Lean Canvas is an efficient approach to developing a one-page business plan for deconstructing your business idea into key assumptions for better analysis.
Lean Canvas is a strategic document that helps managers to assemble hypotheses of a particular business model for launching any start up. It will provide you with an actionable and entrepreneur-focused business plan. The document is designed to be focused on problems and solutions, key metrics, competitive advantages and other important issues that will be described below in this article.
Lean Canvas is quite similar to the Business Model Canvas structure but it has some essential differences. The key advantages of Lean Canvas in comparison with a business plan are:
A business plan takes too long to write (and actually not everyone will read it)
Lean Canvas is designed to help creating a quick visualization of any idea, to share it and get a feedback.
The method was created in 2009 primarily to work with SaaS startups. Nowadays many universities and educational institutions all over the world teach this approach as a part of the program of well known startup accelerators. Lean Canvas is also practiced in many large companies.
The author of this approach, Ash Maurya has admitted that he did not expect such popularity. So what makes Lean Canvas so popular?
What is Lean Canvas Template?
Lean Canvas template is a simple one-page business plan that helps PMs to deconstruct their ideas into the key assumptions using 9 special blocks/ cells.
Here is a short explanation of each Lean Canvas block:
All customer segments have separate sets of problems that they need to solve. This block is designed right for these problems. Here one, two, three or more problems can be placed. It's better to list up to 3 problems with higher priority.
Identify your real pain. Try to understand the key customers needs and challenges. You may try user interviews, tests, surveys or questionnaires to understand your problems better.
When you recognized the problem, the next thing is to find a solution for it.
Interview your customers, ask them questions and get feedback. Any Lean Startup is validated learning through a continual cycle Build — Measure — Learn.
How can your product solve the problems? Define the main features your product or service offers to solve customers’ problems. Think about the strengths and flaws of each feature.
Key Metrics allow evaluating the success of business processes. Any business needs specific metrics for monitoring performance. Fill in this Lean Canvas section with the most appropriate metrics for you. A good idea is to visualize a funnel top down. One of the best model to help with this is AARRR (Pirate Metrics).
Customer Segments (CS)
Customer segments are one of the most important blocks. It describes the community of customers or businesses that you are aiming to sell your product.
Customers can be segmented into the groups based on their needs, behaviors and other traits. They can be defined by demographics (age, gender, ethnicity, profession, etc) or psychographic factors (behavior, interests, and motivations).
Unique Value Proposition
It's the very middle of the document. UVP is a promise of value that should be delivered. It's about why you are different and why your CS should buy or invest time in you.
Channels are the ways to reach your customers' segments.
Think about the channels that will give you enough access to your CS and enough learning: social media, emailing, ads, blogs, TV and radio, trade shows, webinars etc. Do not use all of them, just where your CS is.
People often pay not enough attention to the cost structure and revenue. However, these are also the key points that are worth doing. How you price your business will depend on the type of a model.
In this box, all the operational costs for taking the product/ service to market should be listed.
Consider all your costs of doing business and make sure your customer lifetime value exceeds your acquisition cost.
Think about what makes you stand out and what puts you ahead of your competitors.
It can be everything, for example, a great team, insider data, personal authority, getting expert endorsements, reputation etc. Just think about something you have that no one can buy.
Lean Canvas with Hygger
You can easily visualize and apply this methodology, using convenient boards and cards in Hygger. You can choose their order yourself. It can look like this:
At first, you define Customer Segments, Problem and Unique Value Proposition.
The next items in your Lean Canvas document will be Solution, Channels and Revenue Streams.
And finally, then you define it Cost Structure, Key Metrics, and Unfair Advantages.
Summing it up
Lean Canvas can be repurposed and revised to suit your specific needs. It helps to drive organizational focus down to the right solution, metrics, marketing, design and development efforts.
Want to find out more about the method? These resources should be helpful:
The Startup Owner's Manual: The Step-by-Step Guide for Building a Great Company by Steve Blank and Bob Dorf
Lean Analytics: Use Data to Build a Better Startup Faster by Alistair Croll and Benjamin Yoskovitz