The Business Model Canvas (BMC) was developed to succinctly sum up a business model. The BMC is a framework to understand a business holistically without needing to delve into any intense detail-work$^1$.
Here's what the business model canvas looks like:
I'm not going to go through what each of the boxes means specifically, because Wikipedia does a better job than I could. There's also plenty of other very exhaustive writings on the BMC.
The BMC is taught nearly universally in business schools and in entrepreneurship programs. It was taught to me at UVA's McIntire School of Commerce. It is very important, according to how much attention it gets. If you talk to any "serious businessperson" and don't know about the BMC, they may doubt your credentials.
<aside> 🤨 So why, you ask, am I being so flippant, if this is so vital?
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Because most entrepreneurs (especially entrepreneurs who have been through business school) utilize the BMC wrong$^2$. Let me say that again:
Most people who use the BMC in an entrepreneurial context egregiously misapply it, leading to the whole exercise being a negative for the team.
The BMC should not be a worksheet or a checklist for you to complete. Most BMC examples you see online are bulleted lists of the items that constitute the content of the block. You should be able to speak for a minimum of 20 minutes about any of the blocks as they relate to your business idea. If you really have reasoned through and understand your business model, this is easy, and the BMC is an afterthought, a way to make your idea digestible to others.
<aside> 📖 In this way, it's very similar to the slides you assemble when you pitch your idea.
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Being able to make a BMC for your idea doesn't mean it's good, or well fleshed-out. Your idea is well fleshed-out when a BMC feels like a massive oversimplification.
So should you make a BMC? Yes. But that's a final step. After all of the ideation is already finished, and you want a quick way to sum it up. And once the Vision has been properly set, it's time to get cracking on Validating all those neat little bullets you've put together.