Building a Bulletproof Startup: Business Model Canvas vs Lean Startup vs Disciplined Entrepreneurship

Marius Ursache
Jan 16 · 12 min read

Startup is a word that gets tossed around a lot and its definition takes on many forms. It’s a state of mind, a disruptive business, a new budding venture, and many other things. Yet there are no set of rules to the game, no magic recipe for success, nor scientific approaches, in spite of all the thousands of books and gurus (including us :-P) that address this topic. That’s why we’ve decided to take a deeper look at the most popular and widespread approaches to building innovative companies.

Startups are anything but traditional businesses

Growth vs Scalability

The startup approach is a bit different. Most startups rely on building technology products. Which means that growth is not proportional to the number of employees or physical resources. Scalability is almost always top-of-mind, that’s why everyone dreams of becoming a unicorn in the startup world.

Existing markets vs disruption

Startups want to make a splash in these markets. Their purpose is to improve parts of the day to day activities that we didn’t even know need improvement. But walking on roads that others haven’t walked before is dangerous, and most startups die on the way.

Dealing with uncertainty

Not so much when you’re trying to innovate. The traditional business plan is static and when applied to startups it provides no real way to measure ROI and financial projections. Eric Ries, probably the most famous theorist in the startup world gives the best definition of a startup. Ever (in my humble opinion):

“A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.”
Eric Ries,
Lean Startup.

Searching for sanity

  • Business Model Canvas (2010) created by Alexander Osterwalder and Yves Pigneur.
  • Lean Startup (2011), coined by Eric Ries based on lean manufacturing and Steve Blank’s “Customer Development Model”.
  • Disciplined Entrepreneurship (2013), developed by Bill Aulet based on his experience nurturing startups out of MIT for more than 9 years.

Each one of these methodologies was created with flexibility in mind. They provide a solution for the uncertain nature of innovation-driven enterprises, solving a lot of problems. Through them, you’re encouraged to test. Iterate. Adjust. You build your company knowing real market needs, based on feedback and in-depth research. They expose a much clearer path to success, long needed in a sector where uncertainty is often the only certainty.

Tools for the real world

The newness of these frameworks means we don’t have enough data to tell whether they’re efficient or not. The percentage of startups failing still goes as high as 90%. Is it because of existing flaws in these methodologies or just human nature? Unlike religions, there is little room for one startup bible. And I’ve found out that blindly following only one of these methodologies creates exposure to their flaws and increases the risk of fragility.

In my view, the startup journey resembles the journey of explorers to uncharted territories or the Gold Rush to the American Wild West. These explorers had little use for Bibles (except for psychological comfort, maybe) but in great need of maps, tools, and new mental models. Thus, my analysis looks at how these startup frameworks fare at this.

Business Model Canvas

“The same products, services or technologies can fail or succeed depending on the business model you choose. Exploring the possibilities is critical to finding a successful business model. Settling on first ideas risks the possibility of missing potential that can only be discovered by prototyping and testing different alternatives.”
Alex Osterwalder, creator of the Business Model Canvas.

Pros

  • Focuses on how the value flows throughout the business regardless of the stage of development, the business offering, or the intricate details of strategy implementation. This helps to “keep the main thing the main thing” (i.e. focus on important aspects) when reviewing any decisions that impact the business.
  • Through the Value Proposition Canvas, it helps with understanding the customer beyond simple marketing parameters. It tries to create empathy for the users to help the business owners understand the core value of what they are building.

Cons

  • It has a fixed architecture (nine building blocks that need filling in) which may be less clear or relevant to tech startups. In their case, a deep understanding of the relationship might not be as relevant in early stages. Key activities are somewhat redundant with key resources. Ash Maurya has adapted this to a much better version for startups, the Lean Canvas.
  • Being very minimal, it can give a false impression to beginner entrepreneurs that “they have it all figured out”. As a result, they jump into building their product or solution — similar with taking a map for good and putting all your efforts into walking towards the presumptive destination.

Lean Startup

“The ability to learn faster from customers is the essential competitive advantage that startups must possess .”
Eric Ries, The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

Pros

  • Focus directed at user/customer in the customer discovery and customer development stages.
  • Introduces important concepts as Minimum Viable Products and pivoting. These concepts are counterintuitive (if not outrageous) for someone with a traditional business, where success is often a result of marginal improvements and persistence.

Cons

  • It encourages focus on product vs business (build/measure/learn). Although Ries gives good examples of the MVP and pivoting criteria, these concepts are mostly applied by founders as an excuse to stay in the comfortable zone of building products or technologies, after only a superficial understanding of customers. The lean management process is effective in a more mature company (Ries took and expanded on the lean manufacturing perfected by Toyota) but presents higher risks for startup teams. In more mature markets or deep tech, MVPs need a lot of time and resources to build. To keep with our explorers’ metaphor, it’s like giving them the mind and heart of an explorer, but then letting them wander around forever. Getting them excited about the travel and views, but with no understanding of the destination, or the perils and strategies of the journey.
  • While the mindset and examples are spot-on, the process leaves a lot of room for founders to avoid hard questions and take the wrong approach. The Lean Startup philosophy asks to identify assumptions first, then set clear metrics for validating them, and only last to define and build the experiment. But in real life things happen the opposite way. If you know any lean entrepreneurs, more often than not they would get excited about a product feature, then choose a metric based on what they build, and only then try to link it to an assumption — to “comply” with the lean label. It is is not a flaw of concept, but of implementation. Luckily, in his Running Lean book, Ash Maurya presents a better process of how to implement a lean mindset. Maurya presents a better process of how to implement a lean mindset. The only thing to remember is that, same as in physics, experiments can only invalidate most hypotheses. But where do we find those founders who are willing to try to kill their “baby” to be successful?

Disciplined Entrepreneurship

“The single necessary and sufficient condition for a startup to succeed is a paying customer”
Bill Aulet, MIT Sloan Professor, Disciplined Entrepreneurship author

The methodology introduces to the startup world useful concepts such as beachhead markets, personas, high-level product specifications, quantifying value, decision-making units and many more. They are not only presented in an easy to understand way but are linked with the author’s experience as a serial entrepreneur and highly adapted to tech innovation.

Pros

  • It is a clear and detailed map of the territory from the first step to the last one. It goes very in-depth with details, which is useful for people with no previous business experience or degrees.
  • It’s based on Aulet’s personal experience and his work with hundreds of innovative startups out of MIT. Focuses on numbers and process to reduce uncertainty and keep people on the right track.

Cons

  • Requires a lot of effort in dealing with multiple unknown business variables before getting to the enjoyable part of the process (building the product or technology only starts towards the end of the process). This makes it very likely for founders to quit figuring out all the details. The fact that “It takes months but may save years” (as I often tell founders I work with) doesn’t make it very appealing. I usually recommend founders to go through the whole 24 steps with their team in one day (to have a superficial but 360-degree view of their startup). After that to go in depth over the next week. And, finally, focus on the areas that are most relevant to their situation.
  • It focuses on the path on the map and the tools in your backpack, not on how to be an explorer or the clarity of the destination. That creates the risk of short-sightedness. This is fixed with the new concepts and the Disciplined Entrepreneurship Canvas in the sequel workbook.

And now what?

Start planning your journey by using the Business Model Canvas or the Lean Canvas. Understand your destination before anything else, and your motivation (because that is what is going to keep you and your team together on the path when things get hard). A moonshot or North Star is more important than anything. But then what matters are the first steps.

Understand how Lean Startup works, how to start discovering customers. Get out of the building and talk to them, no framework or toolbox is going to replace that. Create the profile of your persona using the structured framework Disciplined Entrepreneurship provides. Get to know your customer. Your beachhead market. Your TAM (what?). The information that results from following the first steps of this framework is more detailed and provides more insights into user/client needs and it will make it easier for you to work with the Value Proposition Canvas or the empathy maps from Ideo.

Use our Problem Statement Canvas to understand the problem without considering any solutions. Then go back and adjust the nine blocks of the Business Model Canvas. Then go more in-depth, trying to go to the level of detail in the Disciplined Entrepreneurship Canvas, by going through the steps of the framework. Don’t start building the product yet, we know you have that itch. Get to understand your assumptions first, only then define the metrics and experiments, based on the Running Lean process, which is the best implementation manual for the Lean Startup philosophy. Don’t build an app when you can build a landing page, or Powerpoint, or Kickstarter campaign. Don’t build an AI if someone in your team can do it using email and a spreadsheet. Have them pretend they are THE chatbot to validate it’s a business first before you start writing code.

Make small improvements based on user feedback, not on your grandiose vision (you’re not Steve Jobs or Elon Musk, although you could be better). But don’t focus just on the product. Building a business is much more important and people often overlook that. And don’t spend time listening to the advice of mentors, authors or gurus (like us) — instead, listen to your customers. Then do it again.

Startups are all about the unknown. And flexibility. And testing. There is no one right formula for becoming successful and any entrepreneur looking to start an innovation-driven enterprise should know in advance that fixating on one tool to solve all problems is rarely the answer. You wouldn’t leave on an expedition taking only one thing with you (as long as it’s not a spiritual or religious one), so don’t be a blind follower or zealot of any startup trend.

Think for yourself and choose your tools wisely, because your journey is unique.

Disciplined Entrepreneurship

Disciplined Entrepreneurship is an intensive process, created by Bill Aulet, that shows how innovation-driven entrepreneurship can be broken down into discreet behaviors and processes which can be taught in just 24 steps.

Marius Ursache

Written by

Founder & CEO of Eternime. Disciplined entrepreneur. Award-winning designer. Productivity junkie. Former doctor.

Disciplined Entrepreneurship

Disciplined Entrepreneurship is an intensive process, created by Bill Aulet, that shows how innovation-driven entrepreneurship can be broken down into discreet behaviors and processes which can be taught in just 24 steps.