6 Most common Social Business Model Canvas mistakes
Errors to avoid when using the Canvas
Defining solid business models is usually among the most critical steps aspiring social entrepreneurs experience along their entrepreneurial journeys. In the last decade, a variety of tools has been developed to support this process. The Social Business Model Canvas is surely one of them. But what are typical pitfalls people encounter when using this tool? Today we break down the 6 most common Social Business Model Canvas mistakes and errors.
What is the Social Business Model Canvas?
The SBMC (Social Business Model Canvas) is a visual tool developed in 2013 by Social Innovation Lab. Building on Alex Osterwalder‘s original version, this Canvas can be used to both (1) describe business models of existing social enterprises and (2) ideate/design new social business concepts.
Thanks to its visual language, the Canvas enables teams to more easily discuss the main pillars of (future/existing) business models. Thus, it definitely comes handy all along the business model design process!
To get a better grasp of how the SBMC works, check this article to learn more about its structure as well as its key components.
Using the Social Business Model Canvas: mistakes and errors
Although it might seem easy to fill in the Social Business Model Canvas, mistakes occur to happen nonetheless. Eventually, an inaccurate use of the tool can lead the team to misunderstandings and frustration, just to name a couple of negative outcomes.
So, what are deadly errors when designing a SBMC? How to avoid them? Let’s find it out.
1st Mistake: Identifying generic targets
Once defined the social problem to tackle as well as the impact goal to achieve, identifying main targets comes immediately next. And by “targets” we mean both direct beneficiaries and main customers of the organization.
Often times, teams tend to describe targets way too broadly, lacking a clear segmentation. As a result, the Canvas gets filled in with vague words such as “businesses”, “children”, “families” and so forth. Eventually, identifying generic segments makes teams believe they should come up with value propositions able to please everyone. And they inevitably get stuck in the process.
To avoid that, teams should first conduct appropriate market segmentation, both for their main beneficiaries and their potential customers. Demographic, geographic, psychographic, behavioral segmentation.. you surely heard about that. So you already know what to do!
2nd Mistake: Being fuzzy about what the product/service is all about
The Canvas is not the “place” to use fuzzy words nor complex terms. Remember: the goal here is to help you laser-focus your value proposition and define the business model to build around it.
Nevertheless, teams frequently fail in providing a clear explanation of what their core intervention really is. Instead of taking this step for granted, teams should carefully address the following questions: “What’s our offer? A product? A service? A combination of both? And also, in what ways does it provide value to beneficiaries and customers? What kinds of pains does it alleviate? What gains does it generate? How?”
If team members doesn’t understand what you offer, well.. your target segments will likely do the same. Right?
3rd Mistake: Listing irrelevant channels
“..And then we’ll add a website and social media pages“. Boring, boring, BORING!
The “Channels” section of the Canvas is probably the most underestimated and mistreated one. As a matter of fact, channels are key to engage, communicate, sell and deliver to the audience. They are the actual enablers of the overall marketing strategy. Without them, it all vanishes into the blue.
Yet, teams usually seem not to dedicate too much effort in filling out this section. As a consequence, they end up listing a series of trivial, irrelevant touch-points. What you should do instead is to always think in a human-centric way. Mention only those direct or indirect channels that your target really loves, prefers or constantly uses. Those are the ones that truly matter for your go-to-market strategy and your business model!
4th Mistake: Providing numbers instead of cost/revenue structures
The bottom sections of the SBMC (“Cost structure” and “Revenue Engines”) should give a glimpse of how the organization is meant to remain viable and sustainable. As said, a “glimpse”, nothing more than that. Nonetheless, it often occurs that people start thinking – and talking – numbers while filling in these sections.
In our opinion, this is a huge mistake, since the Canvas is not the right tool for quantitative reasoning – you’ll have business cases, excel spreadsheets and financial plans for that! At this stage, stick to the core economic structure and answer these questions: “what are the main cost items (i.e. staff, materials, etc.)? And how to monetize from the core offering?”. And for once, let numbers aside.
5th Mistake: Mixing “as-is” and “to-be”
As previously mentioned, the SBMC can be used for both describing the status-quo as well as defining new business models. Organizations trying to innovate their current BMs frequently fill in the Canvas providing a combination of existing features and future ones. There’s nothing wrong with that, as long as it can be easily, clearly distinguished what’s already in place with what’s meant to happen in the future. A tip: consider using color codes for that.
6th Mistake: Forgetting to update it after they filled in once
Last but not least: filling in the SBMC is definitely not a “one-time-only” kind of thing. Yet, the majority of teams seem to think precisely that. After having used it once, they never look back at it and move on to the next stage.
What we recommend instead is to go back to the Canvas repeatedly, every once in a while, especially when you gather new insights or information likely to affect your business. Although it may sound boring (unless you’re a geek), fill it out over and over again, adjusting your BMs or designing more solid ones all while mapping critical assumptions that will later need to get tested out.
In this article, we discussed the most common Social Business Model Canvas mistakes and suggested ways to avoid committing any.
If you are interested to learn more on how to use the SBMC, feel free to reach out. More informative content is coming soon.. so, stay tuned 🙂
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