A comparison of the Business Model Canvas, the Lean Canvas and the Strategy Sketch
In 2008, Alex Osterwalder introduced the Business Model Canvas (BMC). Since then, many businesses have profited from the easy approach to 'describe, design, challenge, invent and pivot' their business model. What was novel back then, is the idea that you could sketch your strategy / business model on one single page, rather than writing an extensive business plan.
Since 2008, many variants of the business model have been introduced. In my consulting business, I use three variants: (1) The Strategy Sketch by Jeroen Kraaijenbrink, (2) the classical Business Model Canvas by Osterwalder and (3) the Lean Canvas by Ash Maurya. The Strategy Sketch has the widest scope, followed by the Business Model Canvas and then the Lean Canvas.
In this article I will discuss the highlights of each model, the differences between them and also when you should consider using a particular canvas. I will kick off with the Strategy Sketch, as it has the widest scope.
The three models
Strategy Sketch by Jeroen Kraaijenbrink
This canvas was first published in 2015 and is relatively unknown. However, I have used this canvas in a couple of workshops and I believe it to be a practical and elaborate canvas. It is used to describe the overall strategy of a business and includes the following steps in the next proposed order:
- Resources and competences: What you have available within your organization, what you are good at and what makes you unique. This is comparable to people and resources and key activities from the Business Model Canvas.
- Partners: Who you work with. Some partners make your products and services more valuable. With other partners, you may even develop services and products together. Comparable with strategic partners from the Business Model Canvas.
- Customers and needs: The organizations and people you serve and whose needs you want to meet. What exactly are those needs? This corresponds to customer segments in both the Business Model Canvas and Lean Canvas.
- competitors: Those with whom your customers compare you when they purchase your product or service or not. This element isn't part of the Business Model Canvas, but is part of the Environment Map defined by Osterwalder. In the Lean Canvas, this element falls under Unfair advantage.
- Value proposition: What products and services do you offer and what is the value for your customer? What does the customer achieve by using your product or service? How do you offer these products? This element is included in all models. Channels and customer relations from the Business Model Canvas could also be placed under this element. For the Lean Canvas this includes value proposition, solutions and channels.
- Revenue model: What you receive in return for delivering the products and services. From whom do you receive this, how and when? This element is included in both the Business Model Canvas and Lean Canvas.
- Risks and costs: What financial, social and other risks do you have and how do you deal with them? Costs are included in all models, but what is added in this model is the risk component. Kraaijenbrink:… 'a business model can look great if all the elements are filled in and well attuned to each other. However, risks are also very relevant, as they can make a certain business model considerably less attractive '.
- Values and goals: What you want, where you want to go and what you find important. This is an element that is not taken into account in both other canvases. However, mission and vision are decisive input for strategic objectives. Profit or shareholder value is not always the most important thing for organizations, there are often other objectives as well. For example, striving for sustainability can be a determining element of the strategy.
- Organizational climate: What is the organizational culture like? What is the organizational structure like? What are the distinguishing factors in it? This factor is not mentioned in the other canvases, but it does determine the strategy. The mindset of the staff, the structure and the culture is an important precondition for the implementation of the strategy.
- Trends and uncertainties: What is happening around the organization and what effect will this have in the short and long term? What uncertainties do you have to deal with? These are similar to the Environment map of Osterwalder.
More details can be found here http://thestrategyhandbook.com/
Business Model Canvas by Alex Osterwalder
Business Model Canvas
This canvas enables both new and existing businesses to determine the logic of business how to create, deliver and capture value. In the canvas we have also indicated with colors which elements are related to the desirability, feasibility or viability of the concept. It includes the following steps:
- Customer segments: Which customers do I serve and which 'activities' are carried out by my customers as part of my products or services? In the Value proposition canvas of Osterwalder the value proposition and customer segment is further explored. Customer segments can be found in all canvases.
- Value proposition: What is the value I offer the customer? What does the customer achieve by using your product or service? This is also part of the Value proposition Canvas. This element is reflected in all canvases.
- Channels: How can customers be reached? Is this personal, or digital, or via social media or… This element is also reflected in the Lean Canvas.
- Customer relations: What kind of customer relationship do I enter into with my customers. How can I gain and retain customers?
- Revenue streams: What are customers willing to pay and how? This is part of all canvases.
- Key resources: What resources (time, money, resources) am I using to create this value?
- Key activities: What should we do to deliver, what crucial activities should be done to create value?
- Key partners: Which partnerships are necessary / can be developed in order to create value? Also part of the Strategy Sketch.
- Cost structure: What are the costs resulting from this addition? Are these fixed, recurring costs? What are the variable costs? And what are the one-off costs?
Osterwalder argues that business models operate in a certain context. Therefore the following areas need to be mapped around your Business Model Canvas, and is called the Environment map:
Market Forces: Key customer issues in your arena, such as growing or shrinking segments; customer switching costs; changing jobs, pains, and gains; and more.
Key Trends : Key trends shaping your arena, such as technology innovations; regulatory constraints; social trends; and more.
Industry Forces: Key actors in your space, such as competitors; rising value chain actors; new or fading technology providers; and more.
Macroeconomic Forces: Macro trends, such as global market conditions; access to resources; high or low commodity prices; and more
More details can be found on:
Lean Canvas BY Ash Maurya
This canvas enables entrepreneurs and startups to quickly validate their business idea following the principles of lean startup. A canvas is made for each customer segment you have identified and validated. It includes the following steps in the next proposed order:
- Customer segments: This canvas is mainly focused on completely new propositions and startups. If you come up with a new proposition, it is useful to know where you can find the so-called early adopters. This group is part of the final, larger customer segment. We find this element in all canvases, but here it is a bit more specific.
- Problem: The focus in Lean Startup and this canvas is on solving problems that are really worthwhile. Here you describe the top 3 problems that the customer has to deal with and that you want to solve.
- Solution: This is how you want to deliver value. The solution is often what we all get excited about and work hard for. It is deliberately a small box that should only be filled in after the customer segments and their problems are known. With the other canvases, the solution falls under value proposition.
- Value proposition: The convincing plan or offer that solves the customer's problems. This element is part of all canvases.
- Revenue streams: The revenue model and pricing is part of the business model. This element is reflected in all canvases.
- Channels: Which channels do you use to get to the customer and reach them? To be compared with customer relations and channels from the Business Model Canvas.
- Measuring success: How are you going to measure whether you are successful? Which customer actions have value for you? This does not always have to be a financial metric. Determining the right metrics is important to make sure you don't make decisions based on irrelevant data.
- Costs: What are your fixed and variable costs and how do they compare to the standards you have set? Part of all canvases.
- Unfair advantage: What does your organization have to offer that cannot easily be copied by others? How do you arm yourself against competition? This part is also included in the Strategy outline among competitors.
More details can be found here:
Summary of differences & when to apply
What I hope has become clear, is that each canvas has its own value, and is focusing on different elements. Each canvas has a different purpose, audience, application and uses different steps in a different order. In the next visual overview I have indicated the similarities and differences. Starting with the BMC, I have added blue elements to the Lean Canvas and red elements to the Strategy Sketch.
In the next table I have summarized these factors.
The value of business model canvasses was and still is today, that they allow you to cut to the chase and quickly identify the key points in your strategy or new business model. From that point on you can iterate to a better strategy or business model improving your chances of success considerably.
It is sometimes wise to have someone facilitate the discussion and helps you set up your business model. We can help.
All canvases can be downloaded free of charge on our site: downloads