I am adding a new category: book reviews. I read a lot on business, social change, & etc.–I just read a lot. So I am going to express my opinions here, as well as on

Business Model Generation

Business Model Generation by Alexander Osterwalder & Yves Pigner

Written by two guys from Switzerland together with 470 contributers from around the world, this book is not your typical business innovation book. First, it is very accessible, intuitive, and easy to use. It is indeed a “handbook for visionaries, game changers, and challengers”!

The essense of the book is the “Business Model Canvas”–a simple framework that solves the problem of defining what business model, creates a shared language, and spurs innovation. Here’s what it looks like:

An Example of Business Model Canvas

The Canvas consist of nine blocks:

  • Customers
  • Value Proposition
  • Distribution Channels
  • Relationships
  • Key Activities
  • Key Partners
  • Key Resources
  • Cost Structure
  • Revenue Structure

Any business model can then be described using these blocks. But the most important thing is that it allows people from different backgrounds to create business models together. If you are looking for a brainstorming activity, that involves hundreds of post-its, divers group of people, and gallons of coffee–add this book to the list!

The strong sides of the book:

  • Clear, concise, simple approach to business model innovation
  • Tested, re-tested, and refined–no bullshit
  • Great design by  The Movement–it’s a pleasure to read and fun to work with!

The weak sides:

  • Puts external context (market forces, etc.) outside–easy to get carried away and ignore the outside world
  • Uncompromising about where to each aspect of the business, which can potentially split the team.

Let me give an example of the last point. At the workshop, the author have said that the brand goes into Key Resources, but a marketing person behind me wasn’t satisfied. “You don’t have a business if you don’t have a brand!”–he said. Of course, a finance guy would have said the same about finance: we don’t put financing the separate box either. But putting each aspect of the business into a separate box would have made the canvas a mess. To illustrate that brand is not always a part of the business model: how many have heard about Hon Hai? I am sure far more people own stuff they’ve made.

Anyway. Overall, I really like this book. Tomorrow, I am going to put it into practice and brainstorm business models with social mission–I am excited to see how it works in a group!

Oh, the best part is that Alexander Osterwalder puts all his slides online! There he has also stuff on business models beyond profit and lots of other interesting stuff.