Introduce your students to idea creation and business model development using the Business Model Canvas, while you stay in control and guide them past common misconceptions with the Canvas.
By Torgeir Aadland, Associate Professor, NTNU
About the exercise
This is a discussion-based exercise designed to introduce students to business models and business model design. The exercise promotes learning through several examples, and the discussion-based teaching enables the students to follow along. It also includes an open-ended idea creation brainstorm, and the opportunity to let students make a “quick and dirty” assessment of their ideas. The exercise could either be the students’ first encounter with Business Models and the Osterwalder Business Model Canvas (BMC), or as a follow-up after an introductory lecture on business models.
The BMC is a valuable and common tool for entrepreneurs to define a business model. However, it is not self-explanatory for students with little entrepreneurial experience – they could get confused when trying to understand and use the canvas on their own. This exercise puts the educator in control to prevent misconceptions while students define different aspects of the business model.
The exercise fits multidisciplinary students at any level of higher education – one could even use it in shorter “hackathons” or projects. It could be used to help students understand the concept of business models at an early stage – for instance before or just after an introduction to business models and the BMC. The exercise would work best with classes of 20-40 students, to have time to include everyone in the discussion.
Digital version: You can do this exercise digitally, using breakout rooms. However, this might require more attention to include all students in the discussion.
- Understand and strategize on important elements of a business and its business model
- Understanding the BMC, and using it in an early-stage idea process
- Using the Business Model Canvas (BMC) as a tool to evaluate an idea at an early stage, involving important aspects of the potential business
- Idea creation and brainstorming
Materials list and physical space
– A green object or picture of a green object. The image could be of an actual product – like the downloadable image below, or an object with an abstract shape or simple shape.
– A blackboard, flipboard or similar to list ideas
– A printed or digital version of the business model canvas
Classroom with group setup, for groups of 3-5 students.
Pre-work required by students
This depends on how you structure the topic – the exercise is designed to be the students’ first encounter with business models as a concept and the BMC as a strategic tool. However, you could also choose to through an introduction in a lecture before the exercise, or have your students read up on the basics of business models and the Business Model Canvas in advance.
- Osterwalder, A., Pigneur, Y. (2010) Business model generation: a handbook for visionaries, game changers, and challengers. John Wiley and Sons, Inc., Hoboken, New Jersey.
- Morris, M., Schindehutte, M., & Allen, J. (2005). The entrepreneur’s business model: toward a unified perspective. Journal of business research, 58(6), 726-735.
Step 1: Idea generation for the Green Thing (5-10 minutes):
The educator shows the student groups a “Green object”, using an image or physical object. The students are asked to come up with ideas for products or product-service combinations for this object, which is green and can make sounds.
Some classes might be very conventional, only coming up with simple products like “better loudspeakers” or “a better radio”. If you want to avoid this, say that ideas like this aren’t creative enough before starting the brainstorm session.
Step 2: The classroom idea list (10 – 15 minutes, plenary):
The educator asks the students to share some of the ideas that came up in the group, listing the ideas on a blackboard.
Step 3: Plenary Business Model discussion (45-60 minutes, plenary):
Students and the educator discuss and outline a potential business model around one idea from each group, using a printed or digital version of the Business Model Canvas (link). Each group are asked to select one of their ideas, and the educator ask questions related to different parts of the canvas in plenary with one group at a time, relating to their idea. The aim is to discuss through important elements of the potential business, and lastly have groups evaluate whether the idea has merit, based on the developed business model. The Educator drives the discussion forward, asking specific questions related to each part of the Business Model Canvas:
- Who would use the product/service, and who would pay for it? (users/customers)
- What could be the value proposition of the product/service?
- Channels: Manufacturing, distribution, sales, marketing
- How would we establish relationships with potential customers?
- What resources, partners and activities would we need to deliver the product / service?
- What would be the important revenue streams and cost factors of the potential business? – Could this be a viable business idea? Why / why not?
It is smart to decide in advance what level of detail you want from your students in this exercise. Too much detail could be confusing and too little gives a lower learning output. You could highlight a few important topics for the first couple of ideas, and then gradually introduce a few new details with the subsequent ideas. If you know the students and their mindset, it would be a good idea to outline a few key points before the exercise that you want to highlight at the start of the discussion. As an example, technology-oriented students could downplay the importance of marketing/sales – then you might want to draw their attention to those aspects.
You can for instance use examples of known businesses and their activities to illustrate topics your students may not understand or agree with.
Students learn more about important aspects of business models, and how to use the Business Model Canvas at an early stage. They start seeing different aspects of a business, and the relationship between them. The exercise also lets students practice their ability to develop creative ideas, and use business model aspects as a way to give an early-stage assessment of the idea.
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