Enterprise Business Model Canvas for non-product teams

After coaching hundreds of startup teams and over 300 Intuit Enterprise Lean Startup teams I have come to really appreciate the simplicity and power of Alexander Osterwalder’s Business Model Canvas.  I find that many internal product teams (IT, HR, Finance, etc.) tend to have difficulty translating the business model canvas for their internal products and services.   Historically these teams tend to think in terms of projects and not products and customers.

Business Model Canvas

Fortunately, Alexander’s work is very solid and translates really well with a few simple tweaks to how you view the 9 boxes on the canvas.  Simply asking yourself a handful of different questions can quickly help you increase your ability to communicate the importance of your new product or service to senior leadership in your enterprise.


Customer Segments

In my experience, this tends to be one of the harder boxes for teams to get their heads wrapped around.   I would suggest that you start by applying Brant Cooper & Patrick Vlaskovits’ persona work from Lean Entrepreneur to create a persona of your most likely early adopter.  Who is the one person that will tear the solution out of your hand fastest?  

Unfortunately, many internal teams tend to think that “every employee” will be their customer.  While in some situations it may be true, you should really push yourself to identify who will benefit from it most.  Once you begin hitting a wall with narrowing in on your customer, I would suggest that you swap to using anti-segments.  Who looks like your perfect customer, but will actually be a terrible customer?  Maybe they will require tons of additional support or hand-holding.   Applying this anti-segment lens should also help you focus and find a starting point for your product.

In some situations teams have a product or service where their customer base is quite small.  Maybe it only serves a department or two in their company.   In this case it becomes fairly straightforward to create the initial customer persona, but it will be important to make sure there aren’t other customers in corners of the enterprise that are not on your radar.  This tends to happen with teams that are setup in a highly distributed and cross-functional organization.

For example, an enterprise where there is a central IT organization and each business unit also has IT teams.   Frequently, similar solutions are being implemented across business units with the left hand not talking to the right.

Another area to focus on during this exercise is to think about influencers, approvers, and corporate anti-bodies that you will need to work with to make this product or service successful.  Steve Blank has documented this really well in The Startup Owner’s Manual.  He goes into detail about how to think through all of these different customer types and how they apply in this context.  You’ll need to work with all of them so you might as well spend some time making sure you understand how deep the pool is before you jump in head first.

 

Value Propositions

You’ve probably heard this a million times, but you need to think about your Minimum Viable Product.  Not cheap, not fast, not crappy.  Minimum!   Which are the minimum features you’ll need to be able to satisfy the problems that your customers have?

Be sure to document in very specific terms what the solution will be.  Will it be a web site, a mobile application, a new IVR application?  This is important as you’ll need to be sure your entire team is aligned on what the solution looks like from a very early stage.

This is another area where you can leverage The Lean Entrepreneur.  The value stream exercise Patrick & Brant outline in the book works wonders for helping to identify the MVP for this product or solution.  For those of us that utilize the Net Promoter paradigm, the exercise will also help you think through what your customer actually expects so you can then go above their expectations and possibly have them promote your product to their colleagues.   This is just as valuable for internal teams as it is for regular product teams.  Don’t underestimate the power of having colleagues talk positively about the product / service you delivered.


Customer Relationships

This box is one that is frequently overlooked by internal teams as they don’t tend to have marketing backgrounds or focus.  Regardless, it is of paramount importance as overlooking this can put you in the position of trying to justify the existence of this product or service later on down the road!

Many large organizations tend to default to the use of positional power to roll out new products and services.   The “Use this because we told you to” syndrome is all too often prevalent and the default marketing tactic.  How can you implement this solution without the use of positional power?  Have you interacted with your customers enough to know if this new product or service will confuse them?  Will they simply stop using the old one?  What does the change management journey look like?

 

Channels

How does your customer expect you to deliver / distribute the value proposition to them? Think about alternative ways that you can deliver your value proposition (aside from what’s typical).  I’ve seen teams that have taken pages from Apple and begun offering computer help desk services in the cafeteria and the employees LOVED it.  This is a great example of exploring alternative distribution channels.  Instead of waiting for the help desk tickets to come to them, the employees went out to their customers.


Revenue Streams

All too often employees default to skipping this extremely important box on the canvas.  They say things like “We’re not going to be charging other employees to use this software”.  By simply asking yourself:  What is the positive business impact of this project?  You can set yourself up for success with upper management.  When you come to them with a clear understanding of the positive impacts you’ll create for the business it makes the conversation so much easier.   If this new solution creates more efficiency, saves time or increases customer satisfaction, how do those benefits translate to the bottom line?

Remember, everything you place on the canvas is nothing more than an educated guess.  You’ll need to test each of these hypotheses and identifying key business metrics you’re trying to move with this product / service will keep you and your team honest.   Killing a product / service that’s not up to snuff can be just as valuable as implementing one that’s successful.


Key Activities

The key activities tend to be projects you’ll need to execute as well as ongoing activities after implementation.  What additional work will your team be taking on as a result of this new solution?

 

Key Resources

Which resources do you need (people, systems, platforms, etc) from inside or outside your enterprise?  Will these be temporary resources or permanent?   How can you prove the Revenue Streams box and use that to convince these other teams that they should move your project up in their queue?


Key Partners

What will you need from other teams?  If they are also delivering for the same customer then they will be partners, otherwise they will probably be key resources.

 

Cost Structure

This final box on the business model canvas will help you to think through how to begin answering questions from your management teams like “What is the ROI on this new product or service?”  Once you answer how much this will cost, how many man hours might be invested, etc. you’ll contrast that with the values you’ve identified in the Revenue Streams to identify a rough ROI.  Again, you’re taking an educated guess and need to prove these out.

Once you have the initial costs documented, you should start to think about the ongoing costs and resources needed to support this product / service.  For example, a gas station could offer to clean windows, check oil, fill tires, etc while a customer fills up.  The cost in providing these services could make the business unprofitable.   As an internal team you should think through the total time it takes to perform a task or the total number of hours as good metrics to use to measure the cost structure and support the offering.

 


As you can see, utilizing the business model canvas inside the enterprise is actually fairly straightforward and can give intrapreneurs some very powerful ways to communicate with your management team as well as track your progress toward a new product or service that is delightful to your customers.

I’d love to hear how you’re able to apply this in your organization in the comments below!

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2012 Year in Review – Lean Startup Enterprise and Family

For me, I think this year should be dubbed “The Year of Lean Startup and family”. I tried my best to strike a balance between 34 trips and spending quality time with my family and friends. All things considered it was an incredible year for Maria, Miranda and I. My only wish is that 2012 did not include unexpectedly losing my mom to liver cancer.

In December of 2011, I moved from Intuit’s IT department into HR as a product manager for the Personal Growth and Development team. At that point I was armed with a basic set of product management skills, the right mindset and a few extremely smart and insightful mentors. Through my journey this year, I can honestly say I feel extremely confident as a product manager and look forward to being able to continue to move up the ranks quickly.

I believe this confidence comes primarily from my application of Lean Startup practices both inside and outside Intuit. In January I was asked to provide a “Tech Talk” inside Intuit for our development community. The goal was to give a high level overview of Lean Startup and how it applied Inside

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Intuit. At that point Eric Reis was starting to do quite a bit of speaking for Intuit and many employees were still not making the connection between these “startup” ideas and how they apply inside of a multi-billion dollar enterprise like Intuit. The tech talk went great and it made me realize that there was a big opportunity in helping others to apply these concepts.

With that realization, I started investigating the possibility of having an event called Lean Startup Machine (LSM) come to Tucson for Intuit. Having been to the event myself about a year prior I knew it was an extremely high impact event. Through the founder I learned that someone else from Intuit was trying to bring them to San Diego. He was a fellow Innovation Catalyst named Ben Blank. We quickly decided to pilot our own version of the event with a few teams to see if we could create value for Intuit before deciding to pay $60k for LSM.

We had a total of 5 teams for our first Lean StartIN (Lean Startup in the Enterprise) event in San Diego. We were fortunate enough to be able to get Eric Reis to help us kick off the event via skype and Brant Cooper came in person. It was a huge success and the teams were thoroughly excited after the 2 days were over. Ben and I quickly jumped to run a second event in Mountain View.

This event had a total of 12 teams crammed into a small room (high energy!). We were able to get our CEO, Brad Smith and Luxr’s Janice Frasier to participate as judges for the event. Again, the teams accomplished more in 2 days that most Intuit teams accomplish in months! We knew we were on to something big.

After these two energizing events, Ben came up with the crazy idea to do a Lean StartIN World Tour! We would conduct 10 Lean StartIN events across 10 different Intuit sites over the course of 10 weeks. This would allow us to train 100 Intuit teams on Lean Startup and Rapid Experimentation. In early June we ran an updated and improved “pilot” event in Menlo Park just prior to the world tour.

This insane world tour significantly contributed to the 53,906 miles I travelled this year across 3 different countries. In addition to creating a bunch of great intrapreneur driven startups for Intuit, Ben and I learned a ton about the cultural differences between sites at Intuit, ways to effectively coach teams and get them out of the building QUICKLY!

As the article title notes, I tried my best this year to balance my busy work schedule with family time. Historically, I haven’t been very good at this and it seems like something that I’m constantly putting on my New Year’s resolution list. I did a decent job of balancing things this year, but due to the loss of my mom in September I had a little over a month of almost pure family time.

To support my brother, sister and I during the passing of my mom, my dad came out from Thailand for about 6 weeks. It was really incredible to have him around through all of that. He helped with anything and everything he could. I’m not sure that we could have made it through her passing, celebration of life and 2nd funeral (my great aunt decided to put on) without all of his love and support.

I don’t feel like I’m ready to write about the experience of losing my mom, but I can say that it has completely changed my outlook on life. I have actually started including family time in my schedule to ensure that it always happens. I’m intentionally trying to get work that allows me to travel to places on my bucket list. I’ve tried Karaoke and am trying to say yes to anything new that I haven’t attempted before. It seems like such a waste to say things like “I don’t do that” or “That’s not me”. It’s really as simple as saying “yes” and giving things a try.

I think this is best represented in what has happened this year at Gangplank Tucson. We successfully ran 2 Lean Launchpad events for a total of 17 different teams. The first class was quickly pulled together through a grass roots effort in the community in just under 2 weeks. If you’d like to know more, you can read about my lessons learned from putting that class together. Another project for Gangplank is to get our collaborative working space moved downtown. To support this effort I’ve been puttting together stories from our lean launchpad teams about what they have applied after the class and how it has changed their outlook on business. It is absolutely amazing to read some of those quotes.

My adventures this year with Intuit and Gangplank have opened my eyes to a skill that I didn’t realize I had. I have learned that I am a pretty good Lean Startup and Innovation coach. For anyone out there that wants to become an expert in something I would suggest you get a couple books, go get some practice and then start teaching others. This process worked incredibly for me over the last few years. I effectively immersed myself in Lean Startup coaching by teaching 300+ teams for Intuit, and 50+ teams outside Intuit this year.

Now that I’ve taken the time to look back I am amazed at how incredible 2012 was for us. There is absoultely no way I could have accomplished all of this without the help of my super-wife Maria and well behaved daughter Miranda, and hordes of smart people at Intuit, Gangplank, Startup Weekend and Lean Entrepreneur.

THANK YOU ALL for an incredible year, let’s rock 2013!

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Gangplank Tucson: Lean Launchpad – Lessons Learned

On May 12, 2012 Gangplank Tucson kicked off our first Lean Launchpad course. It was modeled after the course that Steve Blank has been teaching at Stanford and other schools. The goal is to help teach entrepreneurs how to use customer development to search for a business model that they can ultimately scale. The course is intended to be extremely fast paced and requires a large investment from the student teams.

For this first pilot course our intention was to jump in, execute and learn from it rather than planning like crazy and trying to get it “right”. Because of that we pulled together 5 teams and 5 mentors. The mentors were chosen based on availability and were not assigned to a single team.

Each week we would begin by reviewing the selected reading from The Startup Owner’s Manual and Business Model Generation books. Next, we would proceed to review the associated slides from Steve Blank’s slide share. Last, we would pair each team up with a mentor to help the teams determine what they should be testing for the next week.

After eleven weeks we had two teams that really stood out. The first team was Forward Intel which started the class with the belief that they would provide a suite of big data software and services. By the end of the course they had narrowed to a very specific problem of providing actionable recommendations to marketing firms based on their web, social and related data.

The second team was Verb Club who were designing a mobile route application specifically for climbers. Due to the fact that details about routes change constantly due to weather it is extremely important for climbers to have current information. The app would primarily be supported by advertising.

All in all the course had a great impact and we will definitely be running more of them very soon.

Lessons Learned

  • There is a huge need for this type of education in Tucson as we have lots of entrepreneurs starting new businesses, but no education that focuses on this first phase of business building.
  • Some entrepreneurs have a STRONG reality distortion field. We saw one of the teams which absolutely believed that their vision was reality. They focused completely on web data and refused to get out of the building and learn from their customers one-on-one.
  • There are lots of great coaches & mentors willing to help entrepreneurs in Tucson. I was amazed at the willingness of all of the mentors to jump in and spend their personal time coaching teams for free. Thank you all for paying it forward.
  • It is important to match mentors to teams as it increases accountability for both the teams and the mentor. Additionally I believe it will be important to match based on the industries of both.

Thanks to everyone who helped make this first course a success!!

 

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