Business Model Generation – an intuitive process

You’re a few years into running your business and one day you realise that you’re no longer a start-up. You’re standing at a crossroads trying to decide which direction to take your business in. So, what do you do?

You may have hit some of your original goals and others may have fallen by the wayside because they turned out to be irrelevant. Last year we reached this stage with Indigo Girl.

We knew the business direction we wanted to take. We knew that we wanted to scale up to the next level and yet there seemed to be an almost ephemeral resistance to doing that.

When you start to think about scaling or growing your business, all sorts of uncertainties start to creep into your mind. For us, this centred around worries about being able to keep up our levels of service, our attention to detail and whether we would still be able to offer the intensive and personalised service that our customers value in us.

We help small businesses with this every day, so we decided to reach out for a little guidance and coaching of our own. More about that experience and a review of it another time. But, it was because of Chris Brogan and his course that we stumbled across “Business Model Generation” by Alexander Osterwalder and Yves Pigneur.

Whilst you’re running a business, it evolves and grows in an organic way. 6 years down the line, ours was a different beast to the one that we’d envisioned during the planning of our start-up. This is normal and it happens as you adapt your business on the fly to meet the challenges of an ever-changing industry.

A short step into Chris Brogan’s course and we decided that it would be a worthwhile process to use the business model generation book as a framework for reviewing

  • where we are and where we want to be,
  • what our marketplace looked like and what it is today,
  • who our audience was and who they are now.

This would help us to see how these things had changed and what we’d need to do to push forwards. With that in mind, we took 3 days out of the business to get started on reworking our business model.

Using the Business Model Generation book

The book takes you through all the stages that you need to go through:

  • mobilisation (getting started),
  • understanding (getting to grips with what you have and need),
  • designing (putting everything you’ve discovered and learned into order so that you have one or a few models to consider),
  • implementation (bringing a model together to implement into your business),
  • managing (making sure that you have everything in place to monitor, maintain and tweak your new business model as needed).

It takes you by the hand and forces you to focus on all the important factors that lay the foundations of your business:

  • customer segments
  • value proposition
  • channels
  • customer relationships
  • revenue streams
  • key resources
  • key activities
  • key partnerships
  • cost structure

By the end of the process, you’ve distilled all this information down to one handy chart. This brings your business into sharp relief and makes it simpler to understand how you can take things forward.

Getting back into your audience’s minds

Another useful exercise was completing the customer empathy maps for each of our customer segments. We hadn’t re-evaluated our customer’s perspectives on the world since our last major pivot 4 years ago.

Your audience’s views and needs change over time, so it’s important to keep an eye on this to make sure that you keep resonating with them and no disconnects seep in. It’s one of the things that fall through the cracks, in small business, due to pressures of the daily work schedule. Once in four years is not enough, we now have it scheduled as part of our annual review with major shifts in between picked up by regular environmental scanning.

It took us three days, immersed in this process, to complete our business model canvas and the three main customer empathy maps.

This has led us on to revisit our service offerings, to tighten our focus and to map out our business strategies for the short, medium and longer-term. It’s made the entire business roadmapping process a lot less painful than usual.

A few suggestions to get you going

You could go through this process by yourself, but I’d suggest that you get the entire business involved. More heads are better than one throughout this process. If you’re a solopreneur, rope someone in to give you a hand and a different perspective – trust me you’ll get a lot more out of it that way.

There’s no need to worry if you’re new to the concept of business models, the book takes you through everything step by step and provides examples of how some well-known organisations might complete the tasks, which is an excellent way to help you make connections if you’re unsure of what you’re meant to be getting at during a stage.

We’ve kept the maps on the wall in my office to make sure that we keep it top of mind. It’s of use when deciding, which projects to take on because with this framework you can see whether a project is a good fit that moves you forward towards short, medium or longer-term goals.

The book is worth delving into whatever your business sector. It’s a fantastic resource for startups and existing businesses needing a bit of guidance for getting to the next level. This was the catalyst for changing our business name and branding.

Have you been through this process or a similar one and did you find it useful?

Comments

  1. Comment by Jaap den Dulk, 10:00 am Feb 21, 2013

    Jaap den Dulk

    Jaap den Dulk

    It is extremely useful. When revising your current business or when you start up a new one. It facilitates a very deep level of communication within the team. A clear language evolves that forces everyone involved to find common ground. The times I used it with my clients I found it a great help in overcoming soft cultural and hard financial discrepancies inside the company.

    In Holland @patrickvdpijl ( https://twitter.com/patrickvdpijl ) is a great supporter of Alex Osterwalders work.
    The book is illustrated by the great people of Jam, Visual Thinkers. (http://www.jam-site.nl)
    I owe a lot to these guys.

    Reply
      1. Comment by Kittie Walker, 10:00 am Feb 21, 2013

        Kittie Walker

        Kittie Walker

        Thanks, Jaap! Added to a list!

    1. Comment by Kittie Walker, 10:00 am Feb 21, 2013

      Kittie Walker

      Kittie Walker

      I’d never come across this methodology. It resonates well with me and the way that I like to work with clients. Common language can be an issue when you start on this type of work with a client and you’re right they lay it all down well. I usually do a lot of process making with them, but this is a much more visual interpretation.

      Those charts on the wall of my office, that you saw when we Skype’d, are the customer empathy maps. I find them useful everyday.

      The Jam website is beautiful! Checking out the list of visual blogs that they link to!

  2. Comment by Chris Montoya, 10:00 am Feb 21, 2013

    Chris Montoya

    Chris Montoya

    What a wonderful recommendation to do this with multiple people. I am approaching my work as a solo business, but I can see the value of thinking through the process with people who have expertise and can challenge me to think about things in new ways. Wonderful article Kittie!

    Reply
    1. Comment by Kittie Walker, 10:00 am Feb 21, 2013

      Kittie Walker

      Kittie Walker

      Hey Chris!

      Thanks for stopping by, I’m glad that it’s spurred you to consider some collaboration as part of your business planning.

      I’m more than happy to jump onto Skype or a Hangout should you fancy some spitballing! Pretty sure we could persuade Jaap into it as well, he’s familiar with this technique too.

      In fact, happy to the chew over any thorny issues you come up against, if that would help.

  3. Comment by Renee Inman, 10:00 am Feb 21, 2013

    Renee Inman

    Renee Inman

    Thanks for sharing this Kittie. I’m getting ready to make some significant changes within my biz so this couldn’t come at a better time. I love the idea of getting my staff involved in the process!

    Reply
    1. Comment by Kittie Walker, 10:00 am Feb 21, 2013

      Kittie Walker

      Kittie Walker

      Hi Renee,

      Glad it was of use to you. Sounds like you’re in for an exciting time. Can’t wait to hear how it all works out for you.