I hope you've had a lovely two weeks, not too warm (as I write this message, it's 37 degrees here 🥵), and you're recharged and ready for the "back to school" phase.
This week, as an Innosuisse expert (reviewing funding programs for the federal agency of innovation), I attended the Innosuisse plenary at EPFL (Ecole Polytechnique de Lausanne). Together with coaches and other experts, we shared a common observation: many teams lack a robust business strategy.
This is fundamental. And to nail down these basics, a simple yet powerful tool exists: the Business Model Canvas (BMC).
Today, we'll explore this canvas. I'll introduce you to my adapted version tailored for healthcare and sustainability projects, explain why I'm so passionate about it, and guide you on how to utilize it in your job while avoiding common pitfalls. (And afterward, I go for a swim 🌊).
Get comfortable for your 5 minutes of sparks to hack.
✏ The original BMC
The BMC is a tool designed by Alexander Osterwalder (CEO of Strategyzer) during his PhD work supervised by Yves Pigneur. The book, Business model generation, was published in 2010.
This has been a core innovation tool since I was trained by Alex (Osterwalder) in 2015.
✏ Why did I design a new version for healthcare and sustainability projects?
Over time, I saw that the complexity of healthcare could greatly benefit from a tailored version of this canvas. So when I founded Bambooster in 2018, I designed the 3C BMC (after many iterations 😜). The "3C" signifies a business model that must add value to three distinct customers simultaneously: the user (1) + the decision maker (2) + the buyer (budget holder 3).
In healthcare, you have the patient (1) + physician (2) + private insurance (3) or physician (1), hospital CEO (2) + ministry of health (3). In sustainability, you have citizen (1) + NGO (2) + foundations (3).
✏ the 10 building blocks
Unique value proposition: The value you create for your customers (For different customers, different value propositions!)
e.g. we bring peace of mind, save time, reduce economic burden,
Users: people (in a B2C - Business to Consumer model) and/or a role within an organizations (in a B2B - Business to Business model) that will use the product or service (the end-users) and benefit from it.
e.g. employee, kids or parents, patient, a pharmacist in a public hospital,
Who decides and influences: The most critical stakeholder who authorizes, administers and ensures availability, maintenance, orders (except the one with purchasing power) or recycle your product or service. This is your 2nd Customer
e.g. Government, EMA, FDA, Physician associations, IT director...
Channels: How will you reach out to your customers? (all the customer touchpoints) : either to acquire customers or to deliver your services (awareness, purchase, delivery, after-sales).
e.g. Field-based people, online events, emailing, wholesalers, online platforms,
Key Resources: What you need to HAVE to develop, deliver and capture the value of your solution: think of nouns both in the physical and digital world.
e.g. skilled team members, facilities, patent, server, algorithms,
Key Activities: What you need to DO to develop, deliver and capture the value of your solution: think of verbs
e.g. product research & development, sales, marketing and advertising,
Strategic Partners: Organizations and companies that are critical to creating, delivering or capturing value
e.g. Manufacturer, telehealth platform, mobile telecom provider, distribution partners in remote areas,
Cost Structure: Fixed costs, independent of the sales (e.g. facilities, employees’ salaries) and variable costs (related to the activities, resources and partnerships)
Who will pay: Who has purchasing power? Who will support the cost? This is your 3rd Customer
e.g. government, insurer, families. In healthcare : out-of-pocket patient, national payer via reimbursement,
Impact and Revenue Streams: How will you make money? What is your pricing strategy? (A fixed price or dynamic pricing for example outcome-based pricing)? What is your revenue stream: transaction revenues (one-time customer payments) or recurring revenue?
e.g. Subscription, freemium or pay-per-use.
If you are a social entrepreneurship startup (social, cultural, or environmental impacts): who will benefit from your intervention, and what is the value for them? How will you show that you are creating a social impact?
So, did you find what I changed vs the original canvas? (You can win Swiss chocolate 🍫). I removed customer relationships, renamed "customers" to users and added 2 other customers: budget holder and influencer.
✏ What is the benefit vs the original BMC
Better value proposition for each customer: You don't design only for the end users, but you have a holistic view of your 3C. You need to craft the 3 value propositions (one for each customer).
Clearer financial discussion as you clarify what pays the user (often 0€) versus the budget holder. It also triggers the discussion on the go-to-market strategy like out-of-pocket launch (for ex a digital app paid by the patient ) and then a reimbursement set up (paid by the budget holder once more data are available).
Channel design improved: You see the different acquisition channels needed for each 3C. Who in your organisation will be in charge of each channel becomes obvious (for ex for budget holders maybe Key Account manager vs for physician medical field-based team or new service system partner..)
Here are the 3 reasons why I think you should use it and a checklist of the 5 main errors to avoid.
✏ 3 reasons and use cases for you
Make complexity simple
By putting every aspect of the problem on a single canvas, you and your teams can collaborate effectively with a comprehensive approach. You can quickly modify and update the canvas, enabling continuous improvement of your solution. So you reduce complexity by forcing simplicity (you can't write 200 PowerPoint slides on your canvas - sounds familiar 🙈?)
Without a clear strategy framework, you go nowhere like this small pink arrow. You need a structured strategy to align your team toward a common goal. For me the business model canvas is the best tool to make this happen (way better than SWOT 🤮).
See where you are investing resources to manage your portfolio better:
Use the 3C BMC as a portfolio mapping tool to systematically map ongoing projects and resources at local, regional and global levels.
Using a standardized approach, you can gain better insight into the maturity and potential ROI of current products and services, and make more informed decisions about where to focus your resources.
✏ My top 3 errors when you design your 3 C BMC
Collaboration: if the business model represents a service to be delivered by 2 companies (eg a startup and big pharma) teams tend to design only the part of the service they will be in charge of.
Instead, fill your business model canvas assuming it will be only one company. Then when it is clear, it is time to define who will do what.
Multiples customers: different users will have different needs, always. For example, a platform connecting patients and general practitioners.
You need to have a value (what is it for them) for each user.
The activities and resources are NOT your to-do list: They are NOT the steps to get on the market (e.g get a grant, test a MVP, recruit a designer).
They are the activities and resources you must have once your product is on the market to create, deliver and capture value.
I already shared in a previous newsletter why mastering Business models (with this canvas, of course) will promote an ecosystem mindset and help you succeed faster. This is here. Maybe your next read 😉?
Now is the time for me to go for a swim 🥵. I and to give me a feedback on this newsletter content 🙏.
Hit reply to let me know if you liked this edition or if you tried these tips. I respond to every person who writes to me!
See you in two weeks. Keep the spark alive, and be intentional :)