Business Model Canvas Example
Let's do one of these. I'm going to go over to the board over here. Oh, fancy, fancy! So who is my brave victim that wants me to business model out their business model canvas, their current thing? Lucky, you raised your hand, what do you got?
I'm in. I own a video marketing company.
Or a production company, just depending on who we're talking to. Three partners, creative out of 12.
Mostly videographers, editors, animators? Lighting people? Yeah?
Script writers, composers, yeah.
Got it. So your key partners are what? Those are the writers?
Yes, writers, editors.
And then we have motion graphics or animators.
I can go on and on.
Anything else? And you've probably got, you got about 10 different types of people you might bring into a production?
Okay, we'll just make a little arrow saying a whole bunch of other folks. Your key activities, do you want me to tell you?
Making ... W...
ell I would love to hear you tell me.
No, I think you're sharp. Come on, tell me a couple of key activities, I'll flash other ones out if you don't have it.
Okay. Key activities, we makes videos, they live online.
Making videos. Yup.
Yeah, and that's the number one activity. And then kind of from that we have sub content that can be used on social media. So it's also still photography, kind of video snippets.
So quote on quote, "micro content" that splits out?
Alright, so you got the making of the main piece, and then you've got micro content, good. Anything else?
Those are the two big ones.
Good. Key resources?
Can you remind me what that means?
We know that.
We need these people.
These are your, your partners are actually one of your key resources. What else? Do you guys have the need for editing base? And sound booths? No? It's lighter weight format?
No, the most important thing for us is servers to keep our work on and to keep past work on.
Yup. Hardware and software related to the activities.
Got it. Anything else?
Those are the main things.
Good. Value prop or many of them? What do you got? Why am I going to hire you instead of a thousand other video production companies?
Sure. Strong understanding of business. So really good at narrowing down.
Yes. I'm going to use that.
Excellent craft. So we make good, great videos.
Yup, I like that.
We think kind of full picture, so it's not just the video, but also the micro content that comes with it, and then the behind the scenes of-
So holistic content approach?
You're going to use that one too, or do you already use that?
Holistic content approach.
Approach, don't forget that.
And then the behind the scenes kind of nitty gritty that's important to us that they might not know about. So it's music licensing, making sure that they can use it any where they need to.
Ah yes, licensing expertise, I love that one. A lot of clients get frightened by that. Maybe you noticed that in your own business. Like we don't know where to get the music, we really want the music and we really wish that it was like, can we have Arcade Fire? And I had that question and we said yes. And we licensed Arcade Fire for a piece and I won't say what the price was, but when I showed them they're like, well, we said we wanted it and we want it. So now we got a great video piece with Arcade Fire as the background music. Got it, love the licensing expertise. Anything else? That's a lot of value props.
I'm going to leave it at that one.
Good, okay. How do you get these customer relationships?
Is a big one. Prospecting or kind of identifying and asking for introductions is another.
Proactive prospecting. Got it. What else?
That's it for now.
No content marketing?
That's the goal, 2016.
You are content producers. Okay, I think there's a gap. There's a gap in this canvas.
The vlog exists. Does it bring any clients? Still to be determined.
Got it, okay. Channels?
So channels would be things like where we post? So like Vimeo or places where I meet people in person?
No, channels would be where are you getting the business through?
Okay, so existing clients.
Yeah. Yup. Anything else?
Earned media. So anytime anything we do gets published it's usually local press, so we usually get some hits on the website and calls from that. And yeah, I think those are the two main ones.
Do you have enough business? Do you have enough workflow?
Okay. So I would encourage you to think about the channels. You may be missing a channel. You may not have agency partnerships. Do you have any?
Just started. Digital agency is kind of informal. Referral agreements, so those are very, very new. Still waiting.
And are these like 25 to 50 K projects typically?
Okay. I think the agency channel is so ripe for you. So if there was one channel. You got the current client thing down. You have the earned thing happens if it happens. And that's good, you may be able to juice that by doing better content marketing. But the agency piece is key because they, God, I don't even know. Someone has to have a number of how much money agencies spend every year on video content production out of house because many of them don't have that capability. Especially small digital agencies. Right? So I'd be looking at is there a segment that you don't realize is your customer segment, and it could be digital agencies that are less than 50 people. So the digital agencies that are less than 50 people, it's probably 10 engineers, 15 designers, could be another 15 project managers or something, and strategists, and then 10 other. It's the agency principals and the operations people, and there's no video production, there's no content production, it's not something that they've gotten big enough yet to do, and I saw that in our own business. So we didn't have in house content production really until about 18 months ago. So we were 65 people before we hired our first multi media content producers, and now there's about a 10 person team internally, right? So sub 15 and they're throwing off 25, 30, 40 K for every web build they're doing, because now we all know we need our background video and we need our teaser video, we need all that stuff. So I would be looking at this customer segment through that agency channel. You can just focus on that for the next year and be fine. Where are you based?
Chattanooga. So what I would be concerned about is are there not enough of them in that geography, so I would thinking about sort of mid Atlantic overall. So I would be trying to go after a big geographical area because there's probably-
Atlanta, Nashville, Knoxville, they're close.
There's tons in Atlanta, right? So Atlanta is a great place for you. Except Atlanta, now so this is why a business model canvas is interesting everybody. So once you determine, oh okay, better content marketing marketing and maybe agency channels, and we've determined that a new customer segment for us are actually digital agencies less than 50 people, or and Atlanta is near me, let me think about the Atlanta market. Okay fine, there may be a lot of good, small digital agencies that might need to add us on as a service, however, what's the problem with the Atlanta market from a content production point of view?
It's a big film town.
It's a big film town, so there's a lot of competition for you.
So this starts to help you see the strategy for penetrating this new customer segment. Okay, cool. So customer segments, digital agencies, might be the hottest new one for you, and then you've got, what is the typical client?
Lean marketing teams. So in house agencies, those are kind of coining themselves now, the branch strategists. They have a team somewhere between two, usually no more than 10.
And so they also have the infrastructure to support video. So they have the good website, social media is on point. They have a great email list.
Okay, so this is like a mid-sized company.
Not a startup?
Unless it's very well funded, usually not a startup.
Well funded startups, which happens to a certain degree in your market, but not as much as other markets, right? Which is, so again, using this canvas you can go, what are we going to focus on? We're probably not going to focus on the well-funded startups. There's only going to be a few of them in your geography. This is a much clearer, and if you were going to go after the well funded space, that's a different sort of data and newsfeed you have to pay attention to, so you start to get into like the funding announcements, and you're going to want to like just be focused on who's raising a series A or B or whatever that is, and it's just like a different game, whereas the digital agencies are preexisting, you know where they are. There's usually a big list of them, much easier to track down. Okay, cost structure, how's the cost structure look for you guys?
Three owners on salary, and an office in Chattanooga. You can get that for around 500 bucks a month, that's great.
There you go.
You don't even want to know what rent is. And then the other thing is the kind of various softwares that we have to have. You have great handwriting by the way.
No, this is the worst handwriting ever. Okay, and revenue streams. You've got custom content projects.
Custom content projects are the big thing right now. The thing we're trying to move over into now is retainer agreements and the right client. So that's the dream.
Have you done that yet?
We're pitching it actively.
So you would be retained to do ongoing micro content development for social channels, or what would it be?
It would be usually a package of let's say maybe a brand story and then kind of a subheading under that is maybe educational content. So every quarter they'll be doing three or four kind of topics and in the course of a year, maybe we'll push out about 100 pieces of micro content.
And why have you chosen that as the next big stream?
It's from wanting consistent income.
Well I get that.
It's not the answer I was hoping for.
Because that's your desire, not the clients. So I was hoping you were saying because our clients are clamoring for it every single day, they're knocking down our door saying can we please pay you every single month for this ongoing content work?
So if they're not doing that, that's kind of a problem. So I would want you to do what is essentially called clinical customer development, right? This is a classic term in the lean startup par lance, which is talk to a lot of people and ask them where are the gaps around the content production world that you're seeing that maybe we can be helpful with? My guess is it's not going to be that. They're going to say analytics. They're going to say, we don't really know what's performing well. We don't understand whether or not we should be doing more A, B split testing against all the micro content pieces or like how did all that work? And the reason why that's my intuition is because we see it in our own business in our analytics team just keeps growing as our content business keeps growing. So think about that. So rather than focusing on, and I think it's a good point for everybody watching online and for you especially Lucky, don't think about what it is that you want because of the money you want. You got to think about it in terms of what do the customers want, and do you actually want to meet that need? If the need is, we really want more content analytics and you guys are just not passionate about that, that's fine. Don't offer it. Because for all I know, your team are incredibly creative people, they just want to do creative content production work all day long, and they want to hand off the work and then never look at the more empirical data part of it. But you said you were strategy minded, I would assume that understanding of content performance would feed right back into your strategy mindedness, right?
Cool, great. That was, was that helpful? Did you guys see how that easy that was? It's not a rocket science necessarily. So you can do this at home. Download a template, print it out, and when you have a new idea, flush it out that way, or if you have friends that have businesses and you want to understand their business better, you can say hey, can I talk to you about your business? And I just want to see how this maps out? They'd probably be happy to do it.
Alright Peter, just two quick questions to wrap up the business model canvas before we move on. So this first one comes from Tracy, and Tracy wants to know, do you ever revisit the business model canvas as you grow to see if it's still relevant, and if you do, how do you know when is the right time to revisit it?
Well we just revisited it for Lucky, and now was the right time. I would say one of the tricks, I'll say it for me, I didn't know about the business model canvas when I started the company, so I didn't have the benefit of it, and therefor I didn't have the benefit of like rechecking it over time. I would say, if there's a point where revenue is no longer accelerating and you feel like you're plateauing, that would be the time, because then you can do what we just did here and say oh, am I focused on new revenue stream that is really me focused rather than market focused, rather than client focused? Or, when I'm running my customer segments, is there something obvious that I'm missing? And so in your own markets wherever you may be, if it's Stockholm, or if it's Atlanta or Chattanooga or New York, you can have your business model canvas and when you go to a meeting with one of those mentors that you may have reached out to. I get outreach all the time. And if someone came to me and said Peter, this is my canvas, what do you see? I would've seen what I saw for Lucky. I would say actually I think you're missing a customer segment, so it's a really good, it's like a cheat sheet, it's like the cliff's notes of a business so that when you're talking with someone that's going to help you, that process is I think more streamlined. Good question, appreciate that. Wanna do another one?
One last question from Alvara who says "If your company has been in the market for a few years, is it still valuable to do this business model canvas from scratch, or is it okay to kind of jump ahead to a certain part of it?" Like he specifically says, "Is it okay to just jump to the value proposition, if you already feel like you have a good sense of everything?"
Alvara, I'd encourage you to just fill the thing out, right? If you have a preexisting business, it shouldn't take you more than five minutes.
So like fill it out, use one color of ink for the preexisting business, so use black ink for that. And then get a red pen for the like future potential. Now mind you, I did say pen, like I don't actually do much writing. As you can see my handwriting is horrible. Put it in keynote or PowerPoint and then just use bullet points and use the different colors so you'll see our different scenarios for how you may want to change the preexisting business. I didn't include in this presentation like every single kind of decision making software that I use. There's another tool then that I'd recommend, it's called Mind Manager. It's a way to mind map. So if you're trying to figure out how to change the preexisting structure of your company, you can do that in the mind map. You can imagine you've got one bullet that's services, and there are four of them, and then you can associate revenue with each of them, and then you can do a scenario where it's like, well if we delete that service, meaning we don't offer it anymore and we add this service. What about the people? Do we have the right people still? Or do we not? And so you can do some scenario planning that way. So yeah, if you have a preexisting business just lay it out, might as well.