The Business Model Canvas for Apps
The app canvas is a one-page template that supports you to examine and communicate strategic issues of an app. This is how entrepreneurs, app developers, agencies and clients make use of the template.
Often app projects are approached from only a single perspective, ignoring other important aspects that make an app successful. The app canvas helps you to elaborate the most important technical, functional and business aspects of a thoughtful app-concept and to summarize them on one page.
Advantages of using the App Canvas
- Structures your plans in only 20 minutes.
- Applicable for all types of apps (B2B, B2C, B2E).
- Conveys your app idea to colleges, investors or agencies.
Who can benefit from the App Canvas?
- Creative teams are using the app canvas to structure their brainstormings and workshops.
- Start-ups and entrepreneurs communicate their app idea on a single page to partners and investors.
- Clients (who want to commission an app) prepare their briefing with the app canvas.
- Agencies fill out the app canvas together with their clients to refine the project objectives.
This is how the App Canvas works
The App Canvas is based on Alex Osterwalder's Business Model Canvas. Whereas the Business Model Canvas has been designed for business concepts in general, we developed the App Canvas for app projects in particular.
The canvas covers eight aspects: Starting at the problem definition and the target group, through the value proposition and features, up to business and marketing. Each point is relevant for profit-oriented apps as well as for apps with strategic business value, e.g. for customer loyalty or efficiency of employees.
It's common sense that a product should solve a problem or satisfy a need. Apps are especially suited for solving specific user problems, because they are quickly installed and available in nearly every context.
So put your solutions aside for a moment and start with your users' problems. What are you trying to solve? Don't be content with your first answers, but ask for the 'why' multiple times to better understand the essence of the problem.
Reflect if the problem is framed narrowly enough to be actually relevant for your users. Make sure that the pain which is caused by the problem is big enough, so that users are willing to download a new app or even pay for it.
Who are your users? Even if you target group is really big: Your app will never be relevant for 'everyone'. Define your target group with demographic characteristics (age, gender, country, income etc.), but also try to characterize your users (lifestyle, values, motivation etc.). Try to estimate the size of your target group, so that you have some numbers to calculate the business potential.
3. Value Proposition
What promise does your app make? Think about an one- or two-sentence description to attract users. Phrase it clearly, precisely and point out your unique features. This template of Geoff Moore might help you:
- For _______________ (target customer)
- who _______________ (statement of the need or opportunity)
- our app is _______________ (product category)
- that _______________ (statement of benefit)
Example: For young travellers (1) who want to experience a city like locals (2) our app is a community-based online platform (3), that offers unique accommodations from private hosts (4).
List the 3–6 most important features and prioritize them. Try to be as understandable as possible, also if you make use of bullet points.
How is the problem solved at the moment? Is there already an app for it? If yes, how can you catch up the competitors? If no, do the users make use of alternative solutions, e.g. analog tools? Or is the pain not big enough for using a makeshift solution?
Try out the alternatives yourself and analyze their strengths and weaknesses.
6. Business Objective
What objective are you trying to achieve? Here are some common motivations:
- Earning money by selling the app or subscriptions, with affiliate-links or by displaying ads
- Improvement of customer loyalty, customer dialog or brand value
- Efficiency enhancement (of employees)
- User tracking for market research and customer insight
Now, further refine your objective: How much revenue do you want to make? How much time can your employees save? How long and often should users use your app?
Try to summarize your strategy in a few sentences.
For what platform(s) should the app be developed? Do all users have phones of the same producers (e.g. in a company)? Or does the app aim on the broad mass of Android users? What technologies are the competitors using and are these the optimal choices? Is the distribution over the app-store reasonable or is a (progressive) web-app more appropriate?
If you are unsure what platform you should choose, try our interactive app-technology consultant (in German).
What's your budget? Is it realistic? Did you consider cost for operation, maintenance and marketing? It would be annoying if your app is finally published to the app-store, but you can't afford to advertise it or to fix troublesome bugs.
8. Marketing Strategy
How do users find out that your app exists? Depending on your app's functionality, target group and business objective, various techniques might be applicable:
- Integration of your app into your current marketing actions.
- App-Store-Optimization (ASO)
- Running ads
- Creating a landing page for the search engine
- Publication in the intranet
- Public Relations
Tip: The wireframe template allows you to scribble the most important screens of your app. It's the prefect addition to the App Canvas, because it (literally) illustrates your idea even more.