Lean Canvas is the New Business Plan
How about a one-page business plan? Feels like cheating doesn’t it.
Ash Maurya, the man who famously said ‘Life’s too short to build something nobody wants’, is the mastermind behind the Lean Canvas. It’s application has been used by the likes of Amazon, Adobe, Dell and Stanford University to name a few.
But this version is an appropriation of Alexander Osterwalder’s Business Model Canvas, the original canvas for modelling business.
So, who wore it better?
Well, Alex Osterwalder’s Business Model Canvas does a great job of illustrating a range of planning and marketing strategies for competitive and business success.
Meanwhile, the Lean Canvas concentrates on the way timeline affects the revenue stream of a business. It is more target-specific and incorporates both small and large businesses effectively.
In other words, the Lean Canvas is more actionable and entrepreneur-focused, it focuses on common startup factors such as uncertainty and risk.
Ash decided to get creative on the traditional ‘canvas’ constraints and went all cut and paste on it. He went to work on creating his own collage so we could all start to plan business more effectively.
How was the Business Model Canvas Changed?
Ash Maurya added more elements:
- Problem- a problem box was included because several businesses do fail applying a lot of effort, financial resources and time to build the wrong product. It is therefore vital to understand the problem first. Startup 101 stuff.
- Solution- once a problem has been recognised the next thing is to find an amicable solution to it. As such, a solution box with the Minimum Viable Product “MVP” concept was included.
- Key Metrics- a startup business can better focus on one metric and build on it. These key metrics tell you how your business is tracking.
- Unfair Advantage- this is essentially the competitive advantage. A startup should recognise whether or not it has an unfair advantage over others and is not easily copied.
There are a few other things that Ash Maurya omitted from the original Lean Canvas in an attempt to sharpen it up. These include:
- Key Activities and Key Resources- Ash found out that they were more outside-focused when gauged with the entrepreneur’s needs. They had also been covered in the Solution box.
- Customer Relationships- a deeply focused startup business should establish customer relationships from the beginning. As such, these were covered in the Channels box. These relationships are nurtured via these channels, they are your your pathways to the customer.
- Key Partners- Ash removed this category (after much deliberation) due to the fact that most startups don’t require specific key partners initially because they deal in unknown and untested products. As such, it would be a waste of time trying to build such relationships.
It should be mentioned that success for some types of products is predicated on first establishing the right key partners, but Ash argues that most products do not fall into this category.
Lets eliminate the waste and optimise
The key fundamental to Lean Startup methodology is the elimination of waste — this includes time, processes, inventory and more.
That is why the Lean Canvas is predominantly designed for entrepreneurs and not customers, consultants, investors or advisors. It deconstructs an idea into it’s key assumptions to let founders focus on actually building their business.
Maybe you want to attempt your own version of the canvas? Perhaps it’s a hybrid of both Business Model and Lean? As long as it’s about a page, and it’s not filed away gathering dust, you’ve probably nailed it.
For more ‘Lean Lingo’ check out Ash Maurya on Medium. He’s the Author of Running Lean, Scaling Lean, and Creator of Lean Canvas — Helping Entrepreneurs Everywhere Succeed.