Teaching Entrepreneurship A Practice Based Approach Exercise Business Model Canvas Game (QAA 1,5)

Objective:

Reflect on the meaning and importance of the nine business model components.
Demonstrate how the ordering on the canvas categorizes components as generating value or creating efficiency to deliver value.
Discuss and debate the ordering proposed by Osterwalder and Pigneur (2010).

Overview:

The Business Model Canvas (http://www.businessmodelgeneration.com/ canvas) has become a popular teaching tool in entrepreneurship classrooms. It is not my intention here to introduce the canvas or illustrate how it works. Osterwalder and Pigneur (2010) do a magnificent job explaining the canvas, articulating the theory behind the canvas, and offering many ways to use the canvas. This exercise is a quick game to help students reflect on the nature and ordering of the nine business model components found on the canvas as proposed by Osterwalder and Pigneur.

Usage Suggestions

This exercise works well for both undergraduate and graduate audiences. The exercise is best used in a course or class session where the Business Model Canvas is first being introduced.

Activity:

Pre- Work Required by Students - None.

Time Plan (30 minutes)

The Game Setup 0:00–0:05 (5 minutes)

Before introducing the canvas, simply introduce that there are nine components of a business model. I typically show a PowerPoint slide with the nine components listed in random order. Tell the students that there is a particular order to the components, but they need to figure out what the order is. In other words, they need to determine which of the components should be considered first, second, and so on. What’s most important to start with and what’s least important? Separate students into teams of five (maximum).

The Game 0:05–0:15 (10 minutes)

Give each team a deck of cards (see resources) and ask them to place them in order from one to nine (10 minutes). After 10 minutes, give each team a long piece of masking tape and have them tape the order of their cards to the wall or board, so everyone can see the differences across the team.

The Discussion 0:15–0:30 (15 minutes)

Now it is time to introduce the ordering that Osterwalder and Pigneur use. Their book (see Theoretical Foundations) is quite helpful if you are not familiar with the canvas. I typically give out a copy of the Business Model Canvas to each student prior to disclosing the order. The ordering of the components is:

Customer segments
Value proposition
Channels
Customer relationships
Revenue streams
Key resources
Key activities
Key partners
Cost structure

Usually student teams will have either customer segments or value propositions first and this creates a wonderful debate in the class. Introduce the order of the components one by one while also explaining what each component is. After walking through the components and discussing the differences in order created by each team I end the exercise with a brief discussion summarizing the order. At the end of the day, the ordering really does not matter because the canvas is meant to be an iterative, working document that will continuously change as you learn new information from every action taken or experiment conducted. What is most interesting about the design of the canvas and its ordering is found when you fold the canvas in half (left to right).

According to Osterwalder and Pigneur, the right side of the canvas is concerned with creating and generating value. The left side of the canvas is concerned with generating efficiencies to deliver that value. As such, an entrepreneur needs to first determine or create the value and then develop the approach to deliver that value. Innovation, novelty, creativity, and competitive advantage are most often found in the value creation. So, start on the right!

Teaching Tips

The most important reason that I do this exercise is to get the students thinking about each component on their own in teams rather than just “telling” them about each component. Expect raging debates about customer segments versus value propositions as being first in the order. It is always a great conversation to have.

Skill Development:

Key Takeaways

It is important to think about the ordering of the components but not be wedded to one particular ordering.
A business model is about value creation, delivery, and capture – but start with creation and think about cost last.
Focusing too soon on cost structure and resources can diminish the innovativeness of new ideas. This can happen when we start on the left side of the canvas.

Resources:

Materials List

Instructors will need to create decks of “business model component cards.” One deck is needed per team in the class. Each deck is comprised of nine index cards. On each card should be one of the nine business model components: customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partners, cost structure. Given that this is the actual order recommended by Osterwalder & Pigneur, it is important that the cards in the deck are not in this order. You may also want to have copies of the Business Model Canvas to distribute as well, but after the game. A copy of the canvas can be obtained at http://www.businessmodelgeneration.com/canvas.

The full text ‘Teaching Entrepreneurship: A Practice-Based Approach’ can be purchased here > http://www.amazon.co.uk/Teaching-Entrepreneurship-A-Practice-Based-Approach/dp/1782540695

References:

This exercise is taken from;

•Heidi M. Neck, Patricia G. Greene and Candida G. Brush, 2014. Teaching Entrepreneurship: A Practice-Based Approach (pp.136 – 138). Edition. Edward Elgar Pub.

Theoretical Foundations

•Osterwalder, A., and Pigneur, Y. 2010. Business Model Generation. Hoboken, NJ: John Wiley & Sons.