So while you may have a few ideas knocking around in your head most days, how many of those great ideas actually come to fruition? I'm sure some great data scientist could enlighten us but let's go with a SWAG of 1/50 meaning that for every 50 great ideas, only one moves into a concept. How could such smart people, such as yourselves, generate so many ideas that rarely see the light of day? Great ideas are usually the outcome of an unstructured brainstorm, workshop or inspiration but the lack of structure limits our ability to take ideas to the next level.
Step 1: The Business Model Canvas
Wikipedia defines the BMC as "..a strategic management and lean startup template for developing new or documenting existing business models. It is a visual chart with elements describing a firm's or product's value proposition, infrastructure, customers, and finances." The Business Model Canvas (aka BMC), created by some pretty smart folks, is not a novel idea however it does give just enough structure for product managers or entrepreneurs to take their ideas and prove their worthiness at a high level. Key inputs to be considered, in order are:
- Customer segment
- Value proposition (to that customer segment)
- Channel that the value prop is delivered through
- Customer relationships that align with each customer segment
- Revenue streams that result from a successful value prop
- Key resources that are required to deliver the value prop
- Key activities aligned to deliver the value prop
- Key partnerships, outsourced or internal resources
- Cost structure that will be need to be considered as part of your P&L
Capturing these data points will assist with early product pitches and complete canvases can then be circulated to key product stakeholders like finance, operations, development and marketing for buy-in and subsequent deeper dives (i.e., full financial business case). The good thing about the BMC is that you can futz with it all day long and create variations that address specific details like customer segment revenue streams that are different by channel. I recommend creating a canvas for these unique scenarios since there may be different contracts, billing and customer service protocols required.
Strategyzer has some great tools at Strategyzer | Business Model Canvas but you can make your own canvas using tools such as a white board, sticky notes, or in our case, a form fillable PDF. Don't get hung up on the 'template' but do make sure that the 9 components of the BMC are addressed so your idea can move from just a glimmer of an idea to a fully realized product ready to go to market.
Next, Step 1a: The Value Prop...