Business Model

An organization’s business model can be defined by nine basic building blocks. These are provided by the business model canvas below.

These are: (1) Customer Segments, (2) Value Propositions, (3) Channels to Reach Customers, (4) Customer Relationships, (5) Revenue Streams, (6) Key Resources, (7) Key Activities, (8) Key Partnerships, and (9) the Cost Structure.

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Each of these elements play a role in a startup, and it’s absolutely imperative to define them before rushing into anything. What you want to do is print out the model in order to organize your thoughts.

The customer segments includes simple users and paying customers. For each segment you have a value proposition which means your products. You channels are your sources for those products. Customer relationships determines how strong your bond is with customers. The revenue stream clarify your pricing mechanisms are. Then your key resources show your indispensable assets.

Your key activities show which are the necessary things you need to perform well. Your key partnerships are the people who will help you build your company. No man is an island after all. After understanding everything, you have to tackle the cost structure.