Start your company with this canvas

Teaching business model canvas with a look at CafeBazaar experience in using this concept. You can write your assumptions on different segments of this canvas and validate them.

This canvas has 9 segments which include customers, Value Proposition, channels, Customer Relation, Revenue Stream, Key Resources, key activities, key partners and cost structure.

Here I want to teach business model canvas in the form of an example. Business model canvas is a management and visual tool which shows important elements of a business and it is a place for providing ideas about related business.

This tool is a shared language about which different people from different teams can comment.

You can write your assumptions on different segments of this canvas and validate them.

This canvas has 9 segments which customers, Value Proposition, channels, Customer Relation, Revenue Stream, Key Resources, key activities, key partners and cost structure.

This is useful for providing ideas but it is definitely recommended that this tool is used along with lean canvas tool in launching startups.

CafeBazaar and business model canvas

In order to fully understand function of this canvas, I give you an example. Imagine CafeBazaar, which is the first android application in Iran.

CafeBazaar is a place in which programmers offer domestic mobile applications and users buy and download their needed applications.

Now we analyze 9 segments of business model canvas in CafeBazaar.

Customer Segment

CafeBazaar has several isolated customer segment, one of which are customers who have android smart tools.

Another segment are android programmers who look for income and another segment are businessmen who want to advertise their products purposefully.

Value Proposition

What is the value proposition for each one of the customers? Why do you install CafeBazaar on your android smart phone?

I myself use this app because it is domestic and I can have access to Iranian tools and apps. Due to the platform that CafeBazaar has provided, I can have access to Persian content, Iranian apps, online payment and etc.

Now let’s consider it from a programmer’s view. Why do programmers like to publish their apps in CafeBazaar?

Because CafeBazaar has let them offer their apps to Iranian users and make money. This is value proposition.

Channels

You should mention related value proposition for each segment of customers. Usually one color is dedicated to each segment of customers so that canvas becomes more audible.

How does CafeBazaar deliver this value proposition to its customers? How can you access domestic content and Iranian apps as a user?

Of course through CafeBazaar application and CafeBazaar website.

Programmers would have access to it through APIs that CafeBazaar offers and website control panel.

Thus in this part channels are defined: CafeBazaar application and programming APIs and CafeBazaar web panel for programmers.

Customer Relation

How does CafeBazaar maintain its customers? Which ideas does it have to satisfy you?

CafeBazaar has a strong support segment. Also it offers festivals and discounts. It communicates well with us. Even it uses appropriate words.

CafeBazaar has a support team for its programmers and holds a special program called 5ShanbeBazaar in which programmers who work with it are invited.

Learning workshops and special speeches are held in order to promote its practical level. All these have positive effects on satisfaction of customers.

Revenue Stream

CafeBazaar is a platform and its main revenue model is that it receives a percent of mobile application sales.

This model is 70:30 model, i. e. in each transaction 30% belongs to CafeBazaar and 70% belongs to manufacturer.

There are other revenue models in CafeBazaar such as Advertising System.

Key Resources

Which resources does CafeBazaar need in order to survive?

Most important resources for CafeBazaar are:

Human resource, programmers, directors, marketers, support team and etc.

Money, employee wages, advertisement, different promotions and etc.

An office where CafeBazaar team can come together and work.

Equipment, computer, server, table, chair, etc.

A series of patents, like CafeBazaar brand and etc.Software platform and designed

system for coordination

And other resources that each business needs.

Key Activities

Which key activities are needed to lead CafeBazaar business? Consider these activities:

Employment of expert human resource and managing them

Development of software web and application platform

Optimizing servers

Market management, advertisement and analysis of customer behavior

Providing an environment suitable for team work

Providing suitable hardware and software equipment

Examining legal issues of business and preventing challenges

And other key activities which are needed in order to maintain this business.

Key Partners

Partner is a person who does a series of key activities better than you, or can supply some of your resources more quickly.

For example, media that work with CafeBazaar and introduce mobile applications are among its key partners, or if an investment company supplies a capital for CafeBazaar, it is one of its key partners.

Maybe a company supplies its bandwidth of a state agency support it in some way. These are key partners of CafeBazaar.

Cost Structure

All the above mentioned need money and cost. CafeBazaar has two main cost categories:

Fixed costs for example renting a place for CafeBazaar or employees’ wage. These costs always exist. But some costs vary depending on the size of CafeBazaar.

For example, when downloads are increased, the cost of bandwidth would increase as well. It depends on amount of use and number of customers.

In general, costs of a business are obvious and determined; the cost of human resource, rent, initial startup, purchase of equipment, cost of platform development and etc.

It is recommended that you consult with an accountant if you want to analyze your idea for a business.

Conclusion

I hope this would help you. For more information about business model canvas, you can download learning videos of business model canvas for free in DrStartup.ir.