The answer to that question is a resounding NO. The business model canvas is not TOO simplistic. A better way to describe the canvas is to say that it is NOT unnecessarily complex. There is a difference between those two notions. I outline my reasoning below
- Visual Language: We should not underestimate the power of a visual language. A visual language has the ability to cross cultural barriers and allow people from different backgrounds to collaborate successfully. These can be people from different cultures, as demonstrated by BalloonKenya, or people from different departments within the same organization. Once you have a visual lexicon that everyone understands, people can go beyond negotiating meaning, and start creating valuable artefacts.
- Ockam’s Razor: The canvas allows people to think about the main aspects of their business model and represent these visually. It is possible to critique the canvas as not being exhaustive in terms of considering all aspects of the business world. This may be true. However, it is also equally true that the aspects of the business model represented on the canvas are perhaps the most critical for success. An attempt to make it more ‘realistic’ by incorporating other factors may make it more complex, without necessarily adding value. In line with Ockam’s Razor it can be argued that “It is vain to do with more what can be done with less”.
- Gestalt Psychology: One of the most powerful aspects of the canvas is the ability to visualise all the moving parts of your business model on one chart. In business plans this information is usually spread over several pages. This can make it difficult to get an immediate sense of the entire business model. In contrast, the business model canvas is consistent with the principles of Gestalt Psychology. This is often quoted as; “The whole is greater than the sum of its parts”. In Gestalt Psychology, the parts are equally important as the sum that is generated from combining them. The power of the business model canvas is that it allows people to focus in on each aspect of their business model when necessary and also step out and get a sense of the entire model.
- The Process: The power of the business model canvas becomes most apparent when it is combined with Steve Blank’s customer development process. In this context, you start to see that the processes that the canvas enables can be quite complex. All the aspects of a completed business model canvas can be viewed as hypotheses. Each aspect can then be tested by getting out of the building. The use of post-it notes illustrates that each aspect can be changed/modified at any time in response to feedback from the market place. This is a major weakness of the business plan. It does not enable this process of hypothesis testing and iteration. In contrast, the business model canvas can be used to capture the evolution of your business model as you develop and improve it.