Business Model canvas: how to get value from the main “frameworks for success”
A startup is a startup is a startup… Or is it?
Sure, a Startup is first and foremost a stage in a company lifecycle. Yet by grouping all early-stage companies under a single label, one gets the impression they are more similar than they really are and that a one-size-fits-all approach should work. As any founder would tell you: it doesn’t!
A startup is first and foremost a state of mind and a story of disruption, and each startup is as different as its founding team.
What we know is the desired results: fast growth and scalability following a superlinear (exponential) path. Succesful startups find a lever to lift the world.
And what we also know is the context: thriving on uncertainty.
“A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.” Eric Ries, Lean Startup.
So it’s understandable entrepreneurs are looking for some type of guidance, a “how-to” guide. But what to make of all these frameworks and templates trying to guide new entrepreneurs and demistify the world of startups? Has anyone found the magic recipe for success, and is the list of secret ingredients adding up to a tasty dish? Well, to continue on my cooking metaphor, it all depends on the skills of the chef!
Some of the most popular frameworks from the past decade include:
Business Model Canvas (2010) created by Alexander Osterwalder and Yves Pigneur.
Lean Startup (2011), coined by Eric Ries based on lean manufacturing and Steve Blank’s “Customer Development Model”.
Disciplined Entrepreneurship (2013), developed by Bill Aulet based on his experience nurturing startups out of MIT for more than 9 years.
Each one of these methodologies was created with flexibility in mind. They try and provide a framework for the uncertain nature of innovation-driven enterprises. Through them, you’re encouraged to test, iterate and adjust. You build your company knowing real market needs, based on feedback and research.
What we don’t know is: do they actually work? Is an entrepreneur following the template any more likely to be successful? Is any method better than the others, at least for your specific type of startup? Is just having a methodology, any methodology, better than having none?
If you ask first-time entrepreneurs, the answer will be a resounding yes! Yet it seems the main benefit is in giving a (false?) sense of confidence: just follow steps 1, 2 and 3 and hop, you’re a unicorn!
But speak to second or third time founders and you’ll get a different answer: it’s good to have a starting point, but -as your business model will likely pivot- so will your approach.
For instance, in the Business Model Canvas, I really like how it helps highlight the strengths and weaknesses in your business model.
In Lean Startup, I like the test & learn approach, reducing risk whilst validating assumptions.
In my opinion, the main added-value of these methods is they help you speak a common language, especially the language of the initiated — aka the VC community. They help you sell your vision. So my take is use them to study how the startup community thinks and speaks, but pick and mix the elements that work for you.
In conclusion, explore these methodologies when you’re starting think about a startup, or when you need a new stimulus to change you thinking. They’ll give you ideas, they’ll challenge your existing assumptions and ways of working, and therein lies the real value.