Understanding the Business Model Canvas for Web3

The business model canvas serves as a fundamental tool for early-stage founders, providing a structured framework to articulate core assumptions about target audiences, value propositions, and sustainability strategies. The business model canvas for Web3 does not fundamentally differ from traditional canvases but expands the definition of "customer" and includes unique value-capture mechanisms.

The Web3 Business Model Canvas Explained

The business model canvas helps companies establish a solid foundation by organizing their thinking around key business elements. For Web3 founders, this tool remains essential but requires expanded thinking about certain components.

In the Web3 context, the definition of "customer" extends beyond traditional consumers to include token holders, community members, followers on social platforms, and contributors to open-source projects. This broader perspective helps founders identify all potential stakeholders who will interact with their product or service.

Web3 businesses also have unique value capture mechanisms that should be reflected in the canvas. These include tokenomics strategies, treasury management approaches, and yield generation methods. Despite these differences, the fundamental questions remain the same: how do you reach your customers, how do you provide them value, and how do you sustain your business?

One major advantage of the business model canvas is that it helps founders become more specific about their target audience. Rather than broadly stating "our customer is a developer," the canvas encourages detailed demographic and psychographic definitions. For example, a more precise definition might be "our customer is a Solidity developer working at Series A companies in the tax strategy sector." This specificity prevents founders from pursuing unproductive paths and facilitates more meaningful conversations with potential users.

Why This Matters for Web3 Startups

"'If you build it they will come is not a strategy.' That is a maxim that I would argue does not hold real weight."

— Michael Martin, Codebase Lead at Ava Labs

The business model canvas is particularly important for Web3 startups because of the complex nature of decentralized business models. Without a clear understanding of who your users are and how you'll provide value, it's easy to fall into the trap of viewing tokens merely as speculative tools rather than representations of real value.

Web3 founders must remember that sustainable businesses solve genuine pain points for users. The token itself is just a tool—not the product. By focusing on user needs first and token mechanics second, founders can build businesses that create lasting value rather than temporary speculation.

Additionally, the canvas helps founders avoid the "if you build it, they will come" fallacy. User acquisition requires strategic planning, and building features without customer validation wastes valuable resources. Understanding your target users in detail allows you to develop the minimum viable product that addresses their specific needs before expanding into additional features.