What is the Business Model Canvas?
The Business Model Canvas breaks a business down into nine building blocks — Customer Segments, Value Propositions, Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key Partners, and Cost Structure — and lays them all out on a single canvas.
Instead of writing a business plan as pages of prose, spreading nine blocks out where you can see all of them at once makes it easy to share, at a glance, who you’re serving, what you’re offering, how you deliver it, and how it makes money.
It’s useful not just for launching something new, but for revisiting an existing business too. Wherever a block comes up blank or contradicts another, that’s a question worth digging into.
Where this works well
- When you want to explain a new business or product’s full shape to someone in one page
- When you want to audit an existing business for weak or missing pieces
- When you want a shared starting point for a team discussion about a business plan
- When you want to check that “who,” “what,” and “how it makes money” haven’t drifted apart
About the sample diagram
The “Business Model Canvas” folder in the demo above reproduces the classic canvas layout — Value Propositions in the center, Partners/Activities/Resources and Relationships/Channels/Segments on either side, and Cost Structure and Revenue Streams along the bottom — across four diagrams, Step1 through Step4, that fill in a few more blocks at each stage (the demo above opens straight to the finished Step4). They correspond to steps 1-4 in “Building a Business Model Canvas in ThinkTray” below, so switching to the diagram with the same number in the tree as you read lets you watch the blocks fill in one at a time.
The sample is built around a fictional subscription-based habit-tracking app, Habit Notes, made by a solo developer. The premise is that the individual developer from the 3C analysis article actually built the product and turned it into a business (see the 3C analysis article). Swap in your own business or product when you use this for real.
Building a Business Model Canvas in ThinkTray
Step 1: Put Value Propositions (VP) in the center
Start in the center with the most important question: what value do you offer your customers? Use the card tool (R) to make a larger frame, and add cards spelling out the value propositions.
The sample lists three: “Log today’s habits in under 3 minutes,” “See your streak with a simple graph,” and “Built to keep solo users from giving up.” This state is shown in the tree as “Step1.”
Step 2: Add the three customer-facing blocks on the right
To the right of Value Propositions, place Customer Segments (CS), Customer Relationships (CR), and Channels (CH) — who you serve, what kind of relationship you have with them, and how you reach them.
- Customer Segments — people who’ve tried and dropped habit apps before; freelancers who work from home
- Customer Relationships — one-to-one support via in-app chat; update notes sent by email
- Channels — organic search on the App Store / Google Play; posts from the developer on X (formerly Twitter)
This state is shown in the tree as “Step2.”
Step 3: Add the three supporting blocks on the left
To the left of Value Propositions, place Key Partners (KP), Key Activities (KA), and Key Resources (KR) — who you work with, what you do, and what you use to create the value.
- Key Partners — payment/subscription billing provider; App Store and Google Play; habit-building and wellness influencers
- Key Activities — building and improving the app; answering user support requests; posting and listening on social media
- Key Resources — the app itself and its source code; the developer’s own time; users’ accumulated streak data
This state is shown in the tree as “Step3.”
Step 4: Add money in and out along the bottom
Finally, add Cost Structure (C$) and Revenue Streams (R$) along the bottom.
- Cost Structure — server and cloud hosting costs; payment processing fees; the developer’s own living costs
- Revenue Streams — monthly subscription fee; annual plan (discounted)
Once all nine blocks are filled in, read through from top to bottom and check whether the business actually adds up financially. If the revenue streams don’t cover the cost structure, that’s a cue to revisit pricing or the customer segments. This finished state is “Step4” — the diagram the demo above opens to.
How this differs from the Lean Canvas
A closely related framework is the Lean Canvas, created by Ash Maurya. It swaps four of the Business Model Canvas’s nine blocks — Key Partners, Key Activities, Key Resources, and Customer Relationships — for startup-focused blocks: Problem, Solution, Key Metrics, and Unfair Advantage. Reach for the Business Model Canvas when you’re mapping out a business that’s already fairly settled, and the Lean Canvas when you’re testing hypotheses for something brand new.
Tips
- Don’t overload a single block — keeping each block to two or three short-phrase cards makes it easier to scan later.
- Start from Value Propositions — filling the nine blocks in order tends to drift; anchoring the center first keeps the rest consistent.
- Always look at cost and revenue together — writing out just one in detail doesn’t tell you whether the business actually works.
- Don’t be afraid of a blank block — a block you can’t fill in is useful information too: it tells you what hasn’t been decided yet.
- Redraw it as the business grows — partners and channels tend to change as things develop.
The Business Model Canvas was proposed by Alexander Osterwalder in 2005 and became widely known through the book he coauthored with Yves Pigneur, “Business Model Generation” (2010). Wikipedia
“Business Model Canvas” is a registered trademark of Alexander Osterwalder (USPTO Reg. No. 4,411,578).