Extending the Business Model Canvas: A Dynamic Perspective
Boris Fritscher
1
and Yves Pigneur
2
1
HEG-Arc, HES-SO // University of Applied Sciences Western Switzerland, 2000 Neuchâtel, Switzerland
2
Faculty of Business and Economics, University of Lausanne, 1015 Lausanne, Switzerland
Keywords: Business Model Canvas; Computer-Aided Business Model Design; Guidelines.
Abstract: When designing and assessing a business model, a more visual and practical ontology and framework is
necessary. We show how an academic theory such as Business Model Ontology has evolved into the Business
Model Canvas (BMC) that is used by practitioners around the world today. We draw lessons from usage and
define three maturity level. We propose new concepts to help design the dynamic aspect of a business model.
On the first level, the BMC supports novice users as they elicit their models; it also helps novices to build
coherent models. On the second level, the BMC allows expert users to evaluate the interaction of business
model elements by outlining the key threads in the business models’ story. On the third level, master users
are empowered to create multiple versions of their business models, allowing them to evaluate alternatives
and retain the history of the business model’s evolution. These new concepts for the BMC which can be
supported by Computer-Aided Design tools provide a clearer picture of the business model as a strategic
planning tool and are the basis for further research.
1 INTRODUCTION
Competition for companies and start-ups has evolved
in the past decade. Today, success cannot be achieved
on product innovation alone. At a strategy level,
having the means to improve the design of business
models has become a real issue for entrepreneurs and
executives alike. Business models methods are a good
way to share a common language about part of a
strategy across a multidisciplinary team. These
methods enable quick communication, and help
improve the design of a new business model, as well
as assess existing ones.
There are many different business model
ontologies which focus, for example, on economics,
process, or value exchange between companies. One
such business model tool which is getting popular is
the Business Model Canvas (BMC) (Osterwalder &
Pigneur, 2010). Its visual representation and simple
common language are two essential characteristics
which have helped spread its adoption and make its
book a bestseller. The current version of the BMC is
an evolution from the original academic work the
Business Model Ontology (BMO) (Osterwalder,
2004). The need to evolve the model took place to
better fit the needs of practitioners over academics.
The visual representation was improved under the
influence of design thinking practice.
Through observation gained from, giving
workshops, teaching to students and a survey, it
appears that the building blocks of the BMC are
covering the main needs, however usage itself of the
model seems very basic and is limited to static
analysis of one business model at a given time. This
can be linked back to its original ontology which is
used to describe a static model.
In reality, companies have to change and adapt to
internal and external changes which impact their
business. Therefore, a business model method should
also consider the dynamic nature of transformation
and evolution of the model.
This brings us to the following research question:
How to represent and help to design the
dynamic aspect of a business model with the
Business Model Canvas?
Before answering the question we provide a
detailed history of the transformation of the BMC and
provide some lessons learned for business model
designers. Then in order to answer the question we
first contribute to a definition of the maturity level of
BMC users. Based on the three identified levels:
novice, experts and master, we split the main question
86
Fritscher B. and Pigneur Y.
Extending the Business Model Canvas - A Dynamic Perspective.
DOI: 10.5220/0005885800860095
In Proceedings of the Fifth International Symposium on Business Modeling and Software Design (BMSD 2015), pages 86-95
ISBN: 978-989-758-111-3
Copyright
c
 2015 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved

into three sub questions. For each, we contribute to a
concept on how to handle a particular dynamic aspect.
On the first level, the BMC supports novice users
as they elicit their models; it also helps novices to
build coherent models. On the second level, the BMC
allows expert users to evaluate the interaction of
business model elements by outlining the key threads
in the business models’ story. On the third level,
master users are empowered to create multiple
versions of their business models, allowing them to
evaluate alternatives and retain the history of the
business model’s evolution.
We adopted the following design science
structure for our paper: After this introduction, we
present the prior work on the business model canvas
with a focus on its origin, evolution and adoption.
Followed by a short presentation of the methodology
and how we address the research question in multiple
parts. The main artifact section presents two new
concepts: business model mechanics and business
model evolution, to help address designing the
dynamic aspect of a business model. In the evaluation
section we present the validity of the concept. We end
the paper with a discussion and a conclusion on the
implications for future research in business model
design.
2 PRIOR WORK
In this section we present the origin of the business
model canvas and how it evolved through the years
influenced by its adoption. Business model ontology
has evolved since its initial design. Retrospectively,
we can distinguish there distinct stages: 1) the
creation of Business Model Ontology (BMO), 2)
followed by its first confrontation with reality, 3)
which then paved the way for its design-influenced
redevelopment.
2.1 Business Model Languages
Whilst many other business model languages exist,
this paper does not include a detailed comparison of
them. We have, however, sought to highlight the
differences between Business Model Ontology
(BMO) and its closest alternatives. Starting around
the same time as BMO, e3-value (Gordijn &
Akkermans, 2001) includes many similar concepts,
many of which can be mapped between them
(Gordijn, Osterwalder, & Pigneur, 2005). In
particular, e3-value goes into more detail about the
interactions between the components. In addition, it
specifies the value which is exchanged in both
directions and the way in which it flows. Using e3-
value, it is possible to go beyond creating a single
business model; indeed, it is also possible to model
the interactions between business models within a
sector. This detailed modeling of interactions comes
with the necessity to specify ports through which the
connections flow. Consequently, this makes visual
representation more complex. The relationship
between elements can further be described with types
and values that allow for the basic financial
calculation of the model.
Whilst BMO is concerned with providing a small
but complete set of strategic components to describe
a business model, another modeling language, known
as SEAM (Wegmann, 2003) also exists. SEAM
focuses on enterprise architecture and addresses the
issue by providing a hierarchical decomposition. It
uses a visual representation to handle the
encapsulation of its hierarchies, which allows an
exploration of the underlying resources and processes
that contribute to the high level element. In the past
few years, SEAM (Golnam, Ritala, Viswanathan, &
Wegmann, 2012) and BMO (Osterwalder, 2012) have
both evolved ways to better describe and explore the
connection between the value proposition and
customer segments. An essential part of both models
is to be able to visually display the elements and show
their connections at the same level as the concepts.
The visual handling of encapsulation does, however,
generate complex diagrams, which can be hard to
read for the non-initiated.
Weill and Vitale (2001) illustrated a method for
the schematic description of e-business models. The
focus is on the simple interactions between the firm
and its customer and suppliers, which are drawn on a
blank canvas. An indication of the direction of
interactions is given, along with the type of flow.
Thus, it adds value to an interaction in a way that is
similar to e3-value; however, it is more general since
it does not define ports or go into more detail about
the flow itself.
2.2 2000-2004: Business Model
Ontology
The development of BMO emerged from the need to
define new business models for e-commerce around
the year 2000. Following academic research, a first
version of BMO was published in 2002 at the 15th
Bled Electronic Commerce Conference by
Osterwalder and Pigneur; it took the form of a
framework that was specially targeted at e-
businesses. Over the next two years, the work further
matured, resulting in the publication of Alexander
Osterwalder’s thesis (Osterwalder, 2004) in which he
described the key building blocks and their
interactions. The model was presented as an ontology
Extending the Business Model Canvas: A Dynamic Perspective
87

with elements of the modeled case becoming
instances of the meta-level elements defined by the
ontology.
Business Model Ontology in its original version
uses nine building blocks to describe a business
model: Value Proposition, Customer, Channel,
Relationship, Revenue, Value Configuration,
Capability, Partnership, and Cost. The model’s scope
is limited to the business itself and does not directly
cover any environmental factors. Its key strength is
the emphasis it gives to the relationship between the
components. A coherent business model is created by
correctly connecting elements from within the nine
building blocks. Exploring these connections can help
to identify missing elements or discover ambiguous
assumptions within a model. In summary, BMO
focuses on identifying what is provided to whom,
how it is produced and how much profit it generates.
2.3 2004-2008: Use and Simplification
Following its academic publication (Osterwalder,
Pigneur, Tucci, 2005) the model was used in two
different contexts between 2004 and 2008. It was
applied to tutorial cases delivered to IS students; thus,
it was simplified, but still used in an academic
context. The model was also used with practitioners
in workshops and consulting sessions. Here, the
model was applied to actual business problems in
order to gain an understanding of how the model is
used within a wide spectrum of business types,
beyond just e-business models. Both of these
applications sought to constraint the model as a one-
page diagram. Special positioning was used to
identify the type of each element and best practice
was further strengthened by using keywords to
describe each element. The changes were not only
visual; the names of some of the elements themselves
were also changed to better fit the vocabulary of its
users. The nine names are: Value Proposition,
Customer Segment, Distribution Channel, Customer
Relationship, Revenue Stream, Key Resources, Key
Activities, Partner Networks, and Cost Structure.
2.4 2008-2012: Business Model Canvas
Insight gathered during the previous years and the
emergence of a small community around Alexander
Osterwalder’s blog led to the creation of a book
project to communicate the result of these
transformations. Convinced that the visual aspect of
the model is a key component and largely influenced
by the design-thinking movement and “managing as
designing” (Boland & Collopy, 2004), the book was
intended to offer a visual perspective. In turn, this led
to a designer being brought on board to redevelop the
layout of the canvas so that it became the Business
Model Canvas (BMC) we know today. New features
include the pictograms that illustrate the nine building
blocks from the theory, their rectangular layout and
an axis of symmetry around the value proposition
(left side, right side). By providing examples from
different industries, the book project further helped to
crystalize the ideas on the usage of the BMC. In
particular, it showed how the BMC can integrate a
design-thinking process and explored the notion of
partial meta business models known as patterns
(Osterwalder & Pigneur, 2010).
To strengthen the link between theory and
practice, the book was written in collaboration with
the community. This was done by setting up a
community hub with forums. Early drafts were
published on the hub for review by subscribed
members. This created a following of those interested
in business model generation and further helped to
promote the book. Many followers also put business
model generation into practice, which eventually led
to its success. From the start, the community was
global in nature. Now, with many translations of the
book made available, it is expanding even further.
Teaching of the BMC has been adopted by
managerial and entrepreneurship courses in over 250
universities. In turn, this has increased adoption.
Furthermore, there has been a steadily increasing
number of workshops and consultant-led master
classes, as well as internal education programs in
large corporations.
Since the release of the book Business Model
Generation in 2010, adoption of the BMC has grown
to become a worldwide phenomenon: the original
community hub of 400 people which helped create
the book has grown to 14,000 members. The book
itself has been translated into 29 languages and sold
over 1,000,000 copies. Other communities, such as
Customer Development (Blank & Dorf, 2012), have
started using the BMC as a supporting model for their
theories.
3 METHODOLOGY
In this study, we used Design Science Research
(DSR), as described by (Gregor & Hevner, 2013).
They defined a process in which artifacts are built and
evaluated in an iterative process in order to solve the
relevant problems. The need to take a visual approach
to creating the BMC was driven by design-thinking
theories and we identified need for practitioners to
have better tools that can be easily integrated into
daily practice. Existing knowledge of business model
ontology has been described in the previous section.
It was shown that Information Systems (IS) has the
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necessary body of knowledge to handle “strategizing
as designing” (Osterwalder & Pigneur, 2013).
3.1 Users Maturity Level of Business
Model Canvas Modeling
The BM canvas was evaluated using data and
evidence from its use in the real world, books, canvas,
hub, and the workshops and lectures that were used to
inform the following three maturity levels inspired by
the Common European Framework of Reference for
Languages (CEFR), which also has three groups.
Novice – use the BMC as a simple common
language and visualization help.
Expert – use the BMC as a holistic vision to
understand and target a business model’s
sustainability. They understand the model’s methods,
such as high level links and colors, which helps to
connect ideas and follow the interactions.
Master – use the BMC in the global Strategy,
which is a process that evolves and adapts to its
environment. They understand that the design of a
model has to accompany such a process by supporting
concepts of iteration, transformation (mutation) and
choosing alternatives (selection).
Having defined these three level of proficiency we
use it to decompose the research question into three
sub-questions:
Novice level usage is the most commonly
observed and fully applies to the static use of the
BMC. Before moving to a dynamic representation of
a business model, it should be guaranteed that at a
static level it is already a coherent model. Which
leads us to the following sub-question:
How can the static design usage of the business
model canvas be improved (in relation to its
coherence)?
Expert and Master level design of BMC are not
observed frequently and lack representation due to
their requiring a more dynamic aspect of the BMC.
For the expert with a focus on internal interactions
this leads us to the following sub-question:
How to represent the dynamic aspect of
interactions happening inside the business model?
Handling multiple states of a business model, due
to internal or external changes, at the master level
leads to the following sub-question:
How to represent the transformation from one
state to another of a business model?
In the next section, we address these questions
individually each with their own artifact.
4 ARTIFACT
In the next three subsection we consider each
business model canvas design task of each mastery
level by looking first at a metaphor of a similar design
task in another design domain. Transposing the
metaphor of house planning in architecture, plane
building in engineering and evolution in biology to
business model designing, we propose a concept to
help answer each sub question. Each level builds on
the previous and comes with their respective concept:
BM Canvas Coherence, BM Mechanics and BM
evolution, to address the dynamic nature of business
models. We then illustrate how each concept applies
to a small common example: the case of Apple’s iPod
business model. Each Artifact also describes in a
short summary the essence of the mastery level to
further offer a clear way to differentiate the three
levels.
The following three concepts are presented below:
BM Canvas Coherence helps the novice to
improve static business model modeling by way of
using guidelines to check coherence of the business
model.
BM Mechanics helps the expert by proposing to
use colors and arrows to outline the interactions
happening inside the business model.
BM Evolution helps the master by offering a way
to visualize business model transformation from one
state into another. Applying these transformation
multiple times results in a branch showing the
evolution of the business model.
A mapping between level and concept can be seen
in table 1.
4.1 BM Canvas Coherence
At the novice level, the focus is on the concepts of the
ontology, meaning the nine building blocks that
define a business model. The main task consists of
designing a business model by filling in elements for
each block. Designing a business model can be best
described using the metaphor of an architect engaged
in designing a house. The architect needs to know
about the various components of a house, such as the
walls, doors, windows, roof and stairs, and also how
they relate to each other. A wall can have windows
and doors. A room has four walls with at least one
door. Beyond such constraints, however, the architect
is free to produce a variety of designs for a house.
During the design process, the architect puts forwards
his ideas using sketches and prototype models. These
prototypes are not finished products, but are
specifically aimed at testing the interaction of a
selection of concepts in the specified context of the
Extending the Business Model Canvas: A Dynamic Perspective
89

prototype. Transferring this design technique to a
business model design means creating different
business model variations of component interactions.
For example, when prototyping a specific customer
segment, the value proposition set could have its
revenue stream type switched from paying to free, or
from sales to subscription. This could then lead to
further prototype changes to dependent components.
This iterative validation of ideas leads to a business
model that has all its components matching to become
a “usable” business model. Checking the coherence
between the elements is a key requirement for a valid
business model. It is not enough to only produce a
checklist of items without verifying their
compatibility. Again, with reference to our
architecture metaphor, stairs should be used to
connect floors, and a door should lead to a room
rather than nowhere. We call this “usability”.
Similarly, in a business model, a value proposition
needs to offer added value to a customer segment
requiring it. A value proposition without a customer
segment indicates a non-coherent business model.
The iterative validation of design ideas can go as far
as “getting out of the building” and test the
assumptions directly with the potential customer as is
done in Customer Development (Blank & Dorf,
2012). The gained insights may help to validate the
hypothesis of the prototype or else offer new ideas to
make a pivot of the model to target different
customers.
In order to facilitate the checking of coherence,
there are a series of guidelines which we have
proposed to help validate the business model’s
elements and interaction (Fritscher & Pigneur 2014c).
They are split into three categories from element, to
building block and interactions:
Guidelines applying to individual elements for
example that the meaning of the element is
understandable by all stakeholders.
Guidelines applying to individual blocks for
example that the detail level of the elements are
adequate (there are not too many detailed elements,
nor too few which are too generic).
Guidelines applying to connections between
elements in different blocks for example that there are
no orphan elements: all elements are connected to
another element (in a different block to themselves).
4.1.1 In Summary
At the novice level, the concepts of the model identify
the right elements and how they are related to one
another. An iterative process that explores detailed
features of the elements helps to adjust the elements
that make up the model in order to solve real
problems. This leads to a coherent model that
addresses the right job.
4.1.2 Apple iPod BM Canvas
In this example, we focus on Apple’s iPod business
model. A model can be described by its elements,
with keywords for each of the nine building blocks.
Alternatively, illustrations can be used, as shown in
Figure 1. The value proposition is a seamless
experience that includes listening, managing and
buying music. It is targeted at consumers who want to
listen to music wherever they go and have access to a
computer. The distribution channels to reach these
consumers is a store or online-shop where the device
can be bought along with iTunes software to manage
the music library. Sales of the device generate
revenue with higher margins than sales of the songs,
where most of it goes to the majors. The customer
relationship is oriented towards the lifestyle
experience of Apple products. In order to offer these
services, the key activity is the design of the device.
Key resources are the device itself, music contracts,
the developers and the Apple brand which strengthens
the customer relationship. Marketing and developers
are the key cost structures. Music licensing and
device manufacturing is carried out through the
partners.
This business model slice is coherent since as
described each element is connected to another. There
are no orphan elements, nor any combination of
elements not connected to the rest of the business
model.
Figure 1: Apple iPod BM Canvas ©XPLANE 2008.
4.2 BM Mechanics
At the expert level, knowledge about the BMC and
the requirement to design a coherent model is well
incorporated into practice. The focus is on analyzing
the interaction of the model’s elements beyond the
relationships between them. It is not just about how
one element relates with its connected elements, but
about how they contribute to the overall thread of the
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business model story. A chain of interactions must be
built from one element to another throughout their
relationship. To continue with our comparison with
other design domains, we move from architecture to
engineering, where it is not enough to just know about
the concept. An engineer needs to know about the
underlying physics that supports the concepts. For
example, it is not enough to know about the concepts
that make a plane; we also need to know about their
interactions. Without knowing how the aerodynamic
properties of a wing generate lift, it would be
impossible to design a plane that flies. Trial and error
with prototypes that are not based on physical
calculation would result in a large number of failures.
What’s more, the end result could not be explained
fully. Similarly, in the design of business models, the
activity has to move beyond prototyping and try to
simulate the model to see if it is “workable”. A good
business model needs to both do the right job and be
sustainable. Business model mechanics, outlines how
elements influence each other beyond their
relationship. The story can illustrate the flow of the
exchange value between customers and the product
and how it is produced. It is about understanding the
underlying interactions which make the business
model possible. In this context, explaining a revenue
stream can for example depend on a partner (a
relationship which is not defined in the basic
ontology). These connections can be drawn using
arrows at the top of the canvas to show the story.
Elements can also be added to the canvas one after
another while telling the story; this helps to
strengthen the illustration. Another way to highlight
the connectedness of elements is to use colors.
4.2.1 In Summary
At the expert level, the business model concepts of
the canvas are well understood, and analysis has
moved beyond the elements towards the interactions
based on their relationships. The business model is
coherent and does the right job. Above all, the
interactions needed to make it work are understood.
Thus, the model is the right one and has the potential
to be sustainable if implemented correctly.
4.2.2 Apple iTunes BM Mechanics
In the case of the Apple iTunes, two stories can be
identified (see Figure 2): the music part (shown using
dotted lines), and the device (iPod) and brand part
(shown using dashed lines).
In order to make the platform attractive, Apple
had to offer a broad selection of titles, including all
the popular songs. This was achieved by making deals
with all the big majors. Skill and leverage were
required to be able to make deals which will make the
platform competitive on pricing and title selection.
Initially, to get the majors on board Apple added
Digital Rights Management (DRM) to protect the
digital music files; this had the side benefit of locking
the user in to Apple’s devices and software platform.
On the device side, functionality and esthetics had
to be combined in the design activity to create a
product which is in line with the customers’ brand
expectations.
Figure 2: Apple iPad BM Mechanics adapted from
©XPLANE 2008.
4.3 BM Evolution
At the master’s level, any considerations go beyond
the current business model. Masters are not afraid of
the unknown and are ready for anything. There is an
understanding that the strategy has to have a longer-
term vision that extends beyond the current business
model, and that to survive, it has to be able to evolve.
The focus is on actions that can be taken to evolve
from one business model to another. In order to be
aware of incoming changes, observation of the
business model’s environment is key. Our
architecture and engineering metaphor has its limits;
indeed, we would need to use analogies from the
realm of science fiction to illustrate transforming
behaviors. Therefore, a better analogy is the concept
of biological evolution. Individual business models
can become obsolete and die off; however, the
“species” evolves and survives through mutation and
selection. This means that in order to survive decay,
new business models (mutations from existing ones)
have to be tested continuously. When proven
successful, they are selected. Sometimes, the previous
business model might even be cannibalized by it.
A business model can do the right job and be
sustainable and still fail if it is not adapted to its
environment. Unlike our biology analogy, the
variations of a business model can be planned so that
it can be ready to adapt when the environment
changes. This involves planning different business
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91

models for a range of scenarios (Schoemaker, 1995)
and then being ready to switch to them depending on
the environment. The adaptability of a business
model to its context is key.
Various external occurrences may affect the
business model at any time; thus, different
alternatives need to be kept should one of them
become a reality. Keeping track of the mutation in
relation to external stimuli necessitates the
management of different versions of the business
model. The creation of multiple versions of a business
model to address different external environments is a
first step. Another step is to know how to adapt from
one version of a model to another. In this case, the
transformation between them needs to be highlighted.
For that purpose, we propose to use the concept of
transparent layers to stack business models parts on
top of each other. On paper this can be done with
tracing paper, each new layer can show new elements
and reuse of element which are visible in a semi-
translucent fashion from lower layers.
Together, the two steps allow us to evaluate a
model in the light of external factors, thus enabling us
to select the business model that fits best.
The combination of multiple transformation from
a given state help form a graph or a tree with branches
of possible evolution paths to follow for the future
business model. As well as to visualize the past
transformations which lead to the current state of the
business model.
4.3.1 In Summary
At the master’s level, business model concepts and
interactions (story) are well understood, both in terms
of a single model and the analysis of multiple models.
Decisions are made with the environment in mind in
order to deploy the right model in the right context.
Using this strategy, business models can be evolved
to adapt to any change.
4.3.2 BM Evolution: From Apple iTunes to
Apple App Store Business Model
The transformation from a music service to a software
platform has many innovation drivers. A major one
which can be highlighted in Apple’s case was their
capability to create a touch-based screen for a phone
device by combining new external technology (touch
hardware) with internal knowledge of the design of
human friendly interfaces (custom software).
To create the App Store business model (seen in
Figure 3), Apple evolved their iTunes business model
by reusing existing components, expanding others
and adding new ones. Apple capitalized on its
knowledge of design, value chain management and
store to build and distribute a new touch based phone
(iPhone). New components included the extension of
the distribution channel to also include the new
partner, the mobile phone operators. Taking
advantage of their knowledge of building software
development kits for computers, Apple created a
development kit for the phone which is targeted at a
new customer segment of developers to create mobile
apps. To manage the quality of these apps and handle
financial transactions, a validation process and
revenue sharing model had to be put in place. Putting
these pieces into place helped to create an eco-system
that connects phone users in need of specialized apps
with a large developer community willing to provide
them for a small price. This transformation was much
more than a product innovation; rather, the whole
business model moved to a double sided business
model (Eisenmann, Parker, & Alstyne, 2006),
connecting the developers with the phone users.
Figure 3: Apple iTunes to App Store adapted from
©XPLANE 2008
.
5 EVALUATION
The first evaluation of the proposed concept is their
instantiation into cases. Being able to use the concept
to represent real world business models demonstrates
the validity of the artifact. The second part is to show
their utility having user employing the proposed
technics to represent their own business models.
Since the proposed concept are still very early ideas,
a further step would be to refine them. This would
allow for them, for example, to be implemented into
a computer-aided design tools for business models.
Providing advantages of automating some of the
concepts’ more tedious interactions such as validating
constraints, editing arrows paths and changing
visibility of elements.
For each of the BM concepts explained in the
previous section we present the goal solved by an
artefact we built to demonstrate its instantiation. We
give a summary of our related work findings and
propose some further possible evaluations.
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5.1 BM Canvas Coherence
Goal: evaluate how rules can help beginner build
more coherent business models.
Useful validation questions and best practices
emerged during the years of teaching workshops on
the business model canvas. Some of which have been
formalized into guidelines and applied to build an
expository case business model (Fritscher and
Pigneur, 2014c). This could then be evaluated to see
how automated validation of the coherence of a
business model can assist the creation of better
business models. In the process of testing user
experience and idea generation differences between
paper and digital business model design, we also did
initial testing on coherence guidelines on paper with
a group of students. This showed that they lacked the
perseverance to rigorously apply them manually and
highlights the need to perform experiments with
computer aided systems.
5.2 BM Mechanics
Goal: evaluate how visual help such as color tagging
can help provide a clearer picture.
Drawing arrows on top of business models is also
something that emerges naturally in design session.
Therefore it is already somewhat in use although not
in a guided fashion. However, it is not always used as
described in the bm mechanics technique. Previous
work has shown that formalized links do not get
adopted by the users, instead color tagging of
elements can be used (Fritscher and Pigneur, 2014b).
We tested how tagging elements with different color
can help get a better visual picture without increasing
the visual legibility. This suggests that for
formalizing the BM mechanics feature, attention
should be focused on not making the arrow
interaction too constraining or complicated.
5.3 BM Evolution
Goal: Evaluate the usefulness of the layer concept to
represent business model transformations.
The business model evolution concept with its
two parts: transformation (mutation) and path of
possible (selection) is a somewhat complicated
concept. Especially to create the visual representation
on paper. Wanting to explore alternatives can lead to
a lot of copy work and stacking multiple versions of
transformation on top of each other can get visually
cluttered. An initial instantiation into a Computer
Aided Design (CAD) tool has been attempted and
1
Valve Corporation – Business Model Evolution Case
http://www.fritscher.ch/phd/valve/
shows promising results (Fritscher and Pigneur,
2014d). The creation of the prototype tool lead also to
the building of a case which describes a real world
business model evolution over seven transformations
and two business models evolving in parallel
1
. This
illustrate the potential of using a layered visual
approach to represent the dynamic nature of business
model evolution.
6 DISCUSSION
Although we presented the three concept separately,
each successive level of maturity builds on top of the
previous ones. A business model has to be coherent
in itself before exploring its dynamic aspect. The
prototype built to support BM evolution visualization
also supports drawing of arrows for BM mechanics.
This shows that the feature of drawing arrows
combines itself nicely with the layers that support the
transformations of the evolution. This combination
which provides means to decompose the internal
story into states that from a temporal segmentation of
the actions happening in the business model story.
This can then be visualized with layers as the
evolution of the story.
Implementing prototypes to support the concept
required to identify how the different design
technique can be support by CAD functions. We
summarize them in the next section.
Documenting the transformation which BMO
went through to get adopted by practitioners gave us
some insight into elements which made it possible.
We present our observation in the section entitled:
Lessons learned for business model methods
designers.
6.1 Design Techniques and Supporting
Cad Functions
In table 1 we provide a summary of the key design
techniques and supporting CAD functions for each
concept of the three maturity levels.
At the novice level, BM Canvas Coherence can be
improved by following guidelines. It is possible to
formalize these guidelines into verifiable rules. This
in turn allows to perform validation or trigger
contextual hinting assistance with a CAD tool. In
order for the tool to get a better model, it is needed to
indicate some of the elements relationship. This can
be accomplished by tagging them into different
colors, which is simpler for the user than explicitly
connecting them with links.
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93

At the expert level, BM mechanics helps to
provide a clearer picture on the internal interaction of
the business model. In order to support such
storytelling, functions like color and arrows can be
used on top of the BMC. In addition, a CAD tool can
help by toggling the visibility of elements as the story
progresses allowing for a dynamic representation of
another ways static canvas. This temporal execution
of the models’ story can then be tailored to the
individual stakeholders, the dynamic management of
the visibility allowing to support multiple stories on
the same canvas.
At the master level, BM Evolution helps to
address the transformation required by renovation
and exploration of possible future states envisioned
by scenario planning. Through layers, versioning and
by allowing to compute custom views of superposing
layers CAD tools offer dynamic visualization
showing any chosen past, present or future state of a
business model. Also by chaining the
transformations, it can be known which change
affects any descendant element’s future state. A new
computation of these updated views can be performed
by the tool without any work from the designer.
6.2 Lessons Learned for Business
Model Methods Designers
Based on the lessons gained from our experience we
can share the following observations on the possible
influences on the success of a business modeling
methods. These will help to broaden the adoption of
an academic enterprise ontology by practitioners:
Designing a method that can scale in complexity
for various proficiency levels, from novice to masters,
helps its adoption.
Performing design science evaluation cycles and
evolving the method after each evaluation is key to
identifying the right balance between simplification
and the re-addition of elements at different
proficiency levels.
Finding the right community is important: people
need to be willing to quickly test and iterate the
model’s concepts. (In our case, entrepreneurs were
the ideal test participants; it is in their nature to try out
business model concepts, which allowed for quick
iterations).
Providing a tool (free canvas and book) empowers
teaching at a university level as well as in workshops,
thus helping to spread the method.
7 CONCLUSION
Starting from observation on the evolution and
adoption of the BMC we identified the need to
address the issue of how to represent and help to
design the dynamic aspect of a business model
with the Business Model Canvas. Based on
observations we identified three maturity levels of
business model canvas design and addressed the issue
by splitting the question into three sub-questions:
How can the static design usage of the business
model canvas be improved (in relation to its
coherence)?
At the novice level, the simple nature of the
canvas helped in its adoption. This simplicity lends to
the use of building blocks as a checklist. It is however
necessary to keep in mind the relationship between
the elements in order to maintain the underlying
ontological nature of the business model theory.
Guidelines can help to verify these relationships and
thereby help to create more coherent models.
How to represent the dynamic aspect of
interactions happening inside the business model?
At the expert level, it is necessary to understand
the big picture. Showing a completed model to a
person for the first time would overload them with
information. Thus, design-thinking mechanics, such
as storytelling, have to be used to present the BM
mechanics of a model one step at a time. This allows
users to understand all the elements of a business
model, as well as the way they interact with each
other. These interactions can be further strengthened
by drawing arrows to outline the main story thread in
what we call BM Mechanics.
How to represent the transformation from one
state to another of a business model?
At the master level, it was found that making
different versions of a business model could help in
analyzing its reaction to the context. The management
of these versions quickly became a constraining
factor, particularly if only part of the business model
changed. Using layers to illustrate only the changes
is a design technique that helps to overcome some of
these constraints. Having the means to describe
transformation from one state into another, can then
be combined to form a chain of transformation
leading to a tree of possible path of evolution for the
business model in what we call the BM Evolution.
Table 1: Summary of concept, design technique and CAD functions.
Maturity Concept Design Technique CAD functions
Novice BM Canvas Coherence Guidelines, rules Colors, validation,
Expert BM Mechanics Storytelling Colors, arrows,
Master BM Evolution Renovation, what-if, scenario planning Layers, versioning,
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To conclude, we provide several opportunities
that could be further investigated for each of the
discussed levels.
7.1 Opportunities
The business model ontology can be directly
extended in several ways. However, it is most
advantageous to capitalize on the diffusion and
knowledge of the current version. We argue that it is
helpful to develop extension as a plugin. For example,
a customer segment can be analyzed through the lens
of such tools as personas and customer insight or
through the framework of jobs to be done (Johnson,
2010). The current focus on plugins is mainly on the
value proposition and the customers, or the
connection between the two. There are many more
elements, however, that could benefit from in-depth
analysis at a component or relationship level.
Those that come to mind include categorizing the
channel based on the time and type of interaction of
the client-to-customer relationship for this particular
event; this would make better use of the customer
relationship component. Key activities can be
decomposed into types and supporting applications.
This allows us to better align the enterprise
architecture, its business processes and infrastructure
to the business model (Fritscher & Pigneur, 2015).
Beyond small transformation of business model,
research into a theory of evolution for business
models is of great interest, particularly in identifying
why some business models survive change better than
others.
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