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Business Model Generation

A Handbook for Visionaries, Game Changers, and Challengers

By Alexander Osterwalder & Yves Pigneur
13-minute read
Audio available
Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers by Alexander Osterwalder & Yves Pigneur

Business Model Generation (2010) is a comprehensive guide to building innovative business models. From empathizing and connecting with customers to finding inspiration for products and learning from some of today’s most game-changing platforms, these blinks will help you kick-start your business thinking.

  • Aspiring entrepreneurs
  • Business people seeking an introduction to business models
  • Readers curious about the core elements of businesses

Alexander Osterwalder is a co-founder of Strategyzer, an SaaS solution for business model generation. He offers online courses on creating innovative business models.

Yves Pigneur is a computer scientist from Belgium. He has taught management information systems at the University of Lausanne, the National University of Singapore and at HEC Montreal.

Osterwalder and Yves also co-authored Value Proposition Design and Business Model You.

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Business Model Generation

A Handbook for Visionaries, Game Changers, and Challengers

By Alexander Osterwalder & Yves Pigneur
  • Read in 13 minutes
  • Audio & text available
  • Contains 8 key ideas
Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers by Alexander Osterwalder & Yves Pigneur
Synopsis

Business Model Generation (2010) is a comprehensive guide to building innovative business models. From empathizing and connecting with customers to finding inspiration for products and learning from some of today’s most game-changing platforms, these blinks will help you kick-start your business thinking.

Key idea 1 of 8

A business model starts with your customer groups, value propositions and market channels.

There’s a business for just about everything these days: Nestlé snacks, Nike apparel, the brand of underwear you’ve got on right now. And though these businesses seem very different, they’ve all got one thing in common – they create and deliver value for customers.

It all starts with a business model that defines a market of customers for whom a product creates value. Customers are at the heart of any good business model – after all, a business can’t survive without them.

There are two main categories: mass market and niche market.

With a mass market approach, businesses cater to a very large market of customers with similar needs – say, needs for paper napkins or milk. A niche market approach, on the other hand, is where a business reaches out to a smaller group of customers with specific interests, like a vintage record store, for example.

After identifying which market your business belongs in, what’s next? Well, you need to come up with your value proposition. This outlines the problem that your product solves, or, in other words, the need it fulfills for your customer. Your value proposition should also demonstrate why your product is worth choosing over others.

The value of your product can derive from one of many factors. Stunning design might imbue your product with aesthetic appeal that beats out the competition – just think of Apple products, for example. Or customers might be drawn to the risk reduction that your product offers, which is often the case with IT services. Or perhaps your product’s performance holds all the appeal – a computer that’s faster and more powerful, for instance, offers considerable value to customers.

After setting out your market and your value proposition, your business model needs an outline of the channels that you’ll use to reach out to and engage with your customers. There are a wide range of options. You can establish your own channels, like a storefront, a website or a sales team. Or you can create channels through business partners, like a shop that stocks your product, for example, or a wholesaler.

Now that we’re familiar with the first three elements of the business model, let’s move on to the next three.

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