The LINEAR Business Model Canvas for Business Investors, Mentors, and Startups

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THE LINEAR BUSINESS MODEL CANVAS
FOR BUSINESS INVESTORS, MENTORS, AND STARTUPS
How to Deeply Understand and Manage
Performance Improvement, Business Model Innovation, and Shared Value

Rod King, Ph.D.

Copyright 2012. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
“Visually Organize and Manage the World’s Systems, Projects, and Trends”

For People
Who Are Looking For
Simpler, More Powerful, and Versatile Tools
To
Manage
Performance Improvement,
Business Model Innovation, and
Shared Value

The Business Model Canvas
Was Created by Alexander Osterwalder and
Is Basically
A Visually Structured Dashboard (“Canvas”) For
Documenting Information About
The Building Blocks of a Business Model
Or
The Elements of a Business Ecosystem


A Business Model
Is
A Visual Representation, Story Plot, or
Dynamic Simulation of a Living Organization That
Viably Pursues and Achieves
A Hierarchy of Goals Especially of
Increasing the Number of Profitable Customers &
Delivering Greater Value in the Ecosystem


9 Topics and Layout of
The Non‐Linear Business Model Canvas

Source: Hhttp://en.wikipedia.org/wiki/Business_Model_Canvas


From a Kinesthetic Perspective,
Creating the Linear Business Model Canvas
Involves
“Flattening”
Or
“Thinking Out of the Box” of
The Non‐Linear Business Model Canvas


The Linear Business Model Canvas
Is Essentially
A Chain of the 9 Topics on The Business Model Canvas:
KP KR KA VP CH CR CS R$ C$
Cause Effect (Result)

On the Linear Business Model Canvas,
The 9 Topics Are Arranged in
A Linear Sequence That Reflects
The Cause‐and‐Effect Chain of an Ecosystem:
Input‐Processing‐Output‐Feedback‐Environment‐Result (IPOFER)


A Unique Characteristic of
Is
Generalization of the Topics of
“Revenue Streams” and “Cost Structure.”

“Revenue Streams” has an extended description
of “Delight”

“Cost Structure” is now described under “Pain”


The Inclusion of “Delight” and “Pain”
In
the Linear Business Model Canvas Allows
Value to Be Defined
As the Ratio of Delight to Pain
(Instead of Just As Profit or the Ratio of Revenue to Cost).

Also, the Above Description of Value
Means That the Linear Business Model Canvas
Can Be Applied to All Types of Projects.


Ideally,
The Maximization of Value
                            Involves … 9 Archetypal Business Models

High
DELIGHT (+):
1 2 3

Revenue; 4 5 6
Differentiation;

Quality
Low 7 8 9

Low High
PAIN (‐):

o Maximization of Delight: Revenue (Streams);
Cost

  Performance;  Functionality; Quality; Reliability; Brand/Image/Reputation;
  Differentiation; Customization/Personalization

o Minimization of Pain: Cost (Structure); Size; Weight; Waste; Defects; Complexity;
Inaccessibility; Inconvenience; Time (Delay); Obstacles/Barriers/Problems; Risks
Key                                 BLUE OCEAN                 SWEET SPOT                   LUXURY SPOT                   DISRUPTION (LEAN) SPOT
1 2 3 4
Profitable
Business Models

The Linear Business Model Canvas: An Outline of 9 Topics
KP
Key Partnerships (Partners/Alliances/Complementors)
KR
Key Resources (Supplies/Inputs/Employees/Machinery/Tool)
KA
Key Activities (Process/Strategy/Business Job‐To‐Be‐Done)
VP
Value Proposition (Product/Service)

CH Channels (Distribution)

CR Customer Relationships (Engagement/Acquisition/Retention)

CS Customer Segments (Problems/Needs/Job‐To‐Be‐Done)

R$ Revenue Streams (Delight: +)
(Value = Delight/Pain)

C$ Cost Structure (Pain: ‐)


NOW, YOU CAN
INSTANTLY AND COLLABORATIVELY USE
THE LINEAR BUSINESS MODEL CANVAS
FOR PROJECTS
ANYWHERE AND EVERYWHERE:
No Special Graphic Layout or Canvas
Is
Required


THE MINIMUM LINEAR BUSINESS MODEL CANVAS
IS ENTIRELY TEXT‐BASED.
This Linear Business Model Canvas
Does Not Need
Any Special or Dedicated Software


THE MINIMUM LINEAR BUSINESS MODEL CANVAS
REQUIRES ONLY PEN AND BLANK PAPER
OR
BASIC TEXT‐EDITING (WORD PROCESING) SOFTWARE


Background on

Rod King Created the Linear Business Model Canvas as
A “Minimum Viable Product (MVP)”
of the Business Model Canvas
Which Was Created By Alexander Osterwalder and
Featured in the Book,
“Business Model Generation.”


Main Purpose of

Focuses on Ubiquitously
Achieving Performance Improvement and
Business Model Innovation
In
Simpler, Faster, and “Funner” Ways


Universality of

Can Also Be Regarded As One of Many Systems
[“Minimum Viable Interfaces,” Dashboards, or Objects]
For Portrayal on the Visual Platform of
The Disruptor’s Arrow of Time
Which Integrates All Tools in Strategic Management


Advantages of The Linear Business Model Canvas

  Elimination of Complex Graphic Layout (Canvas): Easier to Read Linear Format
  Simplicity in Form and Structure; Infinitely Long (“DNA” Fractal) Format
  Intuitive Linear Logic That is Applicable to All Systems: Living and Non‐living
  Faster Learning and Easier Application; Easier Customization and Extension
  Direct Linkage to Existing Tools of Business/Strategic Planning,  Performance
  Management, Total Quality Management, Business Process Improvement,
  Product Innovation, Inventive Problem Solving, and Portfolio Management
  Collaborative Development of Strategy (Blue Ocean Strategy) and Scenarios
  Easier Development, Update, and Tracking of Business Model Plan/Dashboard
  Diversified and Novel Linear Layouts for Topics of the Business Model Canvas
  Facilitates Comparative Analysis, Benchmarking, and Pattern Identification
  Can Easily Be Presented as a Game in Many Formats; Facilitates Gamification
  Outline of Topics Can Easily Be Converted to a Report for a Business Model Plan


Logic of Sequence on The Linear Business Model Canvas
KP
Key Partnerships (Supply/
Upstream
Left Brain ‐ Evaluate
Key Resources Input)
E
KR
HOW?
SUPPLY INFRASTRUCTURE
[D]esign (Inside the Enterprise) C
KA
Key Activities (Processing)
‐ Input/Processing/Output (System) O
VP
Value Proposition (Product)
Product‐Market Fitness S
(Feedback)
Y
CH Channels (Distribution) Midstream Right Brain ‐ Explore
WHAT? S
CR Customer Relationships DEMAND INFRASTRUCTURE
[N]eeds (Outside the Enterprise)
T
CS Customer Segments ‐ Local Environment

E
Downstream
Total Brain ‐ Envision
R$ Revenue Streams (Delight) WHY? M
SHARED VALUE
[A]spirations

C$ Cost Structure (Pain)

(= Delight/Pain)
‐ Result (Effect)


The Usefulness, Areas of Application, and Power
Of
The Linear Business Model Canvas Are
Exponentially Increased
When the Linear Business Model Canvas
Is Presented on


Disruptor’s Arrow of Time (DAT): ………………………………………….……………………………….. Client/Customer: ………………………………….……

Objective: ……………………………………………………………………………………………………………………………. Date: ………………………………….……

PRESENT SYSTEM VALUE DISRUPTION STRATEGY – FUTURE SYSTEM
(Where currently are we?) Evolve, Plan, or Disrupt: E.R.I.C. (Where must we go?)
(Eliminate/Reduce/Increase/Create) Short/Medium/Long‐term

DREAM/
VISION/
Ideal
Final
Result
(IFR):
Value
(+/‐)

CONSTRAINTS (What are constraints/obstacles/barriers/problems that prevent full realization of future system/vision/dream/IFR)?


Linear BMC‐Arrow of Time (LBMC‐AT): …………………………..…………………………………….. Client/Customer: ………………………………….……

Objective: Business Model Documentation, Improvement, Innovation, and Presentation Date:  ………………………………….……

PRESENT SYSTEM – VALUE DISRUPTION STRATEGY – FUTURE SYSTEM –
Linear Business Model Canvas (LBMC) Evolve, Plan, or Disrupt: E.R.I.C. Linear Business Model Canvas (LBMC)
KP – Key Partners KP

KR – Key Resources
KR

KA – Key Activities
KA

DREAM/
VP – Value Proposition VP
VISION/

Ideal
CH – Channels CH
Final

Result
CR – Customer Relationships CR
(IFR):

CS – Customer Segments Value
CS (+/‐)

R$ – Revenue  Streams (Delight: +) R$

C$ – Cost  Structure (Pain: ‐) C$



Linear BMC‐Arrow of Time (LBMC‐AT) for “Business Model Generation” Project         Client/Customer: ………………………………….……


PRESENT SYSTEM – 2008 VALUE DISRUPTION STRATEGY – FUTURE SYSTEM – 2009
Linear Business Model Canvas (LBMC) Evolve, Plan, or Disrupt: E.R.I.C. Linear Business Model Canvas (LBMC)
For Traditional Book Authors/Publishers (Eliminate/Reduce/Increase/Create) For “Business Model Generation” Project
KP – Key Partners Eliminate Publishers KP The Movement (Design); Ning Platform;
Publishers Amazon.com; 3rd Party Logistics Company
KR – Key Resources Blog and Visibility on the Web; Business
KR
Model Hub; Powerful Methodology
KA – Key Activities Eliminate Logistics &  Shipping Content Production; Hub Management;
Logistics & Shipping KA Guerilla Marketing and Word‐of‐Mouth
VP – Value Proposition Visual, Practical, and Beautiful Handbook; DREAM/
VP
Co‐creation; Personalized Book VISION/
CH – Channels Eliminate Intermediation Hub Members; Word‐of‐Mouth; Amazon. Ideal
CH
Intermediation Through Publishers Through Publishers com; BusinessModelHub.com; Book Stores Final
CR – Customer Relationships CR Businessmodelhub.com; Result
Business Model Event (Amsterdam) (IFR):
CS – Customer Segments CS Visionaries, Game Changers, and Challeng‐ Value
ers; Entrepreneurs, Execs, etc.; Companies (+/‐)
R$ – Revenue Streams (Delight: +) R$ Hub Membership Fees; Advance & Post‐
publication Sales; Giveaways; Royalties; etc.
C$ – Cost Structure (Pain: ‐) C$ Design; Content Production; Printing;
Distribution


Reference: Osterwalder, A.; Pigneur, Y. (2009) Business Model Generation. Amsterdam: Modderman Drukwerk.


BME‐Arrow of Time (BME‐AT): …………………………..………………………………………………….. Client/Customer: ………………………………….……

Objective: Industry and Environmental Analysis; Competitive Advantage   Date:  ……………………………….……

PRESENT SYSTEM – VALUE DISRUPTION STRATEGY – FUTURE SYSTEM –  Short/Medium/Long‐term
Business Model Environment (LBME) Evolve, Plan, or Disrupt: E.R.I.C. Business Model Environment  (LBME)
Global Environment (Eliminate/Reduce/Increase/Create) Global Environment

INDUSTRY FORCES

DREAM/
MARKET FORCES VISION/
Ideal

Final

Result
MACRO‐ECONOMIC FORCES
(IFR):

Value

(+/‐)

PESTLIED FACTORS (KEY TRENDS)




Key: PESTLIED = Political; Economic; Social; Technological; Legal; International; Environmental; Demographic


APPENDIX
A More Comprehensive and
Universal System Modeling
Using the Interface of the
“SEMPORCES” Tool

“SEMPORCES” Tool for Living & Non‐living Ecosystems
S Suppliers/Inputs/Partners
Upstream
Left Brain ‐ Evaluate E
E Employees/Brand/IP/etc. HOW?
SUPPLY INFRASTRUCTURE
[D]esign (Inside the Enterprise) C
M   Machinery/Facilities/etc.
‐ Input/Processing/Output (System) O
P   Process/Strategy
Product‐Market Fitness      S
(Feedback)
Y
O Output (Product/Service) Midstream
Right Brain ‐ Explore
S
R Retailers/Channels WHAT?
DEMAND INFRASTRUCTURE
[N]eeds (Outside the Enterprise) T
C Customers/Consumers ‐ Global/Local Environment
E
E Environment (Global) Downstream                         M
WHY?
Total Brain – Envision
SHARED VALUE

S Shared Value (Delight/Pain)

[A]spirations
(= Delight/Pain)
‐ Result (Effect)


SEMPORCES‐Arrow of Time (S‐AT): …………………..…..………………………………………..…….. Client/Customer: ………………………………….……


PRESENT SYSTEM – VALUE DISRUPTION STRATEGY – FUTURE SYSTEM –
SEMPORCES Evolve, Plan, or Disrupt: E.R.I.C. SEMPORCES
S – Suppliers/Inputs/Partners
S

E – Employees/Culture/Brand/IP
E

M – Machinery/Technology/Tool/Infra’
M
P – Process/Strategy/Job To Be Done   DREAM/
P
VISION/
O – Output (Product/Service) Ideal
O
Final
R – Retailers/Distributors/Channels/CRM Result
R
(IFR):
C – Customers/Consumers (Problems) Value
C
(+/‐)
E – Environment (Global) E

S – Shared Dream/Mission/Result/ROI
S



Is
The Main Tool for
Business Model Project Management
(BMPM)


Plan, Organize, Manage, and Present
(Business) Projects
In
Simpler, Better, Leaner, and Faster Ways


“Every Object in the Universe
Is
A System or an Ecosystem
That Can Be Described Using
The Same Categories as in
A Business DNA Model,
Linear Business Model Canvas, and/or
Disruptor’s Arrow of Time”


The LINEAR Business Model Canvas for Business Investors, Mentors, and Startups

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The LINEAR Business Model Canvas for Business Investors, Mentors, and Startups