The customer had a clear idea of what he wanted to do but not how to do it. He wanted to launch an app that matched buyers and sellers in the tourism sector.
Like many customers his focus was on the technology rather than the solution that the customers needed.
The first stage was to bring the client to the position where he could see the business that he wanted to run rather than the app that he was building. I did this using the business model canvas.
The first few drafts of the canvas were designed to bring coherence and clarity to the entrepreneur. They were also intended to provoke him. They deliberately offered him very different ways of building and running his business that delivered on the vision.
At each stage different alternatives were identified and the consequences of each analysed. For example some approaches required high costs in customer service. This either reduced margins significantly – which meant more of a focus on volume, or a shift into a higher margin niche.
As we ran through this process it was clear that the original problem definition had been inadequate. The entrepreneur spent more time with potential customers to understand their pain points better.
We then switched from using the business model canvas to the Lean Canvas. This is similar but is far more powerful when developing a new product or service. That’s because it focuses on the pain that the customer experiences and the value that the startup provides.
The rest of the model is built around that pairing. The Business Model Canvas, by contrast, works better with sectors where there is an established business model and where that business model needs to be disrupted.
The entrepreneur put the development of his technology on hold whilst we designed the business model. If he had proceeded with the initial plan that he had the majority of the investment he was planning to make would have been lost due to a poor business model and inadequate understanding of the value that customers required.