Examples of a Business Model Canvas
The business model canvas is one of the most used resources for new entrepreneurs. If you’ve gone through any sort of entrepreneurial education training, you’ve most likely seen the business model canvas. In this blog post, we go over business model canvas examples to help you use the business model canvas.
If you don’t know what the business model canvas is, that’s okay! You don’t have to know what the business model canvas is to be a successful entrepreneur.
To preface this blog post, in our experience, the business model canvas typically works a bit better with startups rather than main street businesses. The business model canvas can still work for those that have a main street business, but it may not be as useful. That’s our friendly disclaimer before you get into this post!
In this blog post, I cover three examples of a business model canvas. I did examples of a main street business, a physical good startup, and a software startup.
Business Model Canvas Example 1: Main Street Business - Ice Cream Shop
Just as I mentioned above, in my experience, the business model canvas doesn’t always work great for those that have a main street business. However, I still did a business model canvas example for a main street business.
In this example, I acted like we had our own local ice cream shop. So, you can picture a local Dairy Queen or a family owned ice cream shop that you went to all the time as a teenager.
Here’s my explanation of each building block in this business model canvas example:
- Customer Segments: For a local ice cream shop, I assumed that there’s two main customer segments, young families that participate in youth sports and local teenagers looking to get away from their parents when they can. These segments might still be broad, so if we actually had an ice cream shop in a small town, we might narrow these down a bit more. Narrowing down these would be “families that play within the Harrisburg Youth Sports programs”. If you’re not sure if you’re narrow enough, just think through if customers have different needs within a particular segment. You can always group segments together.
- Value Propositions: Since we have two customer segments, we need at least two value propositions. I made three of them. Our value propositions are entertainment for families, a place for families to celebrate and hang out, and a safe place for teens to hang out. As you can see, I made two value propositions for the young families and one for teens. For families, I assumed that families would typically come after they won a game or they’re coming as a family when they don’t have sporting events and want to still have quality time together. For teens, they might struggle arguing with parents to get out of the house. If they can say they’re going to a safe space, it makes it more bearable for parents to be okay with teenagers hanging out there.
- Channels: I assumed we are using three main channels to gain customers: community partnerships and sponsorships, Instagram, and Local PR. Nothing too fancy with these channels.
- Customer Relationships: Since we’re a local shop and the community needs to trust us for us to be successful, personal relationships with customers is going to be key. If try to automate these relationships, people will lose their trust as they won’t know who we are. We’re not a big national brand that can assume they have trust from families.
- Revenue Streams: Just like channels, nothing too special here. Our main sources of revenue would be serving ice cream, cartons of ice cream, and special events such as sporting events that we might cater.
- Key Resources: If we’re an ice cream shop, we’re going to assume that we can’t hire college graduates full time at a competitive wage to just serve ice cream. We’ll need the top talent out of the high schools and colleges to help us be the best local ice cream shop. If we don’t have the top talent of those places, it’ll be tough for us to have a successful ice cream shop.
- Key Activities: We’ll spend most of our time making and serving ice cream, but also being active in our community to ensure our partnerships are always active.
- Key Partnerships: If we don’t have great ice cream suppliers, partnerships with schools or community organizations, we’re going to have a hard time existing. We have to have good relationships with all of these stakeholders for us to have the community trust and support.
- Cost Structure: In terms of percentages of revenue, the majority of our costs will be with ice cream supplies, our team, and potentially space depending on where the ice cream shop is located.
Business Model Canvas Example 2: Physical Good Startup
For our physical good startup example, I used the Dollar Shave Club example. If you don’t know what the Dollar Shave Club is, you have to watch their old, but goodie marketing video. They have been the definition of what a viral video is for a long time now.
Here’s my explanation of each building block in this business model canvas example:
- Customer Segments: E-commerce is usually a younger crowd for early adopters, so 20-40 year olds, and they’re marketing that they solve the problem of shaving hair off your face, so it’s going to be younger men that are their main customer segment.
- Value Propositions: They’re more affordable than other solutions on the market, and they’re more convenient for most people as they ship the supplies you need for shaving right to your door. You don’t have to go to the store to get the goods any more.
- Channels: They’re known for their famous viral video, so I’ll assume YouTube and then creative TV ads could be a big part of their marketing channels.
- Customer Relationships: Dollar Shave Club is an e-commerce company that doesn’t need to know every single customer personally. When they first started they most likely knew their customers personally, but once they’ve grown to the size they are now, there’s not much need to know their customers personally. Automatic messages and mass communication tools like email suffice for working with customers.
- Revenue Streams: They have other products than their shaving supplies, but to keep this example simple, they’re main revenue stream is their monthly subscription for shaving supplies.
- Key Resources: In theory, there’s nothing that unique to Dollar Shave Club, which is why they’re being copied a bit in the marketplace. They may have patents around some of their products, but at the end of the day, their brand is what’s going to seperate them from the rest of the pack. Their brand is what makes them trustworthy for a lot of customers.
- Key Activities: To keep things going, most of their time will be going into designing new products to give to their manufacturer and they’ll have to keep up their marketing strategies to adjust where the business is going.
- Key Partnerships: Dollar Shave Club most likely isn’t manufacturing their own goods, so third-party suppliers and manufacturers are key.
- Cost Structure: Their cost of goods are their main cost of doing business, but also supply chain talent is crucial too. If they don’t have a good supply chain, that could dramatically hurt Dollar Shave Club to a point where they can’t function.
Business Model Canvas Example 3: Software Startup
If there’s a particular company that really fits the business model canvas, it would be a software startup. These kinds of companies make great business model canvas examples.
In this example, I used Spotify, the service that is so popular that it feels like they’ve taken over the music industry - to a point where they beat Apple at their own game to an extent. To do that, they needed key partners and other aspects of the business model canvas, so that’s why I made Spotify our business model canvas example for software startups.
- Customer Segments: For the early adopters of Spotify, they were most likely younger music listeners that love a wide variety of music. Those would be the ones we would assume get the most value out of Spotify. In addition to listeners though, Spotify has to see artists as a customer too in some sense. If they don’t have artists that “buy” into what Spotify is offering, Spotify doesn’t exist. I don’t necessarily have to put music artists as a customer and I could see why someone wouldn’t put them as a customer, but the more I thought about it, the more I believed they are a different type of customer. Spotify is most likely an anomaly with this type of situation.
- Value Propositions: Spotify makes more music available to more people, which allows listeners to be able to discover more new music and that helps artists get value. Artists can get better distribution of their songs if they work with Spotify.
- Channels: If you see a Spotify ad, it’s most likely in some sort of mass transit billboard or advertisement. It’s where a lot of people have their headphones in, so it makes tons of sense why they would advertise there. Additionally, in some ways, they market through artists. Artists can share their songs with their current following through Spotify links. The musical artists that Spotify has are really key assets for Spotify as we can see through this business model canvas example.
- Customer Relationships: For listeners, Spotify can use mass communication if they need to. They most likely don’t need a lot of communication once someone uses Spotify daily for their music needs. For Spotify to keep their artists, they most likely have personal relationships with the artists and record labels.
- Revenue Streams: Let’s keep it simple. Spotify is a great example of keeping revenue streams simple. They rely on advertisers and monthly subscribers. The beauty of Spotify is that it’s a sticky business where most people just pay their monthly subscription without thinking twice about it.
- Key Resources: For Spotify to stay on top of the market and for them to exist, they need great software developers to keep the platform up to date/
- Key Activities: They have to keep the record labels happy and continue to work through their music licensing deals.
- Key Partnerships: Record Labels and Artists. If they don’t have these partnerships, Spotify can’t exist in its current form.
- Cost Structure: To have great software talent, they’ll have to pay them top of the line salaries. Between talent, digital hosting, and licensing agreements, they have some cost of goods. Their cost of goods are just a bit more variable in some ways compared to a physical good product like the one above, Dollar Shave Club.
With those three business model canvas examples, I hope you can fill out your own business model canvas more effectively!
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