An Introduction to Lean Canvas
. Running lean: Iterate from plan A to a plan that works
Do you remember the Business Model Canvas by Alexander Osterwalder?
It is quite similar but with some variations to adapt to lean start-ups or start-ups in the early stages.
The Lean Canvas is a business plan model that helps entrepreneurs formulate and refine business concepts quickly, develop product launches, identify target markets, establish key differentiators, and measure metrics for activities in real-time.
Business model canvas inspires the Lean Canvas with the same number of blocks but structured to meet the Lean Start-up requirements. Lean Canvas is a one-page business plan template created by Ash Maury, and he is the author of two best-selling books, “Running Lean” and “Scaling Lean.” He is praised for offering some of the best and most practical advice for entrepreneurs worldwide, passionate about research for better and faster ways for building successful products. He has developed a systematic methodology for raising the odds of success built upon Lean Start-up, Customer Development, and Bootstrapping techniques.
But what is the difference between business model canvas and Lean Canvas?
The business model canvas was created to solve business plan problems as soon as they are in the initial development stages. In other words, it is for companies that are already formed and have a physical presence in the market. Because start-ups don’t have a physical presence, try to use the business model canvas. They couldn’t fill all the boxes, and the canvas remained partially complete.
Lean Canvas is acclimatized for start-ups at the beginning of their existence.
The core of the Lean method is not the product or the perfect product. Instead, it is the most efficient provision of your Value Proposition to your Customer Segment.
The Lean Canvas method is a three-part cycle: Build, Measure, and Learn; your aim should be constant creation value to your customer. This canvas eliminates hours of work and focuses on perfecting the value creation process, and everything should be optimized to create the maximum value proposition within a minimum viable product.
How to fill the lean Canvas.
I will show you how to fill this canvas step by step. The secret to filling in order this canvas is…
Well, it is none; after filling some of my own projects and customers’ projects, I found out you can start filling the customer segment, or the unique value proposition, or the problem your customer’s segment has, or from the revenue stream.
Because great ideas come from everywhere, from listening to your customer’s problems, you have already in mind, from a unique value proposition, from know well your customer segment, accidental discovery, Innovation Theory.
I will explain to you all the 9 blogs of the Lean Canvas.
Being problem-focused is about solving a particular problem for a specific person.
I recommend putting yourself in your customer’s shoes and find, describe 3 problems they face. Try to understand their unique problems, needs, or challenges; let’s imagine what kind of people they are. What are their hobbies? What do they do on weekends? Be aware you find the wrong problems will create more problems; perhaps the customers will not understand why they need your product.
There are several ways to get a more informed understanding of their problems by doing some: User interviews, user tests, surveys, and questionnaires. Or just listening very carefully when they talk about their problems.
I give you one tip: avoid high-level problems because they are difficult to achieve.
- What is the crucial problem faced by my customers?
- What are those pains my customers have right now?
- What are the causes of those problems?
What products or services already exist as alternatives to yours?
In this section is where you identify your competition, who they are?
Your real competition is not determined by who you think they are but by who your customers feel they are.
Remember, your job is to find a better way to solve a problem than the existing alternatives.
This step is very simple and easy, just outline the solutions to each problem you’ve identified, this is our golden ticket if you really want to know if your customers like your solutions, you need to do out of your office, many times we think we have the great solution but all those ideas are inside the office, I recommend you go out and interview your customer segment, ask questions, and take those learnings, Remember Lean Start-up is validated through a continual ”build -measure- learn cycle.
Questions to ask:
- How do the solutions fit with your CS’ motivations to find alternatives?
- How do they resolve their need to search for an alternative?
When we come to this block, be really careful with generic customers segment, things like gender and age don’t always tell us useful information about the customers.
You must understand who your customers are; you can not know what they need or what their problems are? If you don’t know who they are.
In this block, we can see the difference between the Model Canvas and Lean Canvas. Model Canvas is more generic, Lean canvas is more specific the segmentation is more natural.
Try to imagine your customer with hobbies, with pets or not, singles or married, do they like sport?
Think about attitudes, how your customers feel? Think about their needs or think about their wants.
Try to image them in a social group! For me, this is the crucial part of the Canvas when you understand your customer’s segmentation inside of one urban Tribe.
This concept is mention in TRIBES. WE NEED YOU TO LEAD US by SETH GODIN. “A tribe is any group of people, large or small, who are connected to one another, a leader, and an idea. For millions of years, humans have been seeking out tribes, be they religious, ethnic, economic, political, or even musical (think of the Deadheads). It’s our nature.”
Questions to ask:
- What paint does the problem create in this person´s life?
- What status life my customer have?
- in which tribe are my customers in? And how they communicate?
You may need to think of problems and customers at the same time.
This group is your fans NUMERO UNO, are the people who believe first in your product or service.
These Are the people who were waiting for your product or service to become available.
this group of people is who will buy your product or service and will give you feedback to help you to develop your product nor service; because they believe in what your product or service, they will so open to sharing how they feel when they use your product or service, pay attention to them because they don’t do for you, they do from themselves because they want to be the first. ( Simon Sinek, start with your why early adopter s).
Perhaps you are unfamiliar with the early adopter’s term, comes from the Diffusion of innovations curve that explains are 5 group segment customers innovators, early adopters early majority, late majority, and laggards.
(foto of the curve)
Avoiding your early adopters will cost you a lot because they are those who believe in you your product or service, and they are willing to suffer inconveniences because they know your product can develop for better and better. (https://sphweb.bumc.bu.edu/otlt/mph-modules/sb/behavioralchangetheories/behavioralchangetheories4.html#:~:text=Early%20Adopters%20%2D%20These%20are%20people%20who%20represent%20opinion%20leaders.&text=Early%20Majority%20%2D%20These%20people%20are,are%20willing%20to%20adopt%20it.)
Unique Value Proposition
Finally, now you can start to fill this box is in the center of the canvas where you put your product or service. This is the most challenging and important step because you need to do it properly.
UVP is a clear statement that describes the benefits of your products or service. Why your product /service is unique, how is it different from the others? And, why should people buy your product?
Defining your UVP is the first step to articulate your work marketing strategy.
Use the data you collected from the customer’s segment, the tribe segment, the problem they have, the pain they have, and the solutions you found. Try to integrate all that data with your mission.
I highly recommend using the Value proposition canvas, which is based on two points.
First, the Customer Segment and Second, the Value proposition with this canvas, we can present more specifically those two points in order to find the product-market fit.
The Unique Value Proposition is THE PROMISE you give to your customers.
Make sure your message is clear and loud.
Questions to ask:
- Do your customers understand your value proposition?
- it is really clear that you remove the pain from your customers?
- It is unique? And how?
- it is valuable to my customers?
- it is a real proposition? (here is the thing I will love you used )
I believe many start-ups and business they had some problems to find they unfair advantages, or they think is an unfair advantage but is not.
What really are unfair advantages?
A real unfair advantage is something that cannot easily be copied or bought; if you think you don’t have an unfair advantage today, leave this box in blank or try to fill something. I notice that your unfair advantages will be proven over time when your levels of success rise. You need to defend your position, soo think about how you will protect your unfair advantages in the future or start to build something that will protect you in the future.
I will list some examples of real advantages try to use some for your canvas:
- insider information
- personal Authority
- A Dream Team
- The right celebrity endorsements
- large network effects
questions to ask?
- do I really have unfair advantages?
- how can I add more unfair advantages to my proposition?
- in the time, how can I defend my unfair advantages?
This box is about the ways for you to reach your customers, so by now, you should have a pretty solid idea of what the project is, who it’s for and what problems it solves. Now, the first few customers are always going to be people that you call out
or you meet in the street.
They’re going to be people that you spend lots of time and energy trying to sell to.
Remember, our time is limited, and so in the long term, we want a channel or channels for customers to bring lots and lots of people through the door.
Are ways to can get hundreds of thousands of people to hear about your idea.
Remember, in the initial stages, it’s important not to think about scale but to focus on learning, think which channels will give you enough access t your Customers at the same time give you enough learning.
Channels can be:
Email, social, CPC ads, blogs, articles, trade shows, radio & TV, webinars, and many more remember you don’t need to have all of them but be sure you have the right ones when you start your marketing campaign.
Questions to ask:
- Where is my customer segment?
- What channels do he use the most?
- How I reach them?
- What kind of content I should give them.
- Revenue Stream.
Revenue streams are the various sources from which a business earns money from the sale of the good or the provision of services, in other words, how much money comes into your company.
Many start-ups fail because they don’t do well in their revenue streams. One important thing you can do to secure the financial health of your business is to create a revenue model, take your time, and build your revenue plan.
This box needs to show the cash generates from each Customer Segment. Find a great one for your business to earn money.
Revenue streams can be generated in many different ways, and you can use a mix of these different ways for your business.
Types of revenues:
there are a ton of different ways you can bring money to your business, but let’s see the most common ways.
Revenues from good sales or services or service fees:
This is the core of any business.
Interest revenue: This account records the interest earned on investments such as debt securities.
Rent revenue: This account records the amount earned from renting outbuildings or equipment.
Dividend revenue: The number of dividends earned from holding stocks of other companies.
Types of revenues streams:
the revenue streams categorize the earnings a business generates from specific pricing mechanisms and channels. In other words other ways you can make money.
Transaction-based revenue: Proceeds from sales of good, usually customers pays only one time.
Service revenue: Revenues are generated by providing service to customers and are calculated based on time. e.g., the hours of consulting services provided.
Project revenue: Revenues earned through one-time projects with existing or new customers.
Earnings from ongoing payment for continuing services or after-sale services to customers. The recurring revenues model is the most commonly used because it is predictable and assures the company’s revenue source is ongoing.
Renting, leasing, or lending assets.
Licensing content to third parties.
in this box, we should be cautious to analyze all the costs created to do the business, but many companies fail in this structure. They forget many things that affect the profit. Take your time and find all the details of your cost. I’m not just talking about how much is the cost to create the product, but how much is the cost to create the value proposition, the cost of distribution, the cost of your channels, the cost of marketing, the cost of branding, the cost if your product or service is leaden the market how much cost to be the leader in that market.
Sit down with your team and find all the cost of your business fixed cost and variable cost and the other cost you see in the process of filling this canvas.
Maurya, A. (2012). Running lean: Iterate from plan A to a plan that works. Sebastopol, CA: O’Reilly.