How do you use the business model canvas for a startup MVP?

The business model canvas is nine boxes, and for a first version most of them are hypotheses. The two that matter most are revenue streams and cost structure, and the question that shapes both is what the team owns versus what it borrows from partners. A model where the value is created by a partner's asset is a model the partner can end.

What are the most important parts of a business model for an early-stage company?

The business model canvas is nine boxes, and for a first version most of them are hypotheses. The two that matter most are revenue streams and cost structure, and the question that shapes both is what the team owns versus what it borrows from partners. A model where the value is created by a partner's asset is a model the partner can end.

What is the difference between owning and borrowing in a business model?

The business model canvas is nine boxes, and for a first version most of them are hypotheses. The two that matter most are revenue streams and cost structure, and the question that shapes both is what the team owns versus what it borrows from partners. A model where the value is created by a partner's asset is a model the partner can end.

The model · Business Design · Product Thinking

§The hypotheses: we can name where money enters, where it leaves, and what we own that makes the difference between the two durable, and each of those is a claim with a number rather than a box with a label.

§Part III is the lens startups postpone. It begins with the canvas everyone has seen and few have filled honestly.

§ 7.1Nine boxes, two first#

§Osterwalder's canvas has nine boxes: customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partners, cost structure. For a first version, the first four are inherited from Part I, channels are out of scope for this whitepaper, and the ones that decide are the last five. Two of those decide it first.

§Revenue streams. Who pays, for what, how, how often. Not the total; the mechanism. Per seat, per transaction, per outcome, per tier, a fee from a partner, a share of something. Each mechanism is a with a number, and chapter 9 turns them into a sheet.

§Cost structure. What it costs to build, what it costs to run per user, what it costs to serve, what it costs to acquire. In the AI era the second of these is the one that has changed: a that calls a model per interaction has a cost that scales with use, and the canvas must say so.

§Ash Maurya's Canvas replaces two of Osterwalder's boxes with problem and unfair advantage, and for a first version that substitution is often the more honest one, because the unfair advantage box forces the next question.

§ 7.2Own or borrow#

§For each key resource, one word: own or borrow. The customer data: own. The reservation system: borrow. The payment rails: borrow. The relationship with the guest: own, if the product is where she builds her profile; borrow, if the profile lives in a partner's system.

§Hamilton Helmer's framing is the useful one for a small team: an advantage is durable only if it has a barrier that stops others from copying it, and a barrier built on a borrowed asset belongs to whoever owns the asset. A model in which the value is created by a partner's data, platform or rails is a model the partner can end, reprice or absorb, and several AI-era companies have learned this from the platforms they built on.

§ 7.3Key activities and the operation#

§The activities box is where Part II reappears. If the model requires the operation to capture data, that is a key activity performed by people who were not in the room, at a cost that chapter 5 asked for in numbers. If the model requires a support function, that is an activity with a cost per user. The canvas that lists "deliver great service" as a key activity has listed a hope. The canvas that lists "server reads profile card before seating, one glance, shown in pilot" has listed something that can be true or false.

§ 7.4The canvas as a set of claims#

§Every box holds two or three claims, and every claim has a number or the word "assumption." Filled that way, the canvas is not a poster; it is the source for chapter 12's list. Filled the other way, with labels and confidence, it is a slide, and the team will discover which boxes were hopes in the quarter after launch.

§ 7.5What has to be true#

§Added to the running list: each revenue stream as a mechanism with a hypothesized number. Each cost line, with the per-user costs separated from the fixed ones. Each key resource marked own or borrow, and for each borrowed one, what happens to the model if the partner withdraws. Each key activity performed by someone outside the team, with the chapter 5 number that says they can.

7. The model