Business Model Canvas
What is the Business Model Canvas?
The Business Model Canvas is a visual tool created by Alexander Osterwalder that helps teams think through and communicate the key elements of a business model on one sheet of paper. It defines nine key elements—value propositions, customer segments, customer relationships, customer channels, key partners, key activities, key resources, revenue, and cost—and displays them visually to help teams see important connections.
Before this tool existed, most people would have mumbled something about "how a business makes money" when asked about business models. But that's a revenue model, not a business model. The canvas helped clarify that a business model encompasses much more than just revenue.
What are the nine elements of the Business Model Canvas?
The canvas organizes a business into nine interconnected components. On the customer side, you have customer segments (who you serve), customer relationships (how you interact with them), and customer channels (how you reach them). These connect to your value propositions—what you offer to each segment.
On the operational side, you have key partners (who helps you), key activities (what you do), and key resources (what you need). All of these elements connect to the financial elements at the bottom: revenue streams and cost structure. The visual layout helps teams see how customer-facing elements impact revenue and how operational elements affect costs.
How do product teams use the Business Model Canvas?
The canvas serves multiple purposes for product teams. When evaluating a new business idea, working through each element forces you to think beyond just the product to how the business actually works. It's one of the best tools for thinking through whether your idea is a viable business.
Product people can also use it to understand their current company or evaluate potential employers. Diagramming a company's business model reveals what kind of company it fundamentally is and where the top-down incentives lie—helping you understand whether they're truly product-led or if tech is just window dressing.
Learn more:
- Is Your Idea a Viable Business?
- Why Drawing Maps Sharpens Your Thinking
Related terms:
- Viability
- Customer Value
- Business Outcome
Last Updated: October 25, 2025