3 Business Models
Learn how a venture creates, delivers, and captures value, and how its customers, operations, resources, partners, revenue, and costs fit together.
The purpose of a
A is a practical description of how a venture works. It explains how the venture creates value for customers, delivers that value, and captures value for itself. It is more than a description of a product or a plan to make money: it connects the offering to the work and resources required to provide it, and to the venture’s revenue and costs.
Create, deliver, and capture value
The three parts of a are connected. The venture identifies the customers it serves and the problem or need it addresses; determines how its offering reaches those customers; and describes how it receives value in return and what costs it incurs.
Create value: Identify the customers served and the problem or need the venture addresses. The describes the expected customer benefit and why the offering may be useful.
Deliver value: Explain how the offering reaches customers. This includes , customer relationships, and the activities, resources, and partners needed to serve them.
Capture value: Describe how the venture receives value, typically through , and the costs it incurs. Revenue must be considered alongside costs; sales alone do not establish that the model is financially sustainable.
These parts depend on one another. For example, changing the target customer may require a different , channel, set of activities, and cost structure.
Activities, resources, and partners
are the most important things a venture must do to make its model work. Depending on the venture, they may include designing a product, producing it, operating a digital service, marketing, or handling customer support.
are the essential assets and capabilities that make those activities possible. They may include people and expertise, equipment, technology, intellectual property, data, a brand, or financing. Key partners may supply resources or perform activities that the venture does not handle itself.
To identify what matters, ask which activities and resources are necessary to deliver the , reach customers, and earn revenue. Focus on what is essential rather than listing everything the venture owns or does.
Example: a weekly meal-kit service
A weekly meal-kit service might serve busy households with a of convenient, pre-portioned ingredients and recipes. It creates value by selecting recipes and assembling kits, delivers value through online ordering and home delivery, and captures value by charging customers per box or through subscriptions.
Its could include menu planning, ingredient sourcing, packing, and delivery coordination. Its could include recipe expertise, supplier relationships, ordering software, and packing facilities. Ingredient, labor, packaging, and delivery expenses are important costs.
If delivery costs are too high, the venture might adjust its delivery area, partner with a delivery provider, change its pricing, or redesign how often it ships. Each choice affects other parts of the model, so the venture should assess the whole system rather than treat revenue, operations, and customer value as separate issues.
Mapping the model with a canvas
The is a one-page tool for describing nine connected elements:
Customer segments
Value propositions
Customer relationships
Key partners
Cost structure
The canvas helps make a venture’s assumptions visible and show how its customer-facing parts connect to its operational and financial parts. It presents the as a connected system rather than a disconnected list of components.