A business is not a static entity. It’s a living, breathing organism; prone to flux and growth. It’s made up of people, technologies, processes and culture that shift in relation to each other. So, how can we best understand a business as a whole?

‍

This is a question that drove us at Snowmelt to explore some new ways of representing businesses - and ultimately land on a new frame of reference that we’ve now used to represent dozens of organisations. We call it the Fractal Market Map™️.

‍

‍

Telling the story of your business

‍

The ability to quickly and accurately tell the story of your organisation is important at every stage of your journey – for investors, teams, or other stakeholders. Being able to 'map' your business also allows a business owner to diagnose issues, to stress-test new directions or navigate uncertain conditions. Whether it’s on a whiteboard, a roll of butcher’s paper, or a napkin in a bar, putting pen to paper to crystallise a business offering is a crucial part of this journey. But where do you begin in finding the right shape?

‍

To externalise one’s thinking around their business offering, business model frameworks can be extremely helpful. What can be challenging to capture in tandem, however, is both the business and the market in which it exists. The frameworks designed to help externalise these thought processes have been well-loved and are likely to be familiar to you already, such as the ‘Business Model Canvas’ or the ‘Lean Canvas’. 

‍

But with a focus on traditional business success metrics and market assumptions, these tools — whilst great in their own right – did have limitations in the supercomplexity of modern enterprise. These approaches map a business in lists, which are diverse categories. Whilst great for sketching out a concept in its early phases, these existing frameworks aren’t instructive in working out the details of what you need to do.

‍

So, we took an activity-based view of this challenge, focusing on the tasks an organisation undertakes value. It spans mechanics of the business as a system, but also connects it with its context, in a meaningful and scalable way. The result? The Fractal Market Map™️.

‍

‍

The Fractal Market Map™️

‍

In 2019, we began sketching the first iterations of what is now called the ‘Fractal Market Map™️. In short, the Fractal Market Map™️ focuses on the essence of an organisation - the value exchange relationship with their customers.

‍

This value exchange relationship happens when businesses connect supply - their products or services - with demand - that they induce from the wider market. Framing the activities of the business in this way makes it easy to see the importance, impact and dependencies of the work that gets done.

‍

Businesses also rely on several supporting activities to enable their work (think accounting, legal, HR and real estate among others) - these are captured beneath the core value exchange to indicate the support they provide.

‍

Finally, we consider the executive functions of the business that direct it - the strategic and management activities that are separated from day-to-day operations but are no less important to the business's success. These include strategy & planning, capitalisation and market intelligence. While the business usually conducts these, there is often engagement with the Board and other expert advisors - so they are represented outside the focused value creation of the business.

‍

So, what’s in a name?

‍

‘Fractal’ refers to the systems and the relationships that make them up being nested, overlapping and interconnected. ‘Market’ points to the traditional supply-demand relationship that is symbiotic with a wider context. And ‘Map’, because this is a visual representation of interconnectedness and dependency.

‍

Using systemic design principles, The Fractal Market Map™️ (FMM) represents a business’s activities oriented around its most fundamental relationship – how they create value in/for the market they are operating within. This very simple idea can be applied to any business or organisational system, hinging off the familiar intersection of supply and demand.

‍

‍

Let’s use the example of a lemonade stand.

‍

A lemonade stand has been set up on the side of a quiet suburban street. How might the stand vendor start to describe the business? Let’s start with naming why you exist as an organisation:

‍

1. Purpose - to quench the neighbourhood’s thirst

‍

The next factor the FMM asks us to consider is the value exchange that connects the supply and demand. We must look at this from both qualitative and quantitative perspectives – what is able to be measured? What is not?

‍‍

2. Value Exchange -  The customer gets a glass of thirst-quenching lemonade in exchange for their money and is satisfied. What we can measure is cost/profit/outlay, and what we can’t necessarily measure is customer satisfaction. The lemonade stand owner charges money for a glass of lemonade, and therefore, financially benefits from the exchange. ‍
‍

This is exchange is made by connecting supply and demand. This is the final preparation of goods for sale (eg. getting it into the customers hands), and the financial transaction.

‍

‍Then we’ll need to unpack the foundation elements of supply and demand:

‍‍

3. Demand - how you bring thirsty customers to purchase point (eg. signage, visibility, word of mouth)

‍

4. Supply - how you have the fresh, delicious, lemonade to be sold to the customer (lemon sourcing, ice, drinking vessels, storage, and preparation)

‍

What we now have is the core of the exchange of value. We have context around the ‘why’, as well as the part of the business that needs to be prized and protected at all costs – the value exchange. But this relationship does not exist in a vacuum. So, now it’s time to consider the ‘how’ – the people and conditions that sit around the supply and demand exchange, and how they enable it to exist.

‍

5. Enable: There are a number of people and conditions that allow this value exchange to exist. Some might include:

• Real estate: location, location, location is there the right kind of foot-traffic? 
• Capitalisation and accounting: Do they have cash? Can they pay their staff (if they do)?

‍

The final framing for your FMM will be what we label as ‘direct’ – the factors that direct the business as a whole. This usually speaks to the broader enabling elements such as a business’s capital, strategy, financing, and executive board. 

What’s important to note is that the final, outermost frame of the FMM sits around the whole picture. So, these wider enabling factors must be considered for all fields: supply, demand, enable, and all the weird and wonderful offshoots from these prompts.

‍

6. Direct: In our lemonade stall example, the directing elements could be:

• Strategy - What is the impact we want to have? Are we doing the right things?
• Planning - What might we need to do to prepare for business tomorrow?
• Management - Should we consider hiring external talent to oversee production?

‍

After an in person session to generate a map, your final result will look a little like this:

‍

‍

So, what can you expect from building a Fractal Market Map™️?

‍

A lasting document

‍

The FMM centres on how your business creates value. The hero of the story is the unchanging, foundational tension that exists between what a business can provide, and what a customer wants. For this reason, an FMM could remain timeless; an evergreen representation of a business’s core tenets.

‍

Something that’s expandable or scalable

‍

As a business grows, the FMM can grow with it. We call it ‘fractal’ because most relationship mapped can continue to be built outwards and outwards infinitely. Being activity-based, the activities should remain relatively stable, as a business scales, what changes is how these may be completed. You can create FMMs will across sectors and scales; including ‘subsystems’ of teams and functions within organisations.

‍

A model for businesses of all maturities

‍

The FMM is particularly helpful for startups and SMEs as it does not presume deep knowledge of your business or market. Rather than leaning on presumption or hypothesis – a common shortcoming of existing business models – the FMM focuses on the value exchange of supply and demand. A relationship, one would argue, that any business owner should be able to answer immediately.

‍

Visibility of challenges and opportunities

‍

By focusing on the relationship infrastructure of your business and the market ecosystem in which it operates, an FMM is an excellent tool to pressure test where challenges or opportunities may appear. By understanding interdependencies and project crossover, users can triage what areas need immediate, short-term, or long-term support.

‍

‍

A new direction for business modelling

‍

The Fractal Market Map™️ has a clear goal: to visually play out a business’s form (which can be controlled) in its market context (which, of course, cannot be controlled). In doing so, business owners can quickly and accurately identify the elements in their control to optimise their business success.

‍

As a framework, the FMM can be used at any stage of a business or organisation’s development, at any size. It can be as lo-fi as a quick exercise to clarify your offering, or as complex as investigating the myriad of relationships that might exist within, or outside of, your business. 

‍

Unlike the widely used business modelling tools currently available, the FMM actively encourages discussion about organisational configuration - connecting strategy to operations in the same conversation. By using systemic representation, founders are forced to connect deeply with relationship independencies rather than non-human forces outside of their control.

‍

‍

Here at Snowmelt, we find ourselves using the Fractal Market Map™️ with clients regularly, and we look forward to iterating and growing the model into the future.

‍

‍Want to try it for yourself? Download our template. For rapid experiment with its configuration, try placing it as a background into an digital white boarding tool like Miro or Mural.

To dive deeper, see this short presentation recording of Tim introducing the concept to RMIT Startup Activator in 2021. You can also see our presentation slides and short article from the 2019 Relating Systems Thinking and Design Conference, where we first discussed the approach.

‍

‍If you’re interested in engaging the team to collaborate or work on your own FMM, we would love to hear from you – email us at hello@snowmelt.io, and we’ll reach out to arrange a time to speak.