Business Model Generation is being able to place your entire business on a single canvas. That’s exactly what you understood: one layout, one canvas, one company. With everything, you need to think about before you actually get it off the ground.
A simple and affordable tool
Business Model Generation is actually a powerful tool, presented through a simple visual approach. However, when we speak of simple, don’t confuse with shallow or simplistic.
The process is well-designed. Complex. Complete. But the book format is engaging, dynamic, and straightforward. In other words, it is capable of making business models fun, understandable and accessible to even the most inexperienced of entrepreneurs.
Most business books are quite exaggerated, with too many pages to illustrate a single topic. But Business Model Generation is about using one business model canvas to develop or even improve an organization.
A business model in just nine steps
Business Model Generation develops its entire business model through a canvas composed of nine building blocks:
- Customer Segments
- Value Proposition
- Distribution Channels
- Customer Relationship
- Revenue Streams
- Key Resources
- Key Activities
- Key Partners
- Cost Structure
Although most entrepreneurs may already be familiar with these blocks from other books and sources, Business Model Generation provides a systematic methodology for creating this business model, including useful exercises and methods from external sources.
The design of the business model on the canvas involves 5 phases:
- Team mobilization: gather your staff and explain the need for a new business model.
- Guidance and motivation of the team: make everyone involved seek information and learn everything they need about customers, technology, and the market.
- Prototyping and experimentation: ask the team to develop several prototypes and test them, in order to choose the best model.
- Implementation: effectively implement the selected business model.
- Management: manage and monitor the business model and the work environment, in order to implement any necessary adjustments and adaptations.
A method for any type of business
It is important to note that Business Model Generation is not intended exclusively for companies with commercial and profitable purposes. On the contrary, every organization is a business, in some way, even if it is a club or doesn’t aim at capital earnings.
Besides, the book is not a collection of separate and random ideas put together. Instead, the process of learning and applying the business model is pretty organized and logical.
In addition, Business Model Generation gathers examples from all types of business, as well as relevant and current concepts, allowing you to acquire new knowledge while structuring old ones in a very efficient way. This is because it is a book centered on methodology and not on prior knowledge.
Business Model Generation, therefore, helps to transform the thinking, generation, and management of a business model into an accessible and practical system, based on a simple and effective visual approach associated with real and relevant examples from companies that have used this methodology successfully.
In short, Alexander Osterwalder and Yves Pigneur have created a method and book that make it possible for anyone to start a company – or any other type of enterprise – with just a blank canvas!