In week 6, we discussed the business model canvas. The canvas encompasses nine building blocks, including customer segments, value propositions, channels, customer relationships, revenue streams, key sources, key activities, key partners, and cost structures. Alexander and Yves first proposed it more than ten years ago. Nowadays, with the advancement of technology, especially social media, new business forms continue to emerge, which leads to a thought-provoking question of whether the business model canvas can still be applied for analyzing new situations.
The first example that comes to my mind is a platform called Archive of Our Own (AO3). It is a nonprofit open-resource archive for “transformative fanworks, like fanfiction, fanart, fan videos, and podfic.” (Home | Archive of Our Own) Utilizing the business model canvas to analyze AO3 would be tricky. For instance, when it comes to the key partners section, it would seem that AO3 doesn't have partners in the traditional sense, as AO3 is operated totally on its own. However, it could be also argued that AO3’s key partners are its users, most of whom are readers and writers, as their reading and writing keep AO3 thriving, they also make donations or raise funds to maintain the platform’s operation, and some of them work voluntarily as editors or designers for AO3. Besides, it would be difficult to analyze AO3’s revenue streams as its money for operation comes from fundraising and donations.
The crux of the matter is that first AO3 is a nonprofit platform, and second, which is more importantly, is that the relationship between AO3 is its users is different from the traditional. The traditional business-customer relationship is based on trade, for example, a supermarket sells products to customers, and customers give money to the supermarket. Nevertheless, in the context of AO3, the platform provides a free repository for fans to host and access fanfiction, and fans can engage in the operation of AO3 (not to mention that AO3 was originally founded by fans). The relationship goes beyond trade and is based on the shared love for fanworks and fan culture.
AO3 is not the only case of a business that is operated not for the sake of profit, but for love and interest. Z-library was established to provide free book resources and Sci-Hub was founded to provide access to academic publications. When it comes to these kinds of businesses, the business model canvas seems to lose parts of its power.
Furthermore, even not considering the subject of analysis, the business model canvas itself has deficits. The model takes a snapshot of a business but fails to address the ongoing process of the future. Still take the example of Shell, the second-largest petroleum company in the world. In the 1970s, Shell forecasted the upcoming political instability in the Middle East, and it decided to invest in supertankers while other companies continued to build oil refineries. In the end, Shell successfully responded to the oil crisis while others did not. Shell’s case demonstrates the importance of thinking about the future and considering external factors like politics. Moreover, the business model canvas doesn’t take competitors into account. In a market, it’s not only about the company and its customers and partners, it’s also about its rivalries. Failure in a competition could be devasting for a company. For instance, Nokia used to dominate the mobile phone market, but it failed in the competition with Apple and began to decline.
The business model canvas, of course, is powerful, given the fact that it is widely applied by many companies. However, my question is when it comes to business like AO3, how can the model be adjusted? Besides, is it possible to extend this model to integrate future and other external factors (e.g., competitors) into the canvas?
I’m impressed by your critical portrayal of cases that pinpoint the limitations of the business model canvas, specifically for overlooking competitors and long-term developments. In addition, the tendency to highlight interconnections between companies, services, and end-users may bring about the absence of external factors (e.g., historical, social, and technological contexts which are change drivers) in return.
ReplyDeleteAs you’ve mentioned, Z-library, a non-profit project offering users a vast repository of content without charge, can hardly be undertaken by the canvas proposed. It sparks my curiosity about how Z-library, as well as AO3, maintains its business while driven by few donations and advertising revenues. I notice that there has not been much about Z-library’s operation or commercial status available; meanwhile, its legitimacy has been questioned for years. The disciplines underlying the framework of accessibility of resources would then threaten the value proposition on its own.
After all, there’s no consensus about the definition of success. On the one hand, the success of a business can be marked by significant profitability, such as Apple. On the other hand, active user engagement can also be regarded as a favourable result, like AO3 where fans contribute as readers and writers. To this extent, I agree that the classical model itself is not enough for building up a campaign without thorough consideration. Further integration with other methods should be taken into account, and entrepreneurs need bigger pictures of their business ecosystem.
Your analysis of the business model canvas in relation to non-profit platforms like AO3 is insightful. It's true that the original business model canvas may struggle to encapsulate the unique dynamics of platforms in the current market. What interests me is that these "nonprofit platforms", at present, though do inspire the active creation of work from users, are trapped in the dispute about its "unjustified" sources of profit. If we take a look at its business model canvas, we may fail to figure out its complicated operation method.
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