Apr 10

Apr 10 BMC Part Seven: Key Activities

(If you’re using the Canvas, you’ll love my free Business Modelling eBook, full of tips for inventing and testing ideas that will change the world)

We’ve made a lot of promises by this point:
"We’ll acquire 100 customers a month”
“We’ll deliver a top quality service”
“Our staff always go the extra mile”
“We’re going to keep innovating”
“We’re going to hire an elite team and grow quickly”

Yes, they’re all good things.
The question is, what needs to get done in a typical week in order to keep the model running?

How will you and your team spend your time?

Chasing customers?
Manufacturing a product?
Delivering a service?
Managing a network of contractors?
Delivering stock to other stores?
Operating your own sales channels?
Partnership brokering?
Recruiting new team members?

You’ll note that there are a lot of things to be done, and not a lot of space in the Key Activities box.
That’s no accident.

David Ogilvy said “Strategy is sacrifice”.
Our job as entrepreneurs is to decide which activities we won’t do, in order to really maximise the ones that are most important.

For example, IKEA focus relentlessly on minimising their production costs, and spend almost no time on assembly.
This is also critical to the success of their value proposition.

Nespresso spend their time running their own sales channels, and no time growing coffee or manufacturing machines.

Netflix focus on creating original content, not on shipping DVDs to customers like they used to. This has been made possible by increased internet speeds.

Thank You don’t run their own shopfronts, instead partnering with 7-11 and major supermarkets. For Thank You, the most important activities are creating a great brand and developing new product lines that their customers will love.
They also don’t manufacture anything themselves, with third parties handling the production of each bottle/box.

Airbnb spend their time coordinating two sides of the market – their renters and their hosts.
That means prioritising their customer experience and their advertising, but they don’t maintain or refurbish any property themselves.

The question is, which activities can’t be easily substituted?
Every company does some accounting, but accounting isn’t generally a key activity – unless you’re an accounting firm.

The same goes for recruitment, cleaning, advertising and running events.
The things to list are the activities that must be done to a 5-star standard in order for your value proposition to be possible.

Four questions for your business