Book review: “Business Model Generation”

Normally I tend to be quite careful with business books; quite a lot of them seem to be quite over-hyped and need a lot of pages to illustrate one single theme. I felt that “Business Model Generation” by Alexander Osterwalder and Yves Pigneur is different though. The book is all about using a business model canvas to work out (or improve) the business model of an organisation. Forget about doing lengthy strategic documents or   even boring SWOT analysis, filling a business model canvas with lots of colourful post-its and arrows is the way to go, if you ask me.

The main underlying premise of the business model canvas is around 9 building blocks that “allow you to design every possible business model that you can imagine.” Good examples of these building blocks are “customer segments”, “revenue streams” and “key activities”. I can imagine that these might sound very obvious in their own right, but the way in which the business model canvas combines these blocks makes it a very compelling tool in my opinion:

  1. A good, comprehensive way of looking at a business model  I am sure that there are thousands of business books out there that talk about things like “cost structure” or “key resources”, but I believe the business model canvas is very effective in bringing all these elements together in a very visual and comprehensive kind of way.
  2. Unpicking things – I feel that the visual way in which the business model canvas lays out the different building blocks really helps businesses in ‘unbundling’ their models (“what kind of business type are we?”) or with figuring their key value proposition or revenue drivers.
  3. Easy to share and communicate – What I like most about is that one can create a number of collaborative workshops or exercises around the business model canvas. For instance, you could get a multi-disciplined group of employees in a room to brainstorm about different customer scenarios or market opportunities and figure how to best design the business model accordingly.

Main learning point: books like “Business Model Generation” really help in making thinking about business model design a lot more accessible and practical. The main premise of the book, using a visual approach to designing a business model, is as simple as it is effective. The real-life examples of businesses that have successfully used this approach are relevant and illustrate the different purposes for which the business model canvas can be used. Alexander Osterwalder and Yves Pigneur have truly created a book (and an approach) that enables companies to start with a blank canvas and make it their own!

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