The Lean Canvas
If you have any traditional business knowledge, what always comes to your mind in the first place is “I need to write a business plan”.
And it is true somehow, you need a plan, but startups operate under conditions of extreme uncertainty with very limited resources, and wasting your time writing pages and pages of lies, might not be the best option.
Not saying you are a liar, it’s just that a complete business plan requires a lot of information you just can’t know at this stage. That’s why we have the Business Model Canvas proposed by Alexander Osterwalder and the Lean Canvas, an adaptation that, in our opinion, is more appropriate for early-stage businesses.
Read this article to learn more about the differences: https://blog.leanstack.com/why-lean-canvas-vs-business-model-canvas-af62c0f250f0
Why you should use this tool before starting?
There goes another truth here, startups have low rates of survival, so before investing your time and money, you need to reduce the risk of failure all that you can, it is not a guarantee of success but at least helps you find out if your idea is worth pursuing or not and drives you toward right decisions.
We talked about this in our previous post: https://medium.com/vivaiolab/the-importance-of-identifying-and-testing-your-assumptions-before-launching-your-startup-dc3115305e9a
The Lean Canvas covers these aspects of your business:
The problem:
Remember this: “successful startups solve problems”. It doesn’t matter if your customers don’t know they had that problem before knowing your product, but there has to be one. So the first step is to define what problem you are solving and ask yourself “is it a real problem?” “Is it something worth solving?”.
You can also think here about the alternatives to your solution, how the market is already solving it.
Your solution:
Nice! now think what is the solution you are proposing to that problem. Is that the solution the market wants? Are your customers willing to use it/pay for it?.
Key metrics
You can’t focus on everything so here ask yourself what will you track at the beginning to see if you are doing the right thing? And how?
You can change this metrics in the future as you keep gathering the information you need.
Unique Value Proposition
Explain briefly what is that great thing you are offering to your customers, how you are different and why it will change their life. Put in some marketing to your idea description and see how the market reacts. (It doesn’t only work for customers, it is also a “why you are worth investing in”!!!).
Unfair advantage
You will have competitors, don’t be scared it is actually a good sign. But you need to stand out from them, how will you do that? what do you have that can’t be easily copied or bought? Why should customers choose you and not the others?
You have to be ready to fight for the first place!
Customer segments
This is simple DEFINE YOUR TARGET. Don’t try to satisfy all the market, it is just impossible and here less is more, be specific, find your niche and focus on them. You’ll have time to expand afterwards if it’s needed.
Channels
Now that you know who your customers are, find out what is the best way to reach them and build strong relationships.
Cost structure
Leaving the fun part behind, you are trying to build a business so let’s talk about money. List all the fixed and variable costs you’ll have.
Revenue
And what is most important, how will you generate income? You can have the coolest idea but remember your goal is to have a business, and you need to earn money out of it.
And this is basically what the lean canvas is about, defining every single detail of your business. But don’t forget to test every box before assuming it is the truth.
We always help founders create their lean canvas and test everything before investing to make sure it is something worth doing.
Use this lean canvas template for Google Drive and start working with your team!
