pm-skills/pm-product-strategy/skills/business-model/SKILL.md

---
name: business-model
description: "Generate a Business Model Canvas with all 9 building blocks. Use when creating a business model, documenting how a business creates value, or analyzing an existing business model."
---
# Business Model Canvas

## Metadata
- **Name**: business-model
- **Description**: Generate a Business Model Canvas with all 9 building blocks. Use when creating a business model, documenting how a business creates value, or analyzing an existing business model.
- **Triggers**: business model canvas, BMC, business model, how we make money

## Instructions

You are a business model strategist designing a Business Model Canvas for $ARGUMENTS.

Your task is to create a comprehensive Business Model Canvas that outlines how the business creates, delivers, and captures value.

## Input Requirements
- Product or service description
- Target customer(s) and market
- Current business operations or assumptions
- Competitive context or industry dynamics

## Business Model Canvas Template

### Left Side: Creating Value

**1. Key Partners**
- Who are the key strategic partners and suppliers?
- What partnerships enable our business model?
- Which activities do partners handle?
- Are there joint ventures or co-creation opportunities?

**2. Key Activities**
- What key activities does the business perform?
- What processes are critical to delivering value?
- Are these activities in-house or outsourced?
- Production, problem-solving, platform/network activities?

**3. Key Resources**
- What resources are necessary to create value?
- Physical assets, intellectual property, human capital, financial
- What resources enable key activities and partnerships?
- What's the minimum viable resource set?

### Center: The Value Proposition

**4. Value Propositions**
- What value do we deliver to customers?
- Which customer problems do we solve?
- What needs are satisfied?
- What products/services address each segment?
- Quantitative (price, speed, quality) vs. qualitative (design, status)

### Right Side: Delivering Value

**5. Customer Relationships**
- How do we establish and maintain customer relationships?
- Personal assistance, self-service, automated, community, co-creation
- Cost of customer acquisition and retention
- How do we keep customers engaged?

**6. Channels**
- How do customers discover and access the value?
- Awareness: How do customers learn about us?
- Purchase: How do they buy?
- Delivery: How is value delivered?
- After-sales: How do we support customers?
- Direct vs. indirect, owned vs. partner channels

**7. Customer Segments**
- Who are the key customer segments?
- Mass market, niche market, segmented, multi-sided platform
- What are their defining characteristics?
- Distinct needs, channels, relationships, or profitability

### Bottom: Financial Viability

**8. Cost Structure**
- What are the most important costs?
- Fixed vs. variable costs
- Cost drivers (scale, automation, labor, infrastructure)
- Is this a cost-driven or value-driven business?

**9. Revenue Streams**
- How does the business make money?
- Per customer, per transaction, subscription, licensing, rents
- Pricing mechanisms (fixed, dynamic, value-based)
- Customer lifetime value and unit economics

## Output Process
1. Identify and profile customer segments
2. Define the core value proposition(s)
3. Map customer relationships and channels
4. List key activities and resources
5. Identify key partners
6. Outline cost structure
7. Define revenue streams
8. Ensure all 9 blocks align and support each other
9. Test economic viability (LTV > 3x CAC)
10. Identify key assumptions and risks

### Domain Context

**Business Model Canvas vs Lean Canvas vs Startup Canvas**:

Business Model Canvas (Strategyzer, Alexander Osterwalder) is the most widely used canvas framework. It provides a balanced, holistic view of how value flows through the organization. However, it has known limitations for product strategy:

- **No vision**: Why should your team wake up every day? BMC doesn't address motivation or aspiration.
- **No Can't/Won't test**: What stops competitors from copying you? BMC lacks a defensibility section that goes beyond listing resources.
- **No trade-offs**: What you choose NOT to do creates focus and amplifies value — BMC doesn't address this.
- **No key metrics**: How do you know the strategy is working? BMC has no metrics section.
- **Low-value sections for startups**: Key Partnerships and Key Resources are rarely useful for early-stage products.

**When to use BMC**: Established businesses, corporate strategy, investor materials where you need to articulate how all operational pieces connect.

**Alternatives**:
- **Lean Canvas** (Ash Maurya): Startup-focused, faster, replaces Partners/Activities/Resources with Problem/Solution/Unfair Advantage. Better for hypothesis testing but still mixes strategy and business model.
- **Startup Canvas** (Paweł Huryn): Separates strategy (9 sections from the Product Strategy Canvas) from business model (Cost Structure + Revenue Streams). Recommended for new products where you need strategic clarity alongside the business model.

## Notes
- The Business Model Canvas provides a holistic view of how value flows through the organization
- Each block should reinforce and support the others
- Strong business models have clear, defensible value propositions
- Financial sustainability requires revenue to exceed costs at scale
- Use this to identify opportunities for innovation and optimization

---

### Further Reading

- [Business Model Canvas Examples: Google Maps, Airbnb, Uber](https://www.productcompass.pm/p/business-model-canvas-examples)
- [Startup Canvas: Product Strategy and a Business Model for a New Product](https://www.productcompass.pm/p/startup-canvas)