Are you wondering what the Lean Canvas is?
It is a powerful business framework that was adopted by Ash Maurya and is based on the Business Model Canvas which was developed by Dr. Alex Osterwalder.
The Lean Canvas is heavily influenced by the Lean Startup methodology—a curation of best practices for building successful products.
In this article, I am going to give you everything you need to know regarding the Lean Canvas:
- Why is it important,
- What to pay attention to,
- How to fill it in, AND
- How to take the most out of it.
So, if you want to know more about the Lean Canvas, read on.
Contents
Chapter 1: What is the Lean Canvas?
Chapter 2: Why is the Lean Canvas Important?
Chapter 3: How to Use the Lean Canvas
Chapter 4: Lean Canvas Example (and Best Practices)
Chapter 1: What is the Lean Canvas?
In the business world, there are many frameworks and methodologies.
Most of them are complex and have no value whatsoever.
The Lean Canvas is not one of them.
Think of it as a business plan—but, better.
Or, according to its creator, As Maurya, think of it as:
“A 1-page business planning tool that gets read.”
As I told you earlier, the Lean Canvas was created on the basis of the Business Model Canvas.
The business model canvas was developed by Dr. Alexander Osterwalder, in the context of the Lean Startup methodology.
Here is how a typical Business Model Canvas looks like:
The Business Model Canvas is also a one-page planning tool for early stage startups that need to define some basics like the key activities and key resources for their business.
The 9 blocks included in the Business Model Canvas are the following:
- Key Partners
- Key Activities
- Key Resources
- Value Propositions (UVP)
- Customer Relationships
- Customer Segments
- Channels
- Cost Structure
- Revenue Streams
To dive a bit deeper, let’s see a definition of the Business Model Canvas by Wikipedia:
“Business Model Canvas is a strategic management and lean startup template for developing new or documenting existing business models. It is a visual chart with elements describing a firm’s or product’s value proposition, infrastructure, customers, and finances.”
Alex Osterwalder’s Business Model Canvas is an amazing business framework; and. Ash Maurya developed an excellent framework on top of that.
Business Model Canvas vs Lean Canvas
There is no “Lean Canvas vs. Business Model Canvas” battle here because both frameworks are equally important and can help you differently.
But, let me dive a bit deeper into the terms.
Here is the Lean Canvas Model definition, according to the creator, Ash Maurya:
“Lean Canvas is a one-page business plan template that helps you deconstruct your idea into its key assumptions using 9 basic building blocks.”
I hope that this Lean Canvas definition is enough to understand that the Lean Canvas is nothing more than a simple template; a template that literally anyone can use.
These nine blocks are:
- Problem
- Solution
- Key Metrics
- Unique Value Proposition
- Unfair Advantage
- Channels
- Customer Segments
- Revenue Streams
- Cost Structure
As a founder, you need to fill in all these 9 blocks before you build a minimum viable product (MVP) for your startup.
Avoiding to do so may lead you to building the wrong product, and this is not something you want.
Here is how a Lean Canvas template looks like:
Have no doubt about it: when you are starting, you have to create your Lean Canvas.
Of course, as you get traction, some things will change.
But, until you find a problem-solution fit, this template can be your and your team’s guide.
This 1-page business plan can be your guide at all times.
Chapter 2: Why is the Lean Canvas Important?
The Lean Canvas is very important when you are about to launch a new product.
There are other frameworks you can use for that purposes—such as the growth canvas—but, the Lean Canvas is enough.
Let me give you some prominent reasons:
- It helps you organize your thoughts,
- It helps your team understand your message,
- It helps your partners and co-founders share your vision,
- It helps you understand what your target customers are,
- It helps you understand where you’ll find your early adopters,
- It helps you understand your potential customer’s problems,
- It allows investors to understand that you know what you are doing.
Ash Maurya has included the most significant aspects of building a business in his powerful business framework.
For example, defining your Unique Value Proposition (UVP) is critical.
Here is a bright example of a Unique Value Proposition by CoSchedule:
When you read it, you understand that this tool will help you:
- Organize your marketing efforts, and
- Will help your team be more efficient.
Plain and simple.
“Yes,” you could do that without the Lean Canvas, but there is one thing that you can’t beat:
The Lean 1-page business plan template requires you to fill in all the blocks to get value out of it.
And, the best part is that it requires no technical knowledge or special know-how to fill it in.
Thus, every young startup founder should use it when starting out.
Chapter 3: How to Use the Lean Canvas
The Lean Canvas is a “1-page business planning template.”
Only that, it’s more than that.
It can help you:
- Refine your marketing strategy,
- Make your business idea more specific,
- Understand whom you are targeting and why,
- Make the paths and channels clear, so that you are ready to test them.
It ultimately helps you learn what “running lean” means.
At that point, you may be wondering: is there a right fill order for the Lean Canvas?
Here is the “right fill order” according to Ash Maurya:
As you can see, everything starts with whom you are trying to reach, and what is their problem.
If there is no problem, there is no need for solutions; which means, there is no need for new products.
So, I want you to give a big emphasis on the problems that you are trying to solve.
If I could give my fill order for the Lean Canvas, it would go like this:
- Problem
- Customer Segments
- Solution
- Unique Value Proposition
- Unfair Advantage (competitive advantage)
- Channels
- Key Metrics
- Revenue Streams
- Cost Structure
Note: This is my take on this. You can use the fill order that works best for you.
Something critical to keep in mind: there is no such thing as “basic building blocks.”
All blocks are important and need to be filled.
Will the Lean Canvas give you a competitive advantage?
Most likely, no.
That’s only because filling in your Lean Canvas is NOT enough.
The toughest part? Implementation.
To implement what you’ve included in your Lean Canvas.
Chapter 4: Lean Canvas Example (and Best Practices)
In this chapter, I am going to give you a Lean Canvas example.
Here is how the Lean Canvas looks like for Uber drivers in London:
I want you to pay attention to the problems:
- Don’t get enough rides when on duty,
- Don’t feel safe with clients in minicabs,
- Don’t know routes across London, AND
- More.
These are actual problems that minicab drivers in London have.
This is why becoming an Uber driver is popular:
If you have identified the problem (or problems) that a customer segment has, you can:
- Define a Unique Value Proposition that will resonate with your customer segment,
- Find the revenue streams that will put money in your pocket,
- Break-down your cost structure,
Thus, defining a customer problem is essential, and should be your starting point.
This applies to both new products and existing ones that add new features and functionalities.
I want you to pay attention to something equally important:
As soon as you define your solutions—based on the problems you solve—the UVP will come up naturally.
In fact, after defining your problem and solution, everything else will come into place.
One last thing: many people worry about the “channels” box.
Keep in mind that everything can change, meaning that as you move on with your customer development process, you may identify opportunities.
This means that you can always add and remove things you’ve included in your Lean Canvas.
Often enough, even your problem might change after you conduct Problem Discovery Interviews or the solution may change after you conduct Solution Discovery Interviews.
The Lean Canvas isn’t restricting; you can revisit it at any given time, and change it based on the stage you are at, and the progress you are making.
Chapter 5: Last Thoughts
Frameworks like the Lean Canvas help startup businesses running lean.
There are many startup founders who consider such frameworks to be a waste of time.
However, if you are building product for the first time, you’ll definitely need the Lean Canvas.
If you are thinking to build a new product, you should fill in your Lean Canvas first.
This way, you will avoid spending development time for something that wasn’t worth it.
Also, you will have a clear marketing strategy, based on your business idea and the problems that your potential customers deal with.
Both Ash Maurya and Alex Osterwalder have done a great job developing business frameworks that help founders plan their product and growth.
Now, I turn it over to you.
Have you ever used the Lean Canvas Model for your business? What were the results?
Either way, let me know by leaving a comment below!
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