If you’ve spent any time around technology start-up businesses, you’ve heard someone discussing a product pivot. This term entered our vernacular a number of years ago along with lean startup and minimally viable product. Essentially, a product pivot happens when a company is not getting the desired traction and looks for a way to leverage their technology or knowledge into a new product in hopes of having more success. However, we all have examples of situations where the best product lost to a better business model. So, why do we think more about the product pivoting than about making changes to our business model to drive success? We should all strive to have a “business-first” mentality versus a “product-first” mentality. In this age of disruption and digital business, this type of thinking applies to everyone..not just tech start-ups. We are all looking for ways to reinvent ourselves to improve performance and avoid being toppled by the next disruptive business model.
But wanting to change and knowing how to change are two very different things. How do you adjust your focus from the product or specific tactics to a more holistic view of your business model and all the intricate relationships between aspects of your business? This question gave birth to the Business Model Canvas that was proposed by Alexander Osterwalder, a Swiss business theorist and co-founder of Strategyzer, a consultancy that focuses on the topic of business models. Osterwalder released the Business Model Canvas under Creative Commons, essentially making it available for free use with attribution by companies and consultants alike.
I recently released a new Gartner Research note that takes a look at why you want to visualize your business model and how you can do that using the Business Model Canvas as a template. It further illustrates how the Business Model Canvas can be used to consider and discuss potential changes such as creating a low-end version of a product or expanding to a new geography and provides an example completed canvas for reference. You can see a summary here and access it if you are a client.
I would love to hear from you regarding forays into business model evaluation, tweaks and the process you use to manage it. If you have used the Business Model Canvas and have an opinion, I would love to hear that as well.
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