What is a Business Model Canvas and its value?
When it comes to finding out if a digital product or service has the potential to be successful, it can be helpful to use ‘The Business Model Canvas’ to determine if there’s a place for it in the market.
There’s no shortage of digital ideas nowadays but it doesn’t always seem to be the biggest idea that succeeds. Some great ideas fall flat while others that might not have appeared as promising manage to succeed.
While there are many reasons for this, one of the biggest is a lack of awareness of how a digital product or service fits into the existing market. While a good idea might seem like it would be useful to all, when it comes time for its launch, it might not see any demand. In contrast, a niche product with a seemingly small target market has every chance to outperform its more mainstream counterpart.
The Business Model Canvas is a useful tool when looking at creating a digital product or services as it emphasises its strengths and concerns. Use it when you have an idea and you get an overview of how desirable, feasible and viable it is.
The 3 key metrics of a Business Model Canvas
Desirability is one of the key elements to look at because it boils down to the simple matter of demand. If there’s no demand for your product, there’s no point developing it. The overall desirability of a product can be further broken down into three sections:
- Value proposition
- Customer segments channels of communication
- Customer relationships.
The value proposition looks at where the product solves a problem and provides value above its competitors, the customer segments looks at the different groups that would be best served by the product, the channels look at what lines of communication are being provided for consumers and the customer relationship looks at how the product deals with its consumers.
The feasibility of the product is the next area looking at whether it be created or distributed. The key areas to look at when dealing with feasibility are the key resources, activities and partnerships.
Without the key resources, the operation can fall flat. An inability to provide the product or execute the plan in a costly manner prevents a viable business from taking shape. The key activities comprise of all the elements that a company must focus on to realise their goal and the key partnerships consist of those in the supply chain and and other partners help excel the operation.
After the desirability and feasibility have been considered and it looks acceptable to proceed, viability becomes the next area we need to look at. Viability analysis shows if the company can bring in appropriate revenue streams and can make the product as cost effective as possible.
If you’re reading this piece, chances are you’re wondering what makes doing up a Business Model Canvas worthwhile. While a lot of the things that have been mentioned might seem intuitive, solidifying the points by writing them down and thinking about them together can be highly beneficial for a number of reasons.
Firstly, the approach allows you to maximise your focus and think more deeply about how you can deliver the best product for your target audience and it helps you think about how to reach them more effectively.
The concise nature of the model means that it is easy to share and communicate your thoughts and visions to others within the company or to other parties. This can be highly beneficial when looking for investors, bringing in new partners or making sure that your team know what they’re aiming for and it can even help them gain a better insight into how to make the end digital product better.
Focusing on your customers needs will never be a bad idea and in this structured manner of doing so, you can gain insights you might not have otherwise.
This tried and tested methodology also helps to ensure you avoid wasting resources and time by going in the wrong direction or even worse, failing due to an oversight that could have otherwise been caught.
At Zoosh we specialise in helping you realise your digital product vision and turning it into reality. Contact our Product Studio to see how we can help.