# Business Model Canvas

## Purpose
Create a visual template for developing and documenting your business model hypotheses across 9 interconnected building blocks.

## When to Use
- Starting a new venture and need to articulate the business model
- Validating whether all pieces of the business fit together
- Identifying which assumptions need testing first
- Communicating business model to team, investors, or advisors
- Refining an existing business when something isn't working

## Process

### 1. Map the 9 Building Blocks

Work through each block with your current best guesses:

**Customer Side (Right):**

1. **Customer Segments** - Who are you creating value for?
   - Which segments are most important?
   - Mass market, niche, segmented, diversified, or multi-sided platform?
   - Who is the economic buyer vs. the user?

2. **Value Propositions** - What problem are you solving?
   - What job does this help the customer do?
   - What pain does it relieve?
   - What gain does it create?
   - Why will they choose you over alternatives?

3. **Channels** - How do you reach customers?
   - Awareness: How do they discover you?
   - Evaluation: How do they assess your value proposition?
   - Purchase: How do they buy?
   - Delivery: How do you deliver value?
   - After-sales: How do you provide support?

4. **Customer Relationships** - How do you acquire, retain, and grow?
   - Personal assistance, dedicated support, self-service, automated?
   - Community building or co-creation?
   - What's the relationship lifecycle?

5. **Revenue Streams** - How do you capture value?
   - Asset sale, subscription, usage fee, licensing, brokerage, advertising?
   - What are customers actually willing to pay for?
   - Fixed vs. dynamic pricing?

**Infrastructure Side (Left):**

6. **Key Resources** - What do you need to deliver?
   - Physical, intellectual, human, financial resources?
   - What's truly differentiated vs. commodity?

7. **Key Activities** - What must you do well?
   - Production, problem-solving, platform/network building?
   - What activities drive your value proposition?

8. **Key Partnerships** - Who helps you?
   - Strategic alliances, coopetition, joint ventures, buyer-supplier?
   - What resources or activities do partners provide?

9. **Cost Structure** - What does it cost to operate?
   - Fixed costs, variable costs?
   - Cost-driven vs. value-driven?
   - Economies of scale or scope?

### 2. Identify the Connections

Look at how blocks relate:
- Does your value proposition match customer segment needs?
- Can your channels actually reach your customer segments?
- Do your key activities support your value proposition?
- Do revenue streams exceed cost structure?

### 3. Prioritize Riskiest Assumptions

For each block, ask:
- What must be true for this to work?
- How confident am I in this assumption?
- What's the consequence if I'm wrong?

**High-risk assumptions typically include:**
- Customers will pay $X for this
- Customers can be acquired through Y channel at Z cost
- We can build/deliver this with our resources
- The unit economics work (LTV > CAC)

### 4. Design Tests

For your top 3-5 riskiest assumptions:
- What's the minimum test to validate or invalidate?
- What would "validated" look like?
- What would "invalidated" look like?

### 5. Synthesis

- Does the model hang together logically?
- Which blocks have the most uncertainty?
- What would kill this business fastest if wrong?
- What should be tested first?

## Example

**Idea**: "AI-powered executive assistant for solopreneurs"

### Canvas

**Customer Segments:**
- Solopreneurs earning $100K-$500K/year
- Service-based businesses (consultants, coaches, freelancers)
- Technically curious but time-poor

**Value Propositions:**
- Save 10+ hours/week on admin tasks
- Never miss follow-ups or deadlines
- Work like you have a full-time assistant at 10% of the cost

**Channels:**
- Discovery: LinkedIn content, podcast appearances
- Evaluation: Free trial + case studies
- Purchase: Self-serve SaaS
- Delivery: Web app + mobile
- Support: In-app chat + knowledge base

**Customer Relationships:**
- Self-service primary
- Automated onboarding
- Community Slack for power users
- High-touch for highest-tier customers

**Revenue Streams:**
- Monthly subscription: $99/mo (Basic), $299/mo (Pro)
- Annual discount: 2 months free

**Key Resources:**
- AI/ML engineering team
- Customer success playbooks
- Integration partnerships (Google, Zoom, etc.)

**Key Activities:**
- AI model training and improvement
- Integration development
- Customer onboarding optimization
- Content marketing

**Key Partnerships:**
- Calendar providers (Google, Microsoft)
- CRM integrations (HubSpot, Pipedrive)
- AI infrastructure (OpenAI, Anthropic)

**Cost Structure:**
- AI compute costs (variable)
- Engineering salaries (fixed)
- Customer acquisition (variable)
- Infrastructure (fixed + variable)

### Risk Analysis

**Highest-risk assumptions:**
1. Solopreneurs will pay $99-299/mo for this (revenue)
2. We can acquire customers at <$500 CAC (channels)
3. AI accuracy is good enough for real scheduling (value prop)
4. Unit economics work at $99 price point (cost structure)

**Tests to run first:**
1. Landing page with pricing → measure sign-ups (willingness to pay)
2. Manual concierge service → measure retention (value delivered)
3. Small ad spend → measure actual CAC (acquisition cost)

**Insight:** The business model looks viable IF we can keep CAC under $500 and the AI accuracy exceeds 90%. These are the critical assumptions to test before building.
