I have often worked with social entrepreneurs on the Business Model Canvas. The two blocks we always start with are the Customer Segments and Value Proposition because they form the heart of your business model. All other blocks exist to support delivering your value propositions to your customer segments.
For social ventures, however, the title, “Customer Segments”, is inadequate. It would be more accurate to call this block, “Stakeholder Segments”, because of the more numerous and varied segments being served by a social venture.
HYBRID REVENUE STREAMS
Since social ventures have chosen to achieve social impact through business practices, you all have customer segments related to your business activities as with any entrepreneur. However, if you’re a nonprofit operating a hybrid model (part grant-funded, part funded by business activities), you have additional sources of revenue that are not, strictly speaking, from customers. They are from funders and donors.
Social venture also have beneficiaries that belong in the Customer or Stakeholder Segment block. This is the group whom you’re serving with your social mission. For example, if you have an employment-focused social venture, your beneficiaries are those marginalized groups whom you recruit and train. You wouldn’t operate your social venture business without your Beneficiaries.
Each Stakeholder Segment has a unique problem or need for which your solution provides a compelling value proposition.
For example, your beneficiaries have a need or problem for which your venture must provide a workable, effective solution. Your funders have a need for successful, impactful fundees that allow them to meet their own missions. And your customers need to see your product or service as a solution that fulfills their needs better than anything else in the marketplace.
Determine each segment’s value propositions as early as possible in your planning process through speaking to many individuals within each stakeholder segment. Pivot your solution until you can consistently deliver on your various value propositions.