The concept of writing a 100-page business plan is (mostly) dead within the Internet/tech start-up community.  Instead, through the work of people like Alexander Osterwalder, Steve Blank, Eric Ries, and Ash Maurya, the community is focusing less on “business plans” and more on “business models.”  The rise of the business model has been highly influenced by the agile development and lean startup movements.

“No business plan survives first contact with customers.”

Steve Blank, serial entrepreneur turned author/professor of entrepreneurship, explained the shift best:  “Entrepreneurs treat a business plan, once written as a final collection of facts. Once completed you don’t often hear about people rewriting their plan. Instead it is treated as the culmination of everything they know and believe.  It’s static.”

And, as Blank often says about startups in particular, “No business plan survives first contact with customers.”

Instead, Blank and the others have been pushing business models as an alternative means for capturing the essence of your business.  Blank argues, “A business model describes how your company creates, delivers and captures value. It’s best understood as a diagram that shows all the flows between the different parts of your company. This includes how the product gets distributed to your customers and how money flows back into your company. And it shows your company’s cost structures, how each department interacts with the others and where your company can work with other companies or partners to implement your business.”

Rather than investing 3 – 6 months in researching the market, developing hypotheses and writing a 100 page tome that no-one (not even your investors) will ever read, the business model evangelists argue that time would be better spent designing and TESTING the hypotheses of your model.  And the mechanism for tracking your business model should be a single canvas rather than the traditional report.

What is a Canvas?

The canvas concept is largely credited to Alex Osterwalder, also known as the “Business Model Alchemist,” who created the “Business Model Canvas.” Osterwalder’s book, Business Model Generation is one of the founding texts of this movement.  We highly recommend reading it or at least the 70 page preview he offers on his website.  He also offers a downloadable PDF version of his Business Model Canvas which you can edit and work from.

Leaders of the Lean Startup Movement quickly realized the value of the canvas and began looking for ways to optimize Osterwalder’s methodologies and canvas for Internet startups.  As Blank wrote in October of last year:

“In the last year I found that the Osterwalder Business Model canvas could be used for something much more than a static planning tool.  I realized that it was the launch-pad for setting up the hypotheses to test, and a scorecard for visually tracking iterations and Pivots during Customer Discovery and Validation.”

Since then, we’ve seen several different canvases for the startup community.  Here are a few and links to interactive versions you can use today: