6 Problems with the Business Model Canvas

The entrepreneur’s favourite tool is far from perfect

Click here for more fun graphs

1. Strategy is not taken into account

Consulting companies have the habit of making young graduates do case study interviews to assess their abilities to become strategy consultants. One of the very first things we look for in a candidate is if they ask “what is the client’s “definition of success”?”.

2. There can be more to profits than costs and revenues

Put very, very simply, profit is equal to revenues minus costs. There is however more to the story. A time dimension, for example; by having revenues come in faster than costs are paid, a virtuous circle is created wherein a company has more money in hand in reality than in theory, allowing for larger investments, and more advantageous bank loans.

3. It is not in the right order.

We are inherently simple people (some more than others). We are used to reading left to right, and that is exactly what we will do when presented with any new document (many exceptions apply, but my readership is mostly Westerners who aren’t big manga readers…).

4. It does not show any interconnections

The order of the strategic decisions made also matters because some variables will strongly impact others. These connections do not necessarily appear in the BMC as it is taught in most business schools.

5. It does not acknowledge the company’s role within its ecosystem

No company is born in a vacuum. Through the rise and fall of entrepreneurs and CEOs alike, communities and the environment can either thrive or be destroyed. Obviously, this does not appear in the traditional BMC. Obviously.

Environmental business model Canvas

  • Supplies & Outsourcing
  • Production
  • Materials
  • Functional Value
  • End-of-life
  • Distribution
  • Use phase
  • Environmental Impacts
  • Environmental benefits

Social business model canvas

  • Local communities
  • Governance
  • Employees
  • Social Value
  • Societal culture
  • Scale of outreach
  • end-user
  • Social impacts
  • Social benefits

6. Competition, history, and other external factors are absent

I’ve said it before, and I’ll say it again : no company is born in a vacuum. Business models exist only in relation to an industry, its historical context, and a multitude of other external factors. To be honest, it isn’t rare for those external factors to have more of an impact on business model definition than any other conscious decision from executives.

Conclusion

Entrepreneurship is hard. If my years as a consultant have taught me anything, it’s that frameworks are key to approaching challenges head-on, in a logical manner. It is however paramount that we question these frameworks regularly, lest we keep reproducing the errors of the past and pass on an opportunity to innovate. The (humbly) innovated business model canvas I propose in this article allows one to do just that.

Strategy Consultant | Tech journalist at ThePourquoiPas.com | AI writer of the Year

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store