CHAPTER 2

The Business Model Canvas

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You might think of a business model as a blueprint describing how an organization operates.

Just as an architect prepares blueprints to guide the construction of a building, an entrepreneur designs a business model to guide the creation of an enterprise. A manager also might sketch a business model to help visualize how an existing organization operates.

To start understanding an existing business model, ask two questions:

  1. Who is the Customer?
  2. What job does the Customer need to have done?

To illuminate this idea, let's look at three enterprises.

First: Think about Jiffy Lube®, a drive-in, quick oil change service based in the United States. Few car owners are interested in changing engine oil themselves. Most lack the knowledge and tools — and prefer to avoid the preparation and potential mess of this dirty task (plus the hassle of recycling used oil). For $25 or $30, Jiffy Lube provides experts who let people do just that.

Next, consider Ning. Ning lets people easily and inexpensively make and manage customized social networks. Few companies (or individuals) have the money or expertise to build, host, and operate a social network that offers Facebook-like functionality. Enter Ning, which provides a simple, affordable substitute: a social network template, modifiable on multiple levels.

Finally, there's Vesta, a firm that completes electronic ...

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