A [[business model]] is a strategic framework that describes how a [[company]] generates, delivers, and captures value. It includes elements such as the value proposition, target customer segments, revenue streams, and cost structure. This framework is essential for organizing a company efficiently by providing clarity and focus, aligning team efforts, and facilitating effective resource allocation. It also aids in informed decision-making and helps identify competitive advantages through distinct value propositions and differentiators. For [[startup|startups]], having a well-defined business model is important as it establishes the foundation for growth and scalability. Investors often seek clear and viable business models that indicate potential profitability. Additionally, a business model assists startups in testing and validating their market fit to ensure they meet customer needs effectively. In dynamic environments, a flexible business model allows startups to adjust to changing market conditions, supporting long-term success and sustainability. A business model can be analyzed, and developed using the [[Business Model Canvas (BMC)]], a visual framework created by Alexander Osterwalder. ## Activity - What the video [Business Model - How to Build a Startup](https://youtu.be/xRyXo7mWj3A?si=_jYFHHf0GqujhT9a) ([[Udacity - How to Build a Startup]], Lesson 3.2) Next: [[What is the value proposition?]] Back to: [[An Introduction to the Business Model Canvas]]