Business Model

What is a Business Model?

• Business Model is a conceptual structure that supports the viability of
the business and explains who the business serves, what it offers,
how it offers it and how it achieves its goals.
An ideal business model usually conveys four key aspects of
the business which is presented using a specialized tool called business
model canvas.
These key components are customers, value proposition, operating
model, and revenue model.
Precisely, a business model answers the following key questions:
• Who is the customer?
• What value does the business deliver to the customers?
• How does the business operate?
• How does the business make money?
Business Model Canvas
Disadvantages of the business model
canvas:
• It doesn’t accommodate businesses in very early stages of
development.
• Enables risky assumptions within the business model, without
offering a clear way to verify them.
• Focuses on the end-shape of the business without defining the
strategy to get there.
Lean Canvas Business Model
• The lean canvas is a variation of the business model canvas for lean
startups
• It was created due to concern with risky assumptions enabled by the
business model canvas
• Operating under high uncertainty is the main challenge for most
startups. The lean canvas helps to solve this problem by framing
business ideas as hypotheses at first. Additionally, it encourages
focusing on the problem as the starting point for building a business.