This tool is for creating a distinctive and collaborative business model around your innovation. It helps you examine the flow of value generated by a new idea and sets out each partner’s expected contribution and reward. The Business Model Canvas was created by BusinessModelGeneration.com. We have adapted it for open innovation, prioritising the parts of the Business Model Canvas that are most relevant to effective partnerships: Key partners, Key Activities, Key Motivations, Key Resources, Cost Structure and Revenue Streams.
First learn the Collaborative Business Canvas by choosing five or six competitors of our product, service or brand to serve as examples and analyse their business models. You can use this analysis to create a distinctive business model for your innovation.
Use the table below to analyse the norms and outliers in your sector, filling in one copy of the table per competitor. For this exercise you just need to write one sentence in each of the boxes:
What are the similarities in business model across our sector? What are the points of difference between business models in our sector? (Which aspects might help us stand out from the competition? Where might our business model add value to users, consumers or partners?)
Next start to build your new business model. Ideally, you should use an A3 printed version of the template and sticky notes to record our choices. Write each quickly to avoid becoming attached to a single polished idea, and tightly to fit on one sticky note. When presenting a completed business model, build it one sticky note at a time as you talk about the different sections.
As partnerships are critical for open innovation answer these questions about their nature first:
Who are your key partners?
Who are your key suppliers?
Which key resources are partners acquiring from each other?
Which key activities do you and our partners perform?
Then turn your motivations for partnership. Which of these apply? Any others?
Optimization and economy
Reduction of risk and uncertainty
Acquisition of particular resources and activities
Which activities will each partner be responsible for now and in the future?
What is the Give|Get or Open Innovation Model that you are intending to use? What are the negative motivations – reasons not to enter into partnership?
What key resources are needed? Where are your resources (physical, intellectual, human and financial) going to come from? Which partner or other source will provide them?
What is the overall cost structure for getting this innovation to market, producing and marketing it? Who will bear these costs?
What revenue streams are we expecting? How will they be divided between partners? What might impact revenue negatively?
Ideally, you will have written your first canvas quickly and so you can now come back and look at a number of alternatives, trying out as many different plans as time allows. For example, ask yourself “what if I offered my product for free” vs. “what if I offered my product only to the very high-end market”
Finally, you can choose a business model that you and your team agree is the most promising and then revisit it in more detail. It is a good idea to gather feedback from colleagues in different departments and partners who weren’t able to contribute. For example, if your model depends heavily on a particular channel or customer type you will need to speak to your channel partners or marketing colleagues.
Source: Inspired by Alexander Osterwalder. The Business Model Canvas was created by BusinessModelGeneration.com under a creative commons licence (like the 100%Open Innovation Toolkit!) and you can download it along with instructions.