ROI Case File No.410: The Canvas That Visualizes Business Models
The Canvas That Visualizes Business Models
Chapter 1: The Confused Revenue Model
"We want to transform into a platform business, but we can't see the overall picture."
NovaTech's business development manager spoke with a troubled expression. On his laptop screen, a PowerPoint presentation titled "Platform Business Plan" was displayed.
"Currently, we're a product sales company. We manufacture electronic components and sell them to corporate clients. It's a simple model—manufacture products, sell them, receive payment."
He scrolled through the slides.
"However, the market is changing. Our products have become commoditized, and price competition is intensifying. Profit margins are shrinking year by year."
"So management decided: transform into a platform business. Don't just sell products—build a system connecting manufacturers and users, and earn revenue from that. That's the directive."
His voice carried both determination and confusion.
"But honestly, I don't understand how platform businesses make money. Amazon and Uber are platforms, I know that much. But how should we design our revenue model? What value do we provide to whom? How do we differentiate from competitors?"
"We've created a plan, but it's fragmented. We can't see how the pieces connect, what's missing—the whole picture remains invisible."
The directive was clear, but the business model remained unclear. That was NovaTech's current reality.
Chapter 2: Nine Building Blocks
"For this case, the Business Model Canvas is the appropriate framework."
Claude drew a large rectangular frame on the whiteboard, then divided it into nine sections.
"The Business Model Canvas," I began explaining, "is a tool that visualizes all elements of a business model on a single sheet. It consists of nine building blocks."
"These nine blocks are: Customer Segments, Value Propositions, Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key Partnerships, and Cost Structure," Gemini enumerated. "By filling in all nine blocks, the entire business model becomes visible."
The manager tilted his head. "Why do we need to separate it into nine blocks?"
"Because," I answered, "business models are complex systems with many interconnected elements. If you try to think about everything at once, confusion is inevitable. The Business Model Canvas breaks that complexity down into nine manageable pieces."
"And importantly," Claude added, "these nine blocks aren't independent—they influence each other in specific relationships."
[Block 1: Customer Segments - Who Are Your Customers?]
"Let's start with the most fundamental block: Customer Segments," Gemini began.
"In your platform business, who are the customers?"
The manager answered immediately. "Manufacturers who want to sell electronic components, and companies that want to purchase them."
"Wait," I interjected. "In a platform business, you have two types of customers. Let's define them clearly."
Claude wrote on the whiteboard:
- Customer Segment A: Small and medium manufacturers (suppliers)
- Customer Segment B: Electronics manufacturers (buyers)
"A platform connects these two customer segments. That's the fundamental structure," I explained.
"Now, let's narrow it down further. What's the specific profile of Customer Segment A? Company size? Products handled? Geographic region?"
The manager thought for a moment. "Primarily domestic small and medium manufacturers with 10-50 employees. They have excellent technology but lack sales channels."
"And Customer Segment B?"
"Mid-tier electronics manufacturers with 100-500 employees. They want to procure diverse components efficiently, but dealing with many small suppliers individually is burdensome."
"Excellent," Gemini nodded. "Customer segments are now clearly defined."
[Block 2: Value Propositions - What Value Do You Provide?]
"Next is the Value Propositions block," Claude explained. "What value does your platform provide to each customer segment?"
"For Customer Segment A—small and medium manufacturers—what problems does your platform solve?"
The manager considered. "The problem of lacking sales channels... and perhaps difficulty finding new customers?"
"Go deeper," I prompted. "Why is lacking sales channels a problem for them?"
"Because... they can't grow sales. They have good technology and products, but can't reach customers who need them."
"Exactly," I nodded. "So your value proposition to Customer Segment A is: 'We provide opportunities to reach potential customers who need your technology.'"
"Now for Customer Segment B—buyers. What value do you provide them?"
"Efficiency in procurement... and maybe discovery of new suppliers?"
Gemini organized on the whiteboard:
- Value Proposition to A: "Opportunity to reach new customers"
- Value Proposition to B: "Efficient procurement and supplier discovery"
"These two value propositions are the core of your platform business," Claude emphasized.
[Block 3: Channels - How Do You Deliver Value?]
"The third block is Channels," Gemini continued. "How do you deliver these value propositions to customers?"
"For now, we're thinking of building a web platform," the manager answered.
"More specifically," I pressed. "How do customers discover your platform? How do they register? How do they use it?"
The manager thought deeply. "For Customer Segment A, we'd directly approach small manufacturers and explain the platform's value. For Customer Segment B, we'd promote through industry media and exhibitions..."
"And after they register?"
"They'd search and communicate through the web platform. Eventually, transactions would occur."
Claude summarized: "In other words, your channels are: Initial contact → Registration → Usage → Transaction. Define specific methods for each stage."
[Block 4: Customer Relationships - How Do You Maintain Relationships?]
"The fourth block examines how you maintain customer relationships," Claude explained.
"In platform businesses, this is especially important. Customers won't keep using a platform without sustained engagement."
"What kind of relationships do you want to build with Customer Segment A and B?" I asked.
The manager hesitated. "Well... ideally, they'd use it regularly..."
"Let's be more concrete," Gemini suggested. "For example, will you provide dedicated account managers? Will you send regular email newsletters? Will you create a community where users can interact?"
"For small manufacturers, perhaps regular follow-up from account managers would be effective. For buyers, maybe automated recommendations of new suppliers that match their needs..."
"Good thinking," I encouraged. "Customer Relationships defines the specific methods for sustaining customer engagement."
[Block 5: Revenue Streams - How Do You Earn Money?]
"Now the crucial block: Revenue Streams," Gemini said seriously. "How does your platform generate revenue?"
The manager looked troubled. "That's what we can't figure out..."
"Let's think systematically," Claude suggested. "Platform businesses typically have several revenue models. Transaction fees, subscription fees, listing fees, advertising revenue—which fits your business?"
"Transaction fees might work... taking a percentage when actual transactions occur on the platform."
"That's one option," I acknowledged. "But consider: in the early stages of a platform business, transaction volume is small. Can you sustain the business with only transaction fees?"
The manager fell silent.
"How about combining multiple revenue streams?" Gemini proposed. "For example: Basic registration is free, but charge manufacturers a monthly fee for premium features like priority display or detailed analytics. From buyers, collect transaction fees when deals close."
"That... might work," the manager's expression brightened.
Claude organized:
- Revenue Stream A: Monthly subscription fees from manufacturers (¥30,000-50,000)
- Revenue Stream B: Transaction fees from buyers (3-5% of deal value)
"This combination provides stable subscription revenue while scaling with platform growth through transaction fees," I explained.
[Block 6: Key Resources - What Do You Need?]
"The sixth block examines necessary resources," Gemini continued. "To operate this platform business, what resources are essential?"
"Well... the platform system itself, of course."
"Yes. What else?" I prompted.
The manager thought. "A database of manufacturers... and buyer companies..."
"Those are crucial resources," Claude noted. "And?"
"Staff to operate the platform... and perhaps engineers to maintain the system..."
Gemini organized:
- Key Resources: Platform system, manufacturer database, buyer database, operations staff, engineers, brand credibility
"Don't forget intangible resources," I added. "Brand credibility, for instance. Why would manufacturers and buyers trust your platform? That trust itself is a vital resource."
[Block 7: Key Activities - What Must You Do?]
"The seventh block identifies key activities," Claude explained. "What activities are essential to deliver value propositions?"
"Platform development... and customer acquisition..."
"Go deeper," I pressed. "What specific activities are needed?"
The manager enumerated: "Recruiting manufacturers, recruiting buyers, platform maintenance, matching support, transaction management..."
"Exactly," Gemini confirmed. "Key Activities are the operational tasks that must be performed continuously."
[Block 8: Key Partnerships - Who Do You Need?]
"The eighth block considers key partnerships," Claude continued. "What external partners are necessary for your platform business?"
"We can't build the platform system ourselves, so we'd need a development company..."
"Who else?" I prompted.
"Maybe industry associations? For credibility when recruiting manufacturers... and perhaps logistics companies for delivery support..."
Gemini listed:
- Key Partnerships: System development companies, industry associations, logistics companies, payment service providers
"Platforms don't operate in isolation," I explained. "Effective partnerships expand your capabilities."
[Block 9: Cost Structure - What Are the Expenses?]
"Finally, the ninth block: Cost Structure," Gemini concluded. "What costs are required to operate this business model?"
"Platform development costs... and system maintenance fees..."
"And operational costs," Claude added. "Staff salaries, marketing expenses, partnership fees..."
The manager calculated: "Development might be ¥50 million, monthly maintenance around ¥2 million, operational staff salaries ¥5 million monthly, marketing ¥3 million monthly..."
"Now," I said, "compare costs with revenue streams. When do you reach profitability?"
The manager worked through calculations on his laptop. "If we acquire 100 manufacturers within six months, with 30% subscribing to premium plans... and monthly transaction fees averaging ¥5 million... we might break even in about 18 months."
"That's a concrete timeline," Gemini noted. "Cost Structure makes the business model's financial feasibility visible."
Chapter 3: How the Nine Blocks Connect
The manager stared at the whiteboard now filled with all nine blocks.
"The overall picture has become clear. But how do these nine blocks connect?"
"Excellent question," I replied. "The Business Model Canvas isn't just nine separate blocks—it reveals the relationships between them."
I drew arrows connecting the blocks.
"Value Propositions are delivered to Customer Segments through Channels. Customer Relationships sustain engagement. These generate Revenue Streams."
"Meanwhile, to create Value Propositions, you need Key Resources and Key Activities. Key Partnerships support these. And all of this requires costs, forming the Cost Structure."
"In other words," Claude summarized, "the right side of the canvas shows value creation and delivery, while the left side shows the infrastructure needed to enable that."
The manager's expression showed understanding. "So if one block changes, others are affected too..."
"Exactly," I nodded. "That's why the Business Model Canvas is powerful. It makes visible not just individual elements but the entire business model as a system."
[The Canvas Reveals Gaps]
"Now look at your canvas," Gemini instructed. "Are there any weak or missing blocks?"
The manager examined it carefully. "Customer Relationships feels weak... we haven't concretely defined how to sustain engagement..."
"That's an important insight," I affirmed. "The canvas makes such gaps visible. Now you know where to focus improvement efforts."
"And," Claude added, "you can test hypotheses. For example, 'If we strengthen Customer Relationships this way, will Revenue Streams increase accordingly?'"
Chapter 4: The Living Canvas
"One more important point," I emphasized. "The Business Model Canvas isn't something you complete once and finish."
The manager looked puzzled.
"Business models are living entities. They evolve as markets change, customers change, and competitors emerge. The canvas should be updated continuously."
Gemini elaborated: "Start by creating an initial version based on current hypotheses. Then actually launch the business and verify each block. When reality differs from assumptions, update the canvas. That cycle of iteration refines the business model."
"So we should create version 1.0 now, then evolve it to 2.0, 3.0..." the manager understood.
"Exactly," Claude smiled. "And each version should be dated and saved. Tracking how your business model evolved becomes valuable learning itself."
The manager stood and bowed deeply. "Thank you. The fog has lifted completely. Now I can see not just individual pieces but how they all fit together."
After he left, Claude remarked, "The Business Model Canvas is an elegant framework. Condensing complex business models onto one sheet."
"Yes," I agreed. "But its true value isn't just visualization—it's creating a common language for teams to align on business model design."
"Without a shared framework," Gemini added, "each person imagines different things when discussing 'business model.' The canvas prevents that misalignment."
Outside the window, the afternoon sun illuminated the office.
Two months later, a report arrived from NovaTech.
Using the Business Model Canvas, they refined their platform business plan and gained board approval. Version 1.0 of the platform launched with 15 manufacturers and 8 buyer companies registered.
And the canvas itself was already evolving to version 2.0 based on initial feedback.
The nine building blocks were steadily coming to life.
"Business models are complex systems. But complex systems can be understood through decomposition. Nine building blocks—customers, value, channels, relationships, revenue, resources, activities, partnerships, costs. Visualize these on one canvas. Then iterate and evolve. That is the wisdom taught by the Business Model Canvas."