Business Model Canvas and Examples of other Business Models Frameworks - Which one to choose?

Many articles dive very deep, describing the different approaches in meticulous detail but not giving enough practical advice about which one to choose for which situation.  However, we want you to look at the more significant ideas of each model to help you decide on this common perplexity.

Design Thinking is how we approach customer problems; Lean Startup is our framework for developing, testing and learning our way to find the right customer solutions, and Agile is how we make and scale our solution. The diagram below explains this by differentiating between the customer problem and customer solution perspective. 

The biggest advantage of this technique is that it minimizes the risk and cost of creating products or services that no one wants and helps you "zero in" on something that customers will embrace.

Feedback plays a critical role in every industry, and it is remarkably essential in the case of startups. After transforming ideas into products, startups focus on comprehending how the customers or the market respond to their products and evaluating whether they should continue or just cut their ends and run. Having a feedback mechanism will help in making this happen.

The Build-Measure-Learn cycle is a feedback loop that is one of the Lean Startup methodology’s core components. Its goal is to turn uncertainties, assumptions, and risks into knowledge or “sure things” that will eventually guide organizations and businesses towards progress. 

In the Build phase, the startup’s goal is to build or develop its MVP – “minimum viable product,” or the bare minimum product that can be built to test several assumptions or the theory formulated – as quickly as possible. It requires faster integration by using techniques like unit tests, Just in time scalability, or refactoring.

In this Measure phase, the startup must then determine whether real progress is being made or not, and this involves measuring the results obtained from the experiment performed during the BUILD phase. In this phase, analysis is the most critical task. It varies from adopting methods like funnel analysis, cohort analysis, split test, etc.

In the Learning phase,  the startup will have to decide based on the estimations gathered: should it “persevere,” or should it “pivot”? Persevere means carrying on with the same goals. At the same time, pivot involves changing or shifting some aspects of the product approach. In the learning phase, accountability and ownership are critical aspects. Methods like smoke tests and questions like five whys should always be considered to learn the product faster.

Following these values, this means that developers need to constantly improve and innovate their products to keep on top of the game — and the linear, sequential approach of the Waterfall method just wasn’t cutting it.

Using these learnings we can combine the 3 methods very nicely in one end-to-end chain to solve customer problems and build a solutions

Now, let's dive one level deeper and address - what we call - Lean Startup based Frameworks. Models which help you to shape the idea better which is at the core of the Lean Startup project.

Now, let's dive one level deeper and address - what we call - Lean Startup based Frameworks. These are Business Model Frameworks which help you to shape the idea / MVP better which is at the core of the Lean Startup. The major frameworks which we look at are.

Before describing each approach in more depth,  we are starting with a comprehensive comparative overview of the Business Model Frameworks Business Model Canvas vs. Lean Canvas vs. Lean Analytics, We are describing the different targets and users, highlight the focus of each methodology on Customer/Product/Market as well as Execution and Financials and describe how each framework strives to achieve competitive adbantage and in which situation it could best be applied.

Based on Eric Ries Lean Startup approach, Alexander Osterwalder initially developed the Business Model Canvas Examples. It is a great way of shaping an idea - mapping it out, allowing it to be understood, tested and improved. 

Later on, Osterwalder designed the Value Proposition Canvas as a natural extensuon of the Business Model Canvas. It's a more detailed look at the connection between the Customer  Segment and Value Propositon part of the broader Business Model Canvas. Customer shares and value recommendations.

The BMC and the VPC provide a framework for innovation. Both tools are single pages which show how all parts of a business work together for success.  The tools allow companies to unite their innovation roadmap under a clear picture showing where it is today and where it could be tomorrow (and how it gets there).

The Canvas Business Model shifts innovation from the 'in theory' phase to the solution phase. Let's take a closer look of how to use them.

Blocks of the Business Model Canvas should be filled in one by one in the following order:

Let's understand the benefits of the Business Model Canvas by providing some benefits and examples.

1. Business Model Canvas is focused - It explains how to get product to customers. It also gives you a competitive opportunity to start a profitable business through product innovation and setting up your business well.

2. Business Model Canvas is clear and concise - It helps you plan the MVP journey so you can easily change as you go. Imagine doing that in a 100-page document!  It is useful for easy communication with your team, investors, partners, and employees to get on board with your vision.

3. Target customer needs -  The canvas of the business model allows you to think outside your product. When you think about how you sell your product, what kind of amenities you need, and the different customer segments you can serve, the business becomes clear. 

4. Reduces the risk of failure - The business model canvas guides you through the required implementation steps to bring your idea to market. Linking the points between your value proposition + futures segments and + income streams is a great addition to your marketing strategy, positioning, or sales strategy. 

5. Scientific framework that works -  Business model canvas is an approach that is sought not only by start-ups but also by innovation in large companies. Nespresso, Nestlé's wholly-owned subsidiary, is a prime example of a powerful business model. It changed the coffee industry’s face by turning a commercial business (selling coffee through sales) into a fixed income business (selling real estate through direct channels).

The Value Proposition Canvas is a tool used to ensure that a product or service is focused on its values and needs. 

It's a detailed look at the connection between two parts of Osterwalder's broader business model, Canvas: the value proposition segment (what you offer your customers) and their customer segments (who your customers are). It is a a great tool for understanding how customers make decisions, and therefore helps to create offers that they will find appealing.

A customer profile should be created for each customer category as each department has specific benefits, pains, and functions. The customer canvas paints a more detailed picture on

The Business Model Framework Lean Canvas uses the same 9-block concept as the Business Model Canvas, except that they are somewhat tailored to the needs/goals/requirements of startup. The Lean Canvas is the perfect one-page format for researching potential business models. The blocks guide you through logical steps starting with customer problems through the unmatched advantage (perhaps the most difficult block to answer).

Let's understand the benefits of the Lean Canvas by providing some examples.

FAST - Instead of creating a business plan that takes several weeks or months, you can outline different business models in one a few hours.

PORTABLE - It's easier to translate a business model from one page to another, which means that more people read it and update it more frequently.

CONCISE - With Lean Canvas, you can brew the essence of your product. You have 30 seconds to get investors' attention on a metaphorical promotional tour and 8 seconds to grab the attention of customers on your landing page.

EFFECTIVE - Whether you're investing with investors or providing updates for your team or board, you can use our established viewing tools to track and communicate your progress.

The chart below defines how you iterate in the Lean-Canvas approach by identifying the most endangered parts of your model and develop relief strategies and by testing continuously with experiments, your product/business model, the risks, and develop mitigation strategies.

Lean analytics is a great method to streamline your sales funnel. The core idea behind focuses on 2 questions: by knowing the type of business you are in and the stage you’re at, you learn how track and optimize the most important metrics that matter to your business right now. 

The Lean Analytics book by Yoskovitz and Croll describes 5 lean analytic stages every startup goes through:

If you closely look at all the Business Model Frameworks presented above, they are falling short when it comes to answer the key financial questions of decision makers. Adding the capability of creating a simple back-of-the-envelope calculation, a traction model or a sophisticated business model and presenting it on one page, increases the trust in your business model significantly and gives decision makers the metrics which matter without waisting your time to create convoluted and errorprone Excel sheets.

The 4 key business questions which investors ask provide the framework for this training:

In particular understanding the unit economics - if Customer Lifetime Value (CLTV) is significantly higher than Cost of Customer Acquisition (CAC) is relevant for funding decisions. 

If unit economic work well, it is great to spend money on scaling your business. Most Excel plans do not answer this question and often investors invest without an understanding of unit economics, thus financing incorrect propositions.

You can experience how to browse and create a Lean-Case here.