So, you’ve got a brilliant business idea. Now what? Whether you’re launching a startup, refining your strategy, or pivoting an existing business, you need clarity. Enter the business model canvas: a powerful one-page tool that helps you map out how your company creates, delivers, and captures value.
In this guide, you’ll learn what the business model canvas is, how the nine building blocks work, how they connect, and how you can use the canvas in real-world scenarios. Plus, you’ll get actionable tips and expanded examples tailored to today’s entrepreneurs.
What is the business model canvas?
Developed by Alexander Osterwalder, the business model canvas (BMC) is a visual framework that helps you describe, design, and analyze your business model. It consists of nine key building blocks, all displayed on a single page. The beauty? Simplicity and strategy combined.
The 9 building blocks explained with real examples
1. Customer segments
Define who you serve. These are your different target groups, niches, or buyer personas. Avoid being too broad—focus leads to value.
Example 1: A freelance marketing consultant targets SaaS startups in early growth stages.
Example 2: A Shopify store sells eco-friendly baby products to environmentally conscious parents aged 25–35.
Example 3: A B2B cybersecurity firm serves mid-sized law firms in the EU.
2. Value propositions
What value do you deliver to each segment? What problem do you solve or desire do you fulfill?
Example 1: Notion offers a flexible, all-in-one workspace to help users stay organized and productive.
Example 2: HelloFresh saves busy professionals time by delivering pre-portioned meal kits with easy-to-follow recipes.
Example 3: Tesla delivers high-performance electric vehicles with sleek design and cutting-edge technology.
3. Channels
How do you reach your customers? These are your distribution, sales, and communication channels.
Example 1: An online fitness coach uses Instagram Reels, a YouTube channel, and email sequences to build trust and drive signups.
Example 2: A B2B software company sells directly via webinars, LinkedIn outreach, and inbound marketing through SEO.
Example 3: A local bakery promotes on Google Maps, accepts orders via Uber Eats, and maintains a walk-in store.
4. Customer relationships
What kind of relationships do you establish with each segment? Automated, personal, community-based?
Example 1: Netflix offers self-service with algorithm-driven recommendations and limited support.
Example 2: A boutique design agency offers one-on-one consultation and long-term account management.
Example 3: Discord builds community relationships through shared interest servers and community engagement.
5. Revenue streams
How do you make money? Think subscriptions, one-time sales, licensing, affiliate revenue, and more.
Example 1: Canva uses a freemium model—offering free access with optional premium upgrades.
Example 2: An online course creator sells lifetime access to a bundle and adds recurring income with a coaching membership.
Example 3: Amazon earns from product sales, Prime subscriptions, AWS hosting, and affiliate commissions.
6. Key resources
What strategic assets do you need to deliver your value? This includes people, systems, IP, or tools.
Example 1: Airbnb’s key resources include its platform, brand trust, and its host network.
Example 2: A handmade jewelry brand relies on skilled artisans, raw materials, and strong visual branding.
Example 3: Spotify depends on licensing agreements, user data insights, and machine learning infrastructure.
7. Key activities
What must your company do extremely well? Think product development, marketing, logistics, or sales.
Example 1: A SaaS startup focuses on agile development and responsive customer support.
Example 2: A coffee subscription brand focuses on curation, packaging, and content creation.
Example 3: Nike focuses on product innovation, marketing partnerships, and brand storytelling.
8. Key partnerships
Who helps you succeed? These can be suppliers, affiliates, or strategic alliances.
Example 1: A webshop partners with DHL and PostNL for efficient last-mile delivery.
Example 2: Spotify partners with record labels and content creators to enrich its streaming offering.
Example 3: A fashion brand collaborates with influencers and manufacturing partners in Portugal.
9. Cost structure
What are your major costs? Include fixed costs (rent, salaries) and variable costs (ads, packaging).
Example 1: A newsletter-based business has low overhead but high costs in email marketing tools and copywriting.
Example 2: An event business has high fixed venue costs and variable costs tied to ticket sales and logistics.
Example 3: A subscription SaaS tool budgets for dev salaries, cloud hosting, and customer acquisition.
How the blocks work together
Don’t treat the blocks in isolation. Your value proposition should align perfectly with your customer segment. Your channels should match how your audience prefers to buy. For example, if you’re targeting Gen Z creatives, using TikTok might be more effective than email marketing. Likewise, if you sell high-ticket consulting services, automated onboarding may damage trust.
Three ways to apply the canvas
1. Startup idea phase
Use the canvas to sketch assumptions. Validate early with customer interviews or MVPs before building anything big.
2. Scaling an existing business
Spot bottlenecks. Use the canvas to test new segments, refine your revenue model, or expand partnerships.
3. Pivoting
If your market shifts (like post-COVID), use the canvas to reposition your offering or discover new value delivery methods.
Common mistakes to avoid
- Filling out blocks without connecting them logically
- Using generic customer segments like “everyone”
- Underestimating costs or overestimating revenue potential
- Describing features instead of real customer value
Practical example: plant subscription box
- Customer segment: urban millennials with small apartments
- Value proposition: monthly box with low-maintenance plants and personalized care tips
- Revenue stream: recurring monthly subscriptions with add-ons
- Channels: Instagram ads, TikTok influencers, branded website
- Key activities: sourcing unique plants, creating care content, handling fulfillment
- Key partnerships: local growers, sustainable packaging suppliers
Conclusion: from canvas to strategy
The business model canvas helps you simplify complexity and clarify how your business works. It’s not a one-time exercise. Revisit it regularly, test assumptions, and adapt it to market shifts.
Use this modern business model canvas to structure your ideas and build a smarter strategy.
