Hack your business model with strategy.
In our last post, we discussed embedding and leverage.
As a follow-on, I’d like to share how we can use these concepts to build moats, using the famous business model canvas.
If unfamiliar with the canvas, you can download it from Strategyzer, or order the bestselling book.
Essentially, the canvas provides a template to map out the 9 building blocks of your business.
There are millions of combinations, and thousands of effective ones, so where does one start?
I’ll argue you should start with strategy.
In our featured image, you’ll see our embedding and leverage moat-builders mapped to their respective building blocks.
And I propose you attempt to optimize each block for each goal.
However, optimizing is not maximizing.
Tradeoffs will likely mean that you’ll need to – after considering the environmentals and competition – spike (aka stand out) in one or two of these blocks.
The key questions, as you brainstorm, will be to determine which embedding tactic could and should you spike on (network effects, brand loyalty, switching costs) and how will that choice allow you to grow the fastest — and which leverage tactic could and should you spike on (systems of intelligence, IP/talent, cost advantage, higher prices) and how will that choice allow you to achieve your optimal profitability?
Starting here focuses our efforts for building economic moats from the start, instead of just filling in the blocks and considering strategy later.
Your turn.
Now go spark that revolution.