January, 2017 - W3bminds

Lean Canvas, why it matters?

Behind every successful startup business is a well laid plan, right? Maybe not. The new trend is a lean canvas. The old-school business plan has met its demise because it just can’t keep up with the rapid changes necessary for startup success. After all, one of a startups early goals is dynamic growth. That means a business plan can quickly become obsolete. A business plan is also created behind a desk as a theory. A lean canvas is created in the trenches, so to speak.

Attention Span: Reviewing a lean canvas is much more attractive to prospective investors than a typical business plan. Instead of perusing a multi-page document, investors are tasked with a one-page lean canvas. An entrepreneur is able to convey his mission in less than a minute of an investor’s time.
Exposure: The more eyes on the canvas, the more opportunities to reach the right person who wants to invest in your business. It is so much easier to share a single page document than a large file.
Time Is Money: In any business, that old adage is true. When problems arise, a business wants to solve their problems quickly and efficiently. A lean canvas offers a one-page model a business can use that offers problem solving at record pace. Considering that business experts at Harvard report that 75% of startups fail, it is important to be equipped with the best problem-solving tools.
Methodology: Business plans of old often took weeks of preparation. They were elaborate plans that laid out a path to success. But, judging by the numbers out of Harvard, it seems that such detailed planning did not really work out that well. The methodology of a lean canvas approach allows for more creativity, experimentation, if you will. Flexibility is integrated into a lean canvas because it can be adjusted according to customer feedback. Instead of being a soothsayer, projecting what you expect to happen with a business plan, entrepreneurs become a mirror, reflecting customer feedback on a canvas.
Perfection Fallacy: A business plan’s weakness lay in its self-confidence that if the proposed path is followed, the business simply cannot fail. The lean canvas turns this perspective on its head. The lean canvas says, “Hey, I expect bumps in the road. I even expect some of my ideas to bomb. But I have a quick response plan that creates fluidity within my business. I can adjust and recover quickly.”
Years To Launch: It has not been uncommon for a business or product idea to spend years being researched. That is time wasted and revenue lost. A product or service could have been engaging consumers and evolving, becoming more relevant, allowing feedback to shape it into exactly what customers desire. Master plans fail because they lack this real-world input.

Lean Canvas Success Kit:

The adaptability of a lean canvas is modeled after the most successful startups. Startups that survive do so because they are able to move forward quickly after experiencing a failure. They adjust, adapt, and are continually learning. A lean canvas has three tools, or principles, in its kit:

Untested Theories: On day one, the entrepreneur is putting into action untested theories.
Feedback: These theories will be tested through customer interaction, development related directly through customer feedback on the product or service offered.
Agile Development: This is the concept of customer feedback driven development. By reacting directly to customer response, the evolution of the product or service is dynamic, rather than changing slowly and incrementally over time.

In conclusion:

The lean canvas method is gaining ground. More than two dozen universities, like Harvard Business School, Colombia and University of California Berkeley, are teaching future entrepreneurs this new startup methodology. Companies like Toyota Production System and General Electric have been making the shift toward lean start-up. This is what Pollenizer start-up mentor, Claudia Barrica-Larriviere, has to say about lean canvases:

“The beauty of the lean canvas is that it can be used in a hundred ways: it’s the Swiss Army knife of startup tool.”

By following lean canvas principles, startups are experiencing fewer failures. If you are ready to crush the competition and learn more about the process, please contact us.

The Lean Canvas, Single Page Business Plan

The Lean Canvas was developed by Ash Maurya in 2010 and has quickly caught on because of its simple and powerful ability to transform business ideas into a lean and actionable model that allows for a more fluid transition when things change, as things most often will. In his book, Running Lean, Maurya talks about […]

The Lean Canvas was developed by Ash Maurya in 2010 and has quickly caught on because of its simple and powerful ability to transform business ideas into a lean and actionable model that allows for a more fluid transition when things change, as things most often will.
In his book, Running Lean, Maurya talks about the fact that most start-ups fail with their “plan A.” Therefore, developing a traditional 60-page business model does not always make practical sense. This is especially true when the model is based on untested assumptions. Maurya’s concept of “running lean” allows you to continually test and refine your business model by using a single page diagram he calls the Lean Canvas.
After creating a Lean Canvas diagram you can easily share it with clients and stakeholders allowing their input to inform you as you continually develop your business plan. A Lean Canvas is easily updatable and allows you to make changes along the way addressing the market needs more effectively and then testing for validation. The process is more cyclical and dynamic than the static form of a traditional business model.

How to Create a Lean Canvas

There are various schematics and templates available online for creating a Lean Canvas. However, if you are anxious to get started, just grab a blank sheet of paper and identify the following nine elements.

Problem – Identify the customer problem or pain point for which your product or service can solve.

“All your initial energy should be channeled towards finding evidence of a monetizable problem, not towards acquiring more resources to build out your solution.” ~ Ash Maurya
Solution – How does your product of service seek to diminish or eliminate your target consumer’s pain point?
Unique Value Proposition – What does your company, product, or service offer that adds value to the goods or service you provide? Why should people care about your company? This is also where your company’s mission statement will come in. What is your company culture going to be like?
Competitive Advantage – How does your company differentiate from the competition? Do you have a patent or innovation —something that cannot be copied?
Key Metrics – These include any business process or activity that is measurable such as, market size, penetration, revenue per customer, as well as any data stakeholders request or would be interested in seeing.
Distribution Channels – How are your customers going to find your goods or services? How are you going to engage with consumers?
Customer Segments – Who does your company serve? Complete a demographic “sketch” of your target consumer.
Cost Structure – Define the costs of doing business. This includes salary, operational costs, distribution costs, back-end costs, marketing, etc.
Revenue Streams – How do you plan to generate revenue? What do you need to be profitable? What is the lifetime value of your customer?

One of the most exciting aspects of creating your business model via the Lean Canvas approach is that it is an organic, intuitive, and agile process that lends itself to brainstorming and thought provocation. All the while, it keeps ideas reined in, focused and organized. Preparing a Lean Canvas can help you identify value for your business that differentiates it from others. It is a fresh approach to business planning that is perfect for the startup since it replaces the traditionally taxing, overcomplicated, and outdated process of business model planning.

Four Reasons to try the Lean Canvas:

In case you aren’t convinced, here are the four main reasons the Lean Canvas business model approach makes sense.

Fast – Outline multiple business models and many scenarios in a few hours
Portable – The single page format is a lot easier to share when soliciting input from others.
Effective – The Lean Canvas is your best business pitch in diagram form.
Concise – Focusing in on the 9 elements forces you to discover the very essence of your business.

Business model planning can be an overwhelming experience for those just starting out. It can be a dreaded process for the more experienced founders. It shouldn’t be either of those things. Don’t let worries over business planning delay your startup; connect with us today and discover the many ways we can help get your business off the ground.