How to deal with customers problem and solution explanation with the business model canvas

September is a special time for me. Essentially, on top of my usual work with startups and large corporations, I’m teaching innovation and business strategy for different Master classes. To say that I’m a bit busy is a gentle understatement, but what can I say, I love that. These last weeks I have parked a few ideas for new posts on the blog. But before I can find some time to explore them further and share them with you, let me just share something that I posted on Quora a few weeks ago, where a question was asked on the business model canvas.

I’ve started to explain why I like this tool, but also why I find it lacking in many ways. The answer I brought to question asked, further explains part of my perspective…

How do you incorporate nailing the “Problem” and “Solution” into the business model canvas?

In a startup, hypothesizing the customer pain and then validating the pain is a critical step. Doing the same for the solution is also important. However, I don’t see either a “pain” building block or a “solution” building block on the canvas. Where/how do you incorporate these into the model?

I wouldn’t try to squeeze everything in the description of the business model.

Essentially the numerous tools that help you describe a BM, such as the excellent “canvas”, should explain synthetically how you logically connect your value offer to customers segments, using a product portfolio and gaining revenues (not only money) along the way.

The business model is not the alpha and the omega. It serves a purpose: understanding, explaining and challenging your business scenario. If you go down that that road you will end up trying to squeeze strategic positioning in regard to competitors. And I wouldn’t do that.

As far as I’m concerned the BM is a central piece of business design. Above it, you need to state your strategic vision and intent. Check “The Discipline of Market Leaders” from Michael Treacy et Fred Wiersema on that point. Then, wrap your BM as a mission statement (mantras and taglines as extra communication features), and when/if your life depends on it… end up by writing a business plan.

The problem formulation should mirror your value offer proposition, which is the solution. But you don’t have to explain the problem in the BM. You will when you communicate and pitch. The pain points are detailed when you describe your key assumptions and formulate your added value, picture it in a magic quadrant, and explain in details your competitive space by benchmarking the pain points solutions that you deliver (your value offer) vs. competition.

You’ll find here a more clear picture of what I mean, and how the design / learning / communicating perspectives connect together, in the way I see things:

merkapt startup vision

As an important side note, the “explore” part in red, being business innovation methodologies to push the envelope!

So essentially, don’t try to do everything with your BM or you will obfuscate it. It should stay a simple, elegant explanation that fits on a napkin. Step back and connect the other tools.

The answer is consistent with what I believe the BM canvas is: a fantastic tool to draft your business model, but also something that doesn’t go to the finish line. And I see many startups – or full frown businesses for that matter – too lazy to finish the work.

Wake up: there’s no method that you will be able to apply blindfolded.

Author: Philippe

After obtaining a PhD in biotechnologies, and working in a medical diagnostic startup, Philippe Méda has managed teams and companies in the medical and pharmaceutical industries for over fifteen years. Following an MBA in 2007 Philippe founded Merkapt, a consulting agency in charge of co-piloting innovation for startups and large multinationals, in Europe, and Asia. Since then he has been training 200 to 300 startups a year, consulted for dozens of multinationals on rupture innovation or corporate incubation, and was directly involved in more than 150 startups building their market fit and scaling up their business. Philippe also teaches innovation and business model design in key MBA programs in Paris and Shanghai and is now living in Amsterdam.