From Business Plan To Business Model

by Wayne Willis on August 16, 2012

As a "Mentor" with Founders' Institute, I get to see many presentations of ideas for new businesses. Other Mentors and I often comment on the basic components of the business plan -- product features, target market, competitive factors, financing and so on, but I've increasingly noticed that we suggest changes to the business model.

The term "business model" is thrown around loosely, but Alexander Osterwalder, a European business school professor, has done some very interesting work on business models.   He has been developing a framework and a tool to do business model design -- prototyping, as it were.

I recommend you watch this video, and fast forward initially to the case study he starts at 23:20.   It's a wonderful example about how a business model can influence the value of a company without changing the product or the target market.    If you then want to learn more about Osterwalder's framework, you can buy his book, look at the rest of the youtube lecture below, or, better, look at this 20 minute summary YouTube presentation.

Last, Alex has a one-page "canvas" way of documenting the key aspects of a business model, and in this 4-minute version, he shows how the Nespresso business model would be summarized and documented on the Business Model Canvas.

Previous post:

Next post: