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Think “business-first” not “product-first”

by Jeff Chamberlain  |  July 11, 2018  |  4 Comments

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.

Product_Biz_ModelInt_ScreenGrab

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.

Category: 

Tags: business-model  business-model-canvas  business-planning  

Jeff Chamberlain
Research Director
1 years at Gartner
37 years IT Industry

Jeff Chamberlain is a Research Director focusing on software applications product marketing. He specializes in advising enterprise application software vendors on their go-to-market strategies. Read Full Bio


Thoughts on Think “business-first” not “product-first”


  1. Kathy Mast says:

    Jeff,

    I bought a first day publication of the “Business Model Generation” book and canvas. It took a while for customers to see the value. Now I use it as a strategy tool primarily in leadership workshops. We plot current and future state using the canvas. Results are always amazing, bring focus and there are many “ah-ha” moments. I think it is a really great tool. If you’d like to know more about my work, send me an email. Best regards, Kathy Mast

  2. James Frail says:

    I have been doing Business Transformation consulting for 20 years (Stevenson frail.com) and use a broad range of models to help facilitate group discussion and decision making.

    I like the visual structured simplicity of the Business Model Canvas. There is a learning curve to using the BMC but once achieved it creates a common framework that enables efficient communication of business model basics.

    I’m using it on a start up that I’m involved in that has multiple stakeholders “interested” (values based conflicts) in the use of public land and the team is using the more detailed Customer Value Proposition Design Canvas for understanding customer and stakeholder needs driving our decision making to create a better fit for all.

    I also attended an Entrepreneurial coaching session put on by local government where participants generated one Canvas as an output. There is a lot more to a startup than generating one static point in time canvas(!) but the BMC helped participants to tell their story and also it clearly facilitated their understanding and discussion around the other participant’s business models. The dynamic design thinking process is more important to learn than the canvas itself.

    Mistakes I see organizations make are forgetting to look outside the canvas to do a solid external environment analysis (critical for leveraging momentum from trends) not getting out to talk to prospective customers about their needs, not testing value proposition choices early enough (see “Sprint” Knapp/Zeratsky/Kowitz for some incredible hacks for skipping unnecessary time and cost to build product or service for tests) settling for being a “me to” organization by failing to find a unique position vs others (which can clearly be communicated by the Strategy Canvas from “Blue Ocean Strategy” Kim/Mauborgne), or not defining their Brand, Culture and Growth formula (see “The Startup Equation” a great general book for growth organizations) and not really working the Channels box on the BMC (see “Traction” Weinberg/Mares), and believing they need to own all the resources are common mistakes to avoid.

    The startup team I’m involved in we have spent less than $1000, we have talked to and surveyed over 1000 people to identify needs, we are testing channels, we have financials and a phased development plan and we haven’t incorporated and we don’t have a website etc etc.

    The BMC is great for Business Model innovation but the customer value is the most important part.

  3. ecce solitas says:

    It would be really great if we see in the future how this model can be applied in Blockchain-based Business Models and Products.

    • Jeff Chamberlain says:

      From my perspective, there’s nothing about the business model canvas that makes it more or less applicable to a particular technology-based solution. The purpose is to focus on the value provided with the technology as an enabler. The technology comes in to play primarily where you consider what resources (expertise, skills) you need to support your value proposition.



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