The Business Model Canvas was developed by Alex Osterwalder starting in 2005. It effectively summarizes an entire business into nine elements. The Business Model Canvas has become an essential element for entrepreneurs following the Lean Startup methodology.

When you look at the canvas, there’s an obvious break between the top section (business decisions) and the bottom section (the financial impact). Less obviously, the canvas can be broken in half left and right. At the center is the “Value Proposition” and this truly is the core of the business model. We like to call the right half, the “Front End” of the business model, and it represents the decisions made in order to bring that value proposition to market. The left half, or the “Back End” of the business model, represents all the decisions that enable the business to successfully deliver that value proposition to the target customers. Successful execution of the Front End results in the Revenue Streams. Successful execution of the Back End requires investment represented here by the Cost Structure.

Watch a tutorial here on how to use the Business Model Canvas.

Tools for creating a Business Model Canvas coming soon!