Never Send a Business Model Canvas to Your Investors

A canvas is a tool mainly intended for entrepreneurs to learn and articulate changes to their business model proposition. However, the process carries a risky element in it: exactly the canvas itself, as it appears with its building blocks, suggests potential narratives. Without the right contextualization, a shown canvas is like a cover of a business plan without its pages, which is worse than nothing, exactly because it may suggest things.

While the canvas process allows teams to craft a potential story, the story itself is not really told within its nine blocks. Have you ever felt that a great component of your business idea may in fact live between canvas T and T-1? What if canvas T is what your competition does and T+1 is what you want to do differently? Well, such important building blocks unfortunately may not be present in the most up-to-date canvas that you are trying to send.

Therefore, we must be critical when we send or present a canvas to anyone. First, let’s put ourselves in the shoes of the audience. You are now an investor, a partner in the team. Go out in the wild and pick a canvas of another business. Pick a case of a business that is known and successful. Did you get anything as you read through the building blocks? Do they make sense or do they tell the business model story? If yes, then try again, but this time, pick a case of another successful business, but one that you’ve never heard of before. Does it make sense? Now do the same kind of exercise, but this time, ask some other person to also do this on their own. Now compare both conclusions. Are your conclusions similar at all?

If you arrived at the feeling that someone else’s canvas did not make sense when you read it alone, and that it was missing a lot of contextual data in the narrative, then you have arrived at exactly the purpose of it: To be a tool and not carry the narrative.

The investor role in this essay is a critical mindset, an opportunity, or a reflection. We should put ourselves in the mindset of an audience that is interested in knowing the narrative, in understanding the risks with a truth-seeking mentality.

If we go back to seeing the canvas as a process, and look at it as a tool, it should better serve as a story builder, not as a storyteller. The core purpose of a canvas is to allow learning and to be a helping process in the evolution of a proposition. Going off of this premise, it follows that a business model canvas can even help a team to give up a proposition. When your team recognizes these nuances, your team starts to see the true potential of the canvas and how dangerous it can be when used irresponsibly.

The Business Model Canvas does not work for the idea

That is a point that many entrepreneurs get wrong — they forget that the canvas is a helping tool for their teams, not their ideas. They run into the narrative trap; as if the current state of their canvas is the last best revision of “The business”. The behavior of always looking to the current canvas can be the key to a disaster, exactly because it does not state the critical recent changes, the inflection points in the story, and so forth.

From a managerial perspective, working in a canvas may display similarities to crafting a report. As stated by Intel’s ex-CEO Andy Grove in High Output Management: “Reports are more a medium of self-discipline than a way to communicate information. Writing the report is important; reading it often is not.”

Earlier this year I had the privilege of observing multiple startup teams in an exercise supposed to help them. The instructor asked teams to modify their current canvases based on a given condition. The idea was to boost creativity via introducing some limitation to their stories. As I visited teams, I noticed that very few of them were actually changing their canvas. When I asked one of the CEOs why they were not adding/removing anything, his answer was that it was good enough already.

Perhaps the very merits of the tool’s simplicity were partly influencing them to evolve in one direction and to be trapped or locked into a given story line. But behind such apparent simplicity, the canvas is tricky because of its two components: it’s X, a tool for learning and Y, a tool for communicating a propositional business narrative. Because of these combined components, peers needs to master the nuances and indeed use canvases to narrate, but do it with proper contextualization. Otherwise their canvases can be a weapon being given without a manual.

When your team gets involved in making a lot of canvases, when they start moving towards a learning direction, keep in mind that any current version is not that relevant, especially when looked at it isolated from context. Much more important is the learning that your team arrived at that caused them to incorporate any change.

Are you using the canvas as an opportunity or are you using the tool to make a case of your biased views? Are you using the canvas for liberation or using it to lock a given narrative?