Complete Beginner’s Guide to Lean Canvas

What is a Lean Canvas?

You finally decided to bring the idea to life, and you want it to be done in a lean way.

Alexander Osterwalder proposed the Business Model Canvas on his earlier book: Business Model Ontology. Business Model Canvas enables new and existing businesses to focus on operational as well as strategic management and marketing plans, in a wide range.

But it is not suitable for impatient startup founders who want to enter the market and learn from their experiences. So, Ash Maurya develops the Lean Canvas and brings a new perpective to the Business Model Canvas — A single page business model.

Who are the Lean Canvas for?

It is especially for startup entrepreneurs. Ambitious startup founders and marketing teams use the Lean Canvas to get to the point faster. It is not for existing businesses.

What is the focus of the Lean Canvas?

There are many factors you should consider when preparing a business model such as customers, investors, entrepreneurs, consultants, advisors. The Lean Canvas focuses on entrepreneurs only. Startup founders don’t have think about the rest at the idea stage of a business.

How the Lean Canvas segments customers?

The Lean Canvas does not lay much emphasis on customer segments because startups have no known or tested products to sell. Customer segments, channels and customer relationships are for existing and tested businesses.

What is the approach of the Lean Canvas?

The Lean Canvas does not lay down the infrastructure, list the nature and sources of financing and the anticipated revenue streams of the business. It begins with the problem, a proposed solution, the channels to achieving the solution, costs involved and the anticipated revenue streams.

How can we see the competition on the Lean Canvas?

It never focuses on value proposition in quantitative and qualitative terms as way to stay smart in the market. The Lean Canvas assesses whether the business has an unfair advantage over the rest and how to capitalize on it for better grounding.

What are the benefits of the Lean Canvas?

It is a simple problem-solution oriented approach which enables the entrepreneur to develop step-by-step. The Lean Canvas gives analytical approach, a vital factor in the success of a business.

The Lean Canvas does not take too long to write, frequently updated, and allows them to really read your business model. It is fast.

A single page business model is much easier to share with others which means it will be read by more people and also more frequently updated.

Explanation of the each block on the Lean Canvas

Problem

Your customers have problems waiting to be solved by you. List the top three problems you think that your customers might have. The problems will help you with shaping the solution that your product or service provides.

Customer Segments

Try to group your potential customers. This section is strongly connected to the problem because segmenting your customers will help targeting them with the solutions relevant to their problems.

Unique Value Proposition

Unique Value Proposition (UVP) defines how you solve your customer’s needs and what distinguishes you from others. Try to find a benefit that you ensure your customer that you are the solution provider they are looking for.

Solution

You are not the customer, so you can’t know the real solution. Yes, you found the idea from a problem, but there might be bigger you should need to solve. The best way to find the solutions is to ask your customers.

Channels

Think your marketing channels as an investment to your marketing research. Each channel is a potential asset in terms of the return of the investment (ROI). Your investment may be money or time. And your channels can be email, social media, pay-per-click ads, blogs, articles, trade shows, etc. Find the most profitable ones.

Revenue Streams

It’s a simple question: How will you make money? You might be thinking of starting with a free product or service, but keep in mind that you are doing this business to make money and you should be ready to do it when it is time.

Cost Structure

List all the items that costs you to get your business from idea to the market. This could be your website design, software development or market research.

Key Metrics

How will you understand if your business succeeds, or fails. You must define spesific key metrics to monitor your business. For example, number of users signed up for a beta list is a good key metric for start, if you are willing to ask them to buy the real product.

Unfair Advantage

Is there anything important to your business that cannot be copied? It can be a team member who will boost the project, a unique channel to reach your customers, an endorsement which lets you to jump through more than one steps.

Ready to get started with the Lean Canvas?

I thank Ash Maurya for his excellent thinking behind Lean principles and I would highly recommend you visit his LeanStack blog and buy his Running Lean & Lean Analytics books — both excellent.

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