The business model canvas, and what to do with it afterwards
The canvas is the best thinking tool in this whole category and the worst plan section. It is built for a whiteboard and an argument; pasted into a document as a picture of nine boxes it says almost nothing.
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Fill it in in this order
Left to right is the conventional layout and the wrong sequence. Start in the middle with the value proposition, go right to the customer, then left to how you deliver it, and finish with the two financial blocks — because those are consequences of everything else, not inputs to it.
- 1. Value proposition
- The specific job you do for a specific person. If it applies to everybody, the canvas will be wrong in eight other places.
- 2. Customer segments
- Who exactly. Not “small businesses” — small businesses of what kind, with what problem, at what stage.
- 3. Channels and relationships
- How they find you and what keeps them. Both have a cost, and both belong in the model.
- 4. Key activities, resources and partners
- What you actually have to do and own. This is where capacity limits become visible.
- 5. Cost structure and revenue streams
- Last, because they fall out of the four above. Filling these in first is how a canvas ends up describing a business nobody is running.
Connect every box to a number
The single biggest improvement you can make to a canvas is to refuse to leave any box unconnected to the financial model. It converts a diagram into a set of claims, and claims can be checked.
| Canvas block | The model variable it drives |
|---|---|
| Customer segments | The population count at the top of the bottom-up market build |
| Value proposition | Price, and the share of the qualified population who convert |
| Channels | Acquisition cost, and the monthly marketing spend that implies |
| Customer relationships | Churn, repeat rate, and therefore lifetime value |
| Revenue streams | The driver build itself — units, seats, covers, contracts |
| Key resources and activities | Headcount, capacity ceiling, and the capital expenditure to reach it |
| Key partners | Cost of goods, supplier terms, and the payables cycle |
| Cost structure | Fixed opex, the direct cost per unit, and the break-even that follows |
What belongs in the plan
Not the grid. The output of the grid: a paragraph on who the customer is and what job you do for them, a paragraph on how they reach you and what that costs, and a model whose drivers are visibly the same ones the canvas named.
Every rule here is enforced by the product.
The checks this article describes are the checks that run before a plan can be exported. Free to generate and read.