Discover more from Words, By Mat Sherman
Ignore The Business Model Canvas When Starting A Startup
Let’s kick this off saying that there is no easy way to start a startup...
Let’s kick this off saying that there is no easy way to start a startup and there isn’t an easy way to teach someone how to start a startup. I think the Business Model Canvas is a great start to get to a point where we can effectively teach people about the mechanics of starting one. The canvas encourages iterative thinking with sticky notes and essentially eliminates the need for a business plan. It’s a new school way of thinking about how to build a businesses and it seems to be widely adopted among higher learning institutions, including Arizona State University, where I attended college. I will say, for businesses, the BMC is spectacular and I will praise it every chance I can get. For startups on the other hand, it’s a murderer.
Consider this cat the canvas and you’re the cute baby.
Although a step in the right direction, the business model canvas is one of many reasons startups fail before they even start. I’ll explain. I took two classes in college about how to start a startup and both of them had us fill out the whole canvas. It had us thinking about customers, costs, partners, resources, revenue, value props, and pretty much everything you need to be thinking about when running a functional business.
Well, news flash for ya. A startup is not a business. A startup is a fast growing machine created to find product market fit, scale, then turn itself into a business. In the very beginning of a startup, founders should be focused on building product and talking to users, all the way up through product market fit. This doesn’t come as common sense to most founders in the beginning. Hell, who can blame them? The BMC has them thinking about partnerships before a line of code is even written.
What I was taught, and how thousands of people are being taught, is that all these boxes deserve our attention when starting a startup. We don’t need a whole canvas to figure this out. When we are told to think about resources, costs, and partnerships, we are forced to think about things that really don’t matter. Yes startups, partnerships don’t matter. Or a better way to say it is that sales matter a lot more than partnerships. If your sales are suffering but you have this “partnership in the works”, that’s not a good sign.
So, with that, I summarize and break down three reasons to ignore the business model canvas as a startup.
1. You aren’t starting a business. Yet.
Let’s distinguish between a startup and a business. A startup is a machine to find a need in the market, solves it, scales, then turns into a profitable business. It’s better to be profitable from the start but shit happens. So, your company that isn’t aimed for high growth is not a startup in my book. It’s a business. Businesses are awesome and make up the backbone of this country, but you’re not a startup…in my book at least. Startups grow or aim to grow, quickly.
For a business, all 9 blocks in the BMD matter. In a startup only two of them do. Say hello to the startup model canvas.
2. You Only Have 24 Hours
The business model canvas forces you to think critically about the nine different blocks. Then you need to take time to fill out the sticky’s and change the around as things change. This is time consuming. If you work on your startup 10 hours a day, do you think spending a little over an hour on every block is going to reap many benefits? Spending 5 hours on the two blocks listed will result in a better outcome because at your stage, as mentioned, those are the only two that matter.
After you find Product Market Fit, the others matter more but until you do, all the other blocks are simply a distraction.
3. Gives you an excuse to be distracted
The canvas encourages you to think about your resources and partnerships. It makes it seem like these are things a startup should be focussed on in the beginning when in reality, it’s just not. If you ask a founder who is all in on the canvas how they spend their time, they’ll say they just work on the canvas. That is not a good use of time and they don’t even realize it. I feel like people fill out these canvases and they hang them up like a badge of honor. You know what you should hang up like a badge of honor? Your non existent growth because you spent too much time figuring out who your partners are going to be and not enough time working on your actual product.
The business model canvas is great in some areas, but for a startup, it can be a distraction. I already gave you your canvas. Build product and talk to users. Anything else is a distraction.