5/19/2020 Business Model Canvas: Definition, Benefits, and Examples

How to Build a Product Roadmap

Based on a Business Model Canvas

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roadmaps?

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Could you list all of the key building blocks you need to develop, manage, maintain,
market, and sell a product on a single sheet of paper? With the business model
canvas you can! Using the business model canvas approach is a great way to force
yourself to focus on the most strategically important elements of your product. As
the name suggests, the typical use case for this tool is to outline the fundamental
building blocks of a business, but it also can work really well for a product.

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5/19/2020 Business Model Canvas: Definition, Benefits, and Examples

Today we’ll show you how the business model canvas works and how you can use it
to come up with a high-level product strategy.

What is a Business Model Canvas?

As you can see from the sample example below (thanks, Strategyzer.com), a business
model canvas is a one-page summary describing the high-level strategic details
needed to get a business (or product) successfully to market.

The categories or buckets contained in a canvas can be customized. But most will
look similar to the one here—covering such key areas as:

TheWant
product’s value
to build × it does and promises)
propositions (what
better
roadmaps?
Customer segments (who it’s for)
Download
Key activities our book
(the steps the team must complete to make it successful)

Key resources (what personnel, tools, and budget the team will have
access to)

Channels (how the organization will market and sell it)

Customer relationships (how the team will support and work with its
customer base)

Key partners (how third parties will fit into the plan)

Cost structure (what it costs to build the product as well as how to sell
and support it)

Revenue streams (how the product will make money)

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5/19/2020 Business Model Canvas: Definition, Benefits, and Examples

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(https://cdn.productplan.com/wp-
content/uploads/2018/07/Business_Model_Canvas.png)

If you think about it, that’s a fairly comprehensive set of building blocks you’ll need
to think through for your product before you begin developing it. There will certainly
be additional factors that’ll affect your strategy, but if you can fill in these high-level
details—which, as you can see, should fit comfortably on a single page—you’ll have a
useful strategic guide for developing your product roadmap.
(https://www.productplan.com/building-your-first-product-roadmap/)

Why Should I Use a Business Model Canvas

to Develop a Product Roadmap?
Okay, but why? What’s the benefit to building a business model canvas (or the even
more stripped down variation, the lean canvas) to guide my product roadmap
(https://www.productplan.com/what-is-a-product-roadmap/)?

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5/19/2020 Business Model Canvas: Definition, Benefits, and Examples

There are plenty of reasons. But simply put, you can think of a business model canvas
as a mission statement for your product roadmap. It’s a handy reference you can
refer to to make sure your roadmap always reflects all the strategic elements needed
for your product’s success.

Tweet This: (https://twitter.com/intent/tweet?

text=%22Think+of+a+business+model+canvas+as+a+mission+state
ment+for+your+product+roadmap.%22+https://bit.ly/2ubVKDD)
“Think of a business model canvas as a mission statement for your product
roadmap.”

Our co-founder Jim Semick has a couple of great short videos explaining the
×
business modelWant toconcept,
canvas build better
which you can check out in the player below.
roadmaps?

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10:37

As Jim explains, here are a few of the benefits of using a business model canvas to
think through product strategies:

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5/19/2020 Business Model Canvas: Definition, Benefits, and Examples

1. You can use business model canvas to

roadmap quickly.
You can use this canvas approach in just a few hours (and as Jim says, you can even
do with sticky-notes).

This way, rather than trying to write out every detail about your product plan
beforehand, you can just document the highlights—and then you can get rolling
translating the canvas into your product roadmap.

Download Product Roadmaps: Planning Your Strategy➜

(https://go.productplan.com/cs/c/?cta_guid=0c512809-0900-4b64-8d2e-
04baeca42849&placement_guid=53ae44b5-ec4d-4 8-9d1c-
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canvas%2F&redirect_url=APefjpFYgOFyDgvAGxRPraFv2JelNZzaqW2bigZX
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fp=3879484053)

2. A business model canvas will be more

agile.
One problem with the old structure of documenting a business model—the
traditional business plan—was that it was almost always inaccurate as soon as the
author finished drafting it.
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5/19/2020 Business Model Canvas: Definition, Benefits, and Examples

These meaty plans included detailed cost estimates, revenue projections going years
into the future, and long-term plans for growing the staff. How could any of that
remain accurate for long?

In product terms, you can think of the business plan as resembling an MRD (Market
Requirements Document). It’s long, detailed, and probably mostly untrue by the
time it’s done.

But because you can put a canvas together so quickly, it will much more accurately
reflect your strategic thinking and your company’s current reality. And if things
change, it’ll be easier than a long and detailed plan to adjust. Which brings us to
Jim’s third benefit…

3. Business model canvas roadmaps allow

you to pivot as needed.
If you build a business model canvas to guide your business roadmap
(https://www.productplan.com/what-is-business-roadmap/), and something
happens that forces you to re-prioritize or pivot
(https://www.productplan.com/pivot-your-product/), it will be a lot easier to
update this short, high-level document than it would be if you had some monster
MRD or business plan to tear apart and edit.

With a one-page business model canvas acting as the strategic undergirding for your
roadmap, you’ll always be able to quickly spot any items or plans that need updating
whenever priorities change or new realities demand that you adjust your approach.

How Can I Use A Business Model Canvas to

Guide My Product Roadmap?
The Alexa Example
Let’s talk through a hypothetical example, using Amazon’s Echo device (“Alexa”) as
our guide.

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5/19/2020 Business Model Canvas: Definition, Benefits, and Examples

Imagine that as they were talking through what belonged in the “Revenue Streams”
bucket of the business model canvas, Amazon’s Echo team came up with three
sources of revenue to start with:

1) Selling Echo devices.

2) Using the device to sell other stuff as customers ask it to connect to the Amazon
marketplace. (“Alexa, please add laundry detergent pods to my shopping cart.”)

3) Licensing Echo’s proprietary speech-recognition technology to other businesses.

Now, if the Echo product team put these on their business model canvas, they’d
know that they need to make room for budget, time, and resources on their product
roadmap for all of these revenue streams.

Another Hypothetical Example of the Business Model

Canvas: Channels
Or think about the Channels bucket in the business model canvas. If your team was
building out a canvas, maybe you’d have several ideas for reaching customers:

1) The in-house sales team.

2) Affiliate partners.
3) Word-of-mouth advertising from users.

It’s easy to write. But how are you going to translate that “word-of-mouth” strategy
into an actual plan?

Maybe you’ll need to budget time and resources for developing things right into your
product that make it easier for users to share their experiences with friends, such as
a handy tool to help them tweet about it. Maybe you’ll even want to include an
“Invite a friend” feature that lets users easier send a trial license to friends, or a
couponing feature that offers some reward to a user who brings in two more users.

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5/19/2020 Business Model Canvas: Definition, Benefits, and Examples

The point is, your business model canvas can serve as a great strategic reminder of
the things you’ve determined are important enough to make it onto your product
roadmap.

So you can always look back and see immediately—it’s just one page, after all—if
you’re still working on all of the essential elements of your product, or if you’ve
inadvertently strayed from them and gotten lost in the wrong details.

That’s why we’re big proponents of the business model canvas approach to guiding
your product roadmap (https://go.productplan.com/trial).

Do you have an opinion about using the business model canvas approach for
developing and documenting your product’s strategy? Feel free to share them
in the comments section.

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