Alexander Osterwalder gave a very instructive talk on the Tools for Business Model Generation for the Entrepreneurial Thought Lecture course this week at Stanford. The key element of business model generation is the canvas. The canvas is semi-graphical way of mapping out key segments of the model to show the relation between them. The segments include:

• Value proposition
• Customer segment
• Revenue streams
• Customer relationships
• Channels
• Key activities
• Key resources
• Cost structure
• Key partners

This canvas and model are a powerful way to conceptualize a new business or old one, and can be used to develop strategies so that all segments contribute to the value proposition. Steve Blank shows up in the middle which was a nice surprise. Alexander then explains how to work out the relation between the customer and the value proposition to make sure that they fit together in a quantitative way.