For a while now, I have developed an interest – from afar – for Alexander Osterwalder’s Business Model Canvas (BMC) but never taken the time to really study it. That is until this week. It is a very powerful tool for defining and evolving business models; as attested to by the large number of organizations that have adopted it.
Although I am sure there are many presentations to the BMC, I found the video shot at Stanford University in 2012 to be the best (Here is a link to it.). In this video, Alexander uses the example of Nestle’s Nespresso coffee to illustrate the power of this approach. It works quite well.
However, while viewing, I was a bit concerned that he might have missed the reason why businesses exists: to get a return on property. But Alex did not disappoint me. At a certain point, about a third of the way in, he does say, “Patents. Right? Patents [are] a key component of the business model. The entire business model is built on patents because otherwise anybody else could make pods.”
Although the BMC does implicitly recognize the importance of the key component it does not place as much importance on it as it does on the customer. In fact, Alex’s second book is the Value Proposition Canvas, or VPC, which focuses on the relationship between the value proposition and the customer’s needs (or “jobs” as he calls them in the video).
By adding the ROKC™ approach to Alex’s work we can place the key component back into the equation as a counter-weight to his customer centric approach wherein the the value proposition is at the middle of the equation. In doing so, we place the company’s development in the economic, political and cultural framework that is pertinent to the markets within which it operates.
The marriage of ROKC, BMC, and VPC makes for an even more powerful framework for growing your business.