The LINEAR Business Model Canvas for Business Investors, Mentors, and Startups

Copyright 2012. Dr. Rod King. [email protected] & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing “Visually Organize and Manage the World’s Systems, Projects, and Trends”

HEROES

Compete Different

THE LINEAR BUSINESS MODEL CANVAS

FOR BUSINESS INVESTORS, MENTORS, AND STARTUPS

How to Deeply Understand and Manage

Performance Improvement, Business Model Innovation, and Shared Value

Rod King, Ph.D.

For People

Who Are Looking For

Simpler, More Powerful, and Versatile Tools

To

Manage

Performance Improvement,

Business Model Innovation, and

Shared Value


The Business Model Canvas

Was Created by Alexander Osterwalder and

Is Basically

A Visually Structured Dashboard (“Canvas”) For

Documenting Information About

The Building Blocks of a Business Model

Or

The Elements of a Business Ecosystem


A Business Model

Is

A Visual Representation, Story Plot, or

Dynamic Simulation of a Living Organization That

Viably Pursues and Achieves

A Hierarchy of Goals Especially of

Increasing the Number of Profitable Customers &

Delivering Greater Value in the Ecosystem


9 Topics and Layout of The Non‐Linear Business Model Canvas

Source: Hhttp://en.wikipedia.org/wiki/Business_Model_Canvas


From a Kinesthetic Perspective,

Creating the Linear Business Model Canvas

Involves

“Flattening”

Or

“Thinking Out of the Box” of

The Non‐Linear Business Model Canvas


The Linear Business Model Canvas

Is Essentially

A Chain of the 9 Topics on The Business Model Canvas:

KP KR KA VP CH CR CS R$ C$

Effect (Result)Cause

On the Linear Business Model Canvas,

The 9 Topics Are Arranged in

A Linear Sequence That Reflects

The Cause‐and‐Effect Chain of an Ecosystem: Input‐Processing‐Output‐Feedback‐Environment‐Result (IPOFER)


A Unique Characteristic of


Is

Generalization of the Topics of

“Revenue Streams” and “Cost Structure.”

“Revenue Streams” has an extended description

of “Delight”

“Cost Structure” is now described under “Pain”


The Inclusion of “Delight” and “Pain”

In

the Linear Business Model Canvas Allows

Value to Be Defined

As the Ratio of Delight to Pain

(Instead of Just As Profit or the Ratio of Revenue to Cost).

Also, the Above Description of Value

Means That the Linear Business Model Canvas

Can Be Applied to All Types of Projects.


Ideally,

The Maximization of Value

Involves …

o Maximization of Delight: Revenue (Streams); Performance; Functionality; Quality; Reliability; Brand/Image/Reputation; Differentiation; Customization/Personalization

o Minimization of Pain: Cost (Structure); Size; Weight; Waste; Defects; Complexity; Inaccessibility; Inconvenience; Time (Delay); Obstacles/Barriers/Problems; Risks


High Low PAIN (‐): Cost

DELIGHT Revenue;

Differentiation; Quality

(+):

Low

High 1 2 3

4 5 6

7 8 9

9 Archetypal Business Models

Business Models

Key BLUE OCEAN SWEET SPOT LUXURY SPOT DISRUPTION (LEAN) SPOT Profitable

421

3

The Linear Business Model Canvas: An Outline of 9 Topics

KP Key Partnerships (Partners/Alliances/Complementors)

KR Key Resources (Supplies/Inputs/Employees/Machinery/Tool)

KA Key Activities (Process/Strategy/Business Job‐To‐Be‐Done)

VP Value Proposition (Product/Service)

CH Channels (Distribution)

CR Customer Relationships (Engagement/Acquisition/Retention)

CS Customer Segments (Problems/Needs/Job‐To‐Be‐Done)

R$

Revenue Streams (Delight: +)

Cost Structure (Pain: ‐) (Value = Delight/Pain)

C$


NOW, YOU CAN

INSTANTLY AND COLLABORATIVELY USE

THE LINEAR BUSINESS MODEL CANVAS

FOR PROJECTS

ANYWHERE AND EVERYWHERE:

No Special Graphic Layout or Canvas

Is

Required


THE MINIMUM LINEAR BUSINESS MODEL CANVAS

IS ENTIRELY TEXT‐BASED.

This Linear Business Model Canvas

Does Not Need

Any Special or Dedicated Software


THE MINIMUM LINEAR BUSINESS MODEL CANVAS

REQUIRES ONLY PEN AND BLANK PAPER

OR

BASIC TEXT‐EDITING (WORD PROCESING) SOFTWARE


Background on


Rod King Created the Linear Business Model Canvas as

A “Minimum Viable Product (MVP)”

of the Business Model Canvas

Which Was Created By Alexander Osterwalder and Featured in the Book,

“Business Model Generation.”



Main Purpose of



Focuses on Ubiquitously

Achieving Performance Improvement and

Business Model Innovation

In

Simpler, Faster, and “Funner” Ways

Universality of



Can Also Be Regarded As One of Many Systems

[“Minimum Viable Interfaces,” Dashboards, or Objects]

For Portrayal on the Visual Platform of

The Disruptor’s Arrow of Time

Which Integrates All Tools in Strategic Management


Advantages of The Linear Business Model Canvas

Elimination of Complex Graphic Layout (Canvas): Easier to Read Linear Format

Simplicity in Form and Structure; Infinitely Long (“DNA” Fractal) Format

Intuitive Linear Logic That is Applicable to All Systems: Living and Non‐living

Faster Learning and Easier Application; Easier Customization and Extension

Direct Linkage to Existing Tools of Business/Strategic Planning, Performance Management, Total Quality Management, Business Process Improvement, Product Innovation, Inventive Problem Solving, and Portfolio Management

Collaborative Development of Strategy (Blue Ocean Strategy) and Scenarios

Easier Development, Update, and Tracking of Business Model Plan/Dashboard

Diversified and Novel Linear Layouts for Topics of the Business Model Canvas

Facilitates Comparative Analysis, Benchmarking, and Pattern Identification

Can Easily Be Presented as a Game in Many Formats; Facilitates Gamification

Outline of Topics Can Easily Be Converted to a Report for a Business Model Plan


Logic of Sequence on The Linear Business Model Canvas

Key Partnerships

Key Resources

Key Activities (Processing)

Value Proposition (Product)

Channels (Distribution)

Customer Relationships

Customer Segments

Revenue Streams (Delight)

Cost Structure (Pain)

Upstream

HOW?

[D]esign

‐ Input/Processing/Output (System)

Midstream

WHAT?

[N]eeds

‐ Local Environment

Downstream

WHY?

[A]spirations

‐ Result (Effect)

Left Brain ‐ Evaluate

SUPPLY INFRASTRUCTURE (Inside the Enterprise)

Right Brain ‐ Explore

DEMAND INFRASTRUCTURE (Outside the Enterprise)

Total Brain ‐ Envision

SHARED VALUE (= Delight/Pain)

E

C

O

S

Y

S

T

E

M

(Supply/ Input)

Product‐Market Fitness (Feedback)

KP

KR

KA

VP

CH

CR

CS

R$

C$


The Usefulness, Areas of Application, and Power

Of

The Linear Business Model Canvas Are

Exponentially Increased

When the Linear Business Model Canvas

Is Presented on




Disruptor’s Arrow of Time (DAT): ………………………………………….……………………………….. Client/Customer: ………………………………….……

Objective: ……………………………………………………………………………………………………………………………. Date: ………………………………….……

PRESENT SYSTEM (Where currently are we?)

VALUE DISRUPTION STRATEGY – Evolve, Plan, or Disrupt: E.R.I.C.

(Eliminate/Reduce/Increase/Create)

FUTURE SYSTEM (Where must we go?)

Short/Medium/Long‐term

CONSTRAINTS (What are constraints/obstacles/barriers/problems that prevent full realization of future system/vision/dream/IFR)?

DREAM/ VISION/ Ideal Final Result (IFR): Value (+/‐)


Linear BMC‐Arrow of Time (LBMC‐AT): …………………………..…………………………………….. Client/Customer: ………………………………….……

Objective: Business Model Documentation, Improvement, Innovation, and Presentation Date: ………………………………….……

PRESENT SYSTEM – Linear Business Model Canvas (LBMC)



FUTURE SYSTEM – Linear Business Model Canvas (LBMC)

Short/Medium/Long‐term KP – Key Partners

KR – Key Resources

KA – Key Activities

VP – Value Proposition

CH – Channels

CR – Customer Relationships

CS – Customer Segments

R$ – Revenue Streams (Delight: +)

C$ – Cost Structure (Pain: ‐)


KP

KR

KA

VP

CH

CR

CS

C$

R$



Linear BMC‐Arrow of Time (LBMC‐AT) for “Business Model Generation” Project Client/Customer: ………………………………….……


PRESENT SYSTEM – 2008 Linear Business Model Canvas (LBMC)

For Traditional Book Authors/Publishers



FUTURE SYSTEM – 2009 Linear Business Model Canvas (LBMC)

For “Business Model Generation” Project KP – Key Partners Publishers

Eliminate Publishers The Movement (Design); Ning Platform; Amazon.com; 3rd Party Logistics Company

KR – Key Resources

Blog and Visibility on the Web; Business Model Hub; Powerful Methodology

KA – Key Activities Logistics & Shipping

Eliminate Logistics & Shipping Content Production; Hub Management; Guerilla Marketing and Word‐of‐Mouth

VP – Value Proposition

Visual, Practical, and Beautiful Handbook; Co‐creation; Personalized Book

CH – Channels Intermediation Through Publishers

Eliminate Intermediation Through Publishers

Hub Members; Word‐of‐Mouth; Amazon. com; BusinessModelHub.com; Book Stores

CR – Customer Relationships

Businessmodelhub.com; Business Model Event (Amsterdam)

CS – Customer Segments

Visionaries, Game Changers, and Challeng‐ers; Entrepreneurs, Execs, etc.; Companies

R$ – Revenue Streams (Delight: +)

Hub Membership Fees; Advance & Post‐publication Sales; Giveaways; Royalties; etc.

C$ – Cost Structure (Pain: ‐)

Design; Content Production; Printing; Distribution


Reference: Osterwalder, A.; Pigneur, Y. (2009) Business Model Generation. Amsterdam: Modderman Drukwerk.


KP

KR

KA

VP

CH

CR

CS

R$

C$


BME‐Arrow of Time (BME‐AT): …………………………..………………………………………………….. Client/Customer: ………………………………….……

Objective: Industry and Environmental Analysis; Competitive Advantage Date: ……………………………….……

PRESENT SYSTEM – Business Model Environment (LBME)

Global Environment



FUTURE SYSTEM – Short/Medium/Long‐term Business Model Environment (LBME)

Global Environment

INDUSTRY FORCES

MARKET FORCES

MACRO‐ECONOMIC FORCES

PESTLIED FACTORS (KEY TRENDS)



Key: PESTLIED = Political; Economic; Social; Technological; Legal; International; Environmental; Demographic

Universal System Modeling

Using the Interface of the

“SEMPORCES” Tool

A More Comprehensive and

APPENDIX


“SEMPORCES” Tool for Living & Non‐living Ecosystems

Suppliers/Inputs/Partners S

Employees/Brand/IP/etc. E

C

O

S

Y

S

T

E

M

Upstream

HOW?

[D]esign

‐ Input/Processing/Output (System)

E

Machinery/Facilities/etc. M

Process/Strategy P

Midstream

WHAT?

[N]eeds

‐ Global/Local Environment

Output (Product/Service) O

Retailers/Channels R

Customers/Consumers C

Environment (Global) E

Shared Value (Delight/Pain)

Product‐Market Fitness (Feedback)

Total Brain – Envision SHARED VALUE Delight/Pain) (=

Downstream WHY? [A]spirations ‐ Result (Effect)

Right Brain ‐ Explore

DEMAND INFRASTRUCTURE (Outside the Enterprise)

SUPPLY INFRASTRUCTURE (Inside the Enterprise)

Left Brain ‐ Evaluate

S



SEMPORCES‐Arrow of Time (S‐AT): …………………..…..………………………………………..…….. Client/Customer: ………………………………….……


PRESENT SYSTEM – SEMPORCES



FUTURE SYSTEM – SEMPORCES

Short/Medium/Long‐term S – Suppliers/Inputs/Partners

E – Employees/Culture/Brand/IP

M – Machinery/Technology/Tool/Infra’

P – Process/Strategy/Job To Be Done

O – Output (Product/Service)

R – Retailers/Distributors/Channels/CRM

C – Customers/Consumers (Problems)

E – Environment (Global)

S – Shared Dream/Mission/Result/ROI



S

E

M

P

O

R

C

E

S


Is

The Main Tool for

Business Model Project Management

(BMPM)


Plan, Organize, Manage, and Present

(Business) Projects

In

Simpler, Better, Leaner, and Faster Ways



“Every Object in the Universe

Is

A System or an Ecosystem

That Can Be Described Using

The Same Categories as in

A Business DNA Model,

Linear Business Model Canvas, and/or

Disruptor’s Arrow of Time”

The LINEAR Business Model Canvas for Business Investors, Mentors, and Startups

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