20-Minute Business Model?

By Rolfe Larson on September 21, 2012

The drive to create a business plan in the least amount of time has reached a new high … or low.  Last week, Inc. 5000 published an article suggesting you can and should be able to present your entire business model on paper in (gulp) just 20 minutes.  The idea is from a recent book, Running Lean: Iterate from Plan A to Plan that Works, by Ash Maurya.

Here are her nine key elements that she suggests you can lay out clearly on one page of paper in 20 minutes:

  1. Problem we’re trying to solve
  2. Target customers and users
  3. Our unique value proposition
  4. Our solution
  5. Channels
  6. Revenue streams
  7. Cost structure
  8. Key metrics
  9. Our unfair advantage (can’t be easily copied)

I think this can be a useful exercise, but I’m not convinced it’s a good way to develop a new business or clarify an existing one.  In my experience, that takes time, research, and analysis.  But this can be a good mechanism for summarizing what you do know, and identifying where you need to find more information and build a better understanding of your business.  In other words, as you work through your business plan, or as you take a quick look at an operating business at any point in time, it would be good to try to summarize in this manner.  Just be sure that what you’re summarizing is based on real research and real understanding, not just hopes and preferences.

And one not so small nitpick about the model.  None of the nine elements mentions competitors or competitive environment.  Really?  I don’t think you  can understand your core business model until you can clearly articulate who or what you’re competing against, and what your competitive strategies are relative to those key competitors.

So don’t throw away your big ‘ol business plan (you know, the 5-7 page one I wrote about in an earlier blog), in favor of a one-pager says it all business model.  To understand things you need to really understand them through solid research and analysis.  And if at the end of that work you can summarize your core business model in 20 minutes on one sheet of paper, more power to you.  As long as you’ve done your homework…..

Good luck!

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For more resources, see our Library topic Business Planning.