Ash Maurya created the Lean Canvas by adapting the Business Model Canvas by Alexander Osterwalder.
The idea is that you replace the traditional business plan with a one-page document which only takes 20-minutes to put together.
We like the idea because we believe the real value of a business plan is the thinking and research behind it (not the document) so we have incorporated it into our processes.
The Lean Canvas is a powerful tool that can be used by start-ups and young businesses to help them grow as quickly and profitably as possible with as little resources as possible. It’s important for young businesses to be agile because (although most startups fail) 66% of the ones that succeed report they drastically changed their plans. very often, the key to success is having an adaptable planning process that enables you find a workable plan before you run out of time, energy and/or money.
Here are the first three of nine building blocks in the order we run through them.
Step 1 – Customer Segments
The first building block is the Customer Segment which is found on the far right of the canvas.
Consider doing separate canvases for different different customer segments because each segment is likely to have it’s own business model. Your customer segment is the kind of people you’d like to be speaking to – the two questions are:
- Who specifically are we trying to create value for?
- Who are our most important customers?
These are the questions to ask yourself to help you define your segments.
- Who is my customer?
- Business to Business (B2B) or Business to Consumer (B2C)
- Who is my dream customer?
- What industry are they in?
- Where are they located?
- How old are they?
- What sex are they?
- Social and economic background
Although you do not want to be broad, you also don’t want to be too narrow. You also want to identify the strongest segment that you believe will be the early adopters.
Take time to consider customers and users. Customers pay you money, users use your product – they are not always the same e.g. Google and Facebook. Be aware they market place business like Ebay are more complex business models so use a separate canvas for each party involved.
Step 2 – Problem
Use the question “What is the job the customer segment has been trying to do?”
List a maximum of three problems for each segment and drive down into the core problem by asking “why is that a problem” five times.
Think in terms of functional and emotional problems:
In the problem building block also identify the existing alternatives – these will be your main competitors as well as the option of doing nothing.
Step 3 – Solution
This building block is often the one the entrepreneur is most interested in.
Instead of making the mistake of falling in love with your product, embrace the idea of a Minimum Viable Product and fall in love with creating a business model that works – using the canvas.
The Minimum Viable Product is the smallest product or service you can offer which delivers value and enable you to generate some revenue.
For each problem you identified, outline which feature in your solution addresses the problem.
Image from Flickr by Ben Jeffrey