Lean Canvas
The Lean Canvas is a one-page business planning tool designed to help new ventures outline their business idea. The Lean Canvas is similar to the Business Model Canvas, but with more focus on customer problems and solutions.
The key components of the lean canvas are:
Customer Segments: Who are the target customers?
Problems: What problem do the target customers experience?
Solutions: What should be the organisation’s approach to solving the problem?
Unique Value Proposition: What makes the solution special?
Channels: How will the organisation reach customers?
Revenue Streams: How will the organisation make money?
Cost Structure: What costs are involved in operating the organisation?
Unfair Advantage: What is the organisation’s unique competitive advantage?
Key Metrics: How will the organisation measure success?
The results
- A clear problem definition
- A visual, one-page representation of a concept that is easy to communicate
- Identification of risks and assumptions
When to use it
Business planning: When outlining core concepts of a new venture or idea
Pivoting strategy: When changing organisational direction
Team alignment: When seeking to align perspectives about a business concept or venture
Alternative tools
Strengths
Simple and concise
Customer-centric
Easy to update
Weaknesses
Oversimplifies complex projects
Limited flexibility
Not comprehensive
How to use it?
What do I need to start?
Insights relevant to the venture. For example:
- Customer demographics: Age, gender, location.
- Market research: Trends, competitors, and gaps in the market.
- Customer feedback: Surveys and interviews.
How to use it?
Who to involve?
The Lean Canvas can be done alone or with a team. Consider involving:
- People who can offer insights about the viability of the venture.
- People who can offer insights into suppliers and partnerships.
- People who understand the target customer.
Step by step
1
Populate the Lean Canvas
Customer Segments
Define who the target customers are. Ask questions like:
- Who are the primary users of our product or service?
- What are their demographics, behaviours, and needs?
- How do they currently solve the problem?
Consider pairing with the Value Proposition Canvas or the Customer Empathy Map to gain an even deeper understanding of the customer.
Problems
Identify the problems the offering seeks to solve. Ask questions like:
- What are the main pain points of our target customers?
- What existing solutions are they using, and why are these inadequate?
- What are the top three problems that need addressing?
Identify the most important problems.
Consider pairing with Jobs to be done to help focus thinking on core problems.
Solutions
Outline the solutions which will best solve the identified problems. Ask questions like:
- How does this solution directly address the problems identified?
- What are the key features of our offering?
- What is our minimum viable product?
Describe the top features of the proposed solution.
Unique Value Proposition
Explore what makes the offering unique and valuable. Ask questions like:
- What is the single, clear, compelling message that states why the offering is different and worth buying?
- What unique benefits does our offering have that competitors do not?
Craft a concise and compelling value proposition. The value proposition statement should be no more than two short sentences.
Channels
Determine how the organisation will reach the desired customer segments. Ask questions like:
- How will we communicate with customers?
- How will we deliver our offering to customers?
- Which channels are most cost-effective and scalable?
Identify and prioritise the most effective channels.
Revenue Streams
Identify how the organisation will make money. Ask questions like:
- What ways can we make money? For example, one-time purchase, subscription, ad revenue.
- What is the pricing strategy?
Define the revenue streams. Consider pairing with Strategyzer 7 Questions to test the strength of the proposed model.
Cost Structure
Outline the costs involved in operating the organisation. Ask questions like:
- What are the fixed and variable costs?
- What are the most significant expenses?
- How can we minimise costs while maximising value?
List and prioritise all major costs.
Unfair Advantage
Identify what gives this venture a competitive edge that cannot be easily copied. Ask questions like:
- What unique strengths do we have that competitors cannot replicate?
- How will we protect our competitive advantage?
Key Metrics
Identify and track a few KPIs that will be used to measure success. Ask questions like:
- What are the critical indicators of success for our organisation?
- What metrics should we track to measure progress?
- How will data be collected and analysed?
2
Test assumptions
Validate the canvas with real-world insights and feedback.
Identify any areas for improvement and address them. Ask questions like:
- How can we validate our offering with real customers?
- What feedback mechanisms can we use to test our ideas?
- Are there any assumptions that need further investigation?
3
Refine and iterate
Adjust the canvas based on findings and continuous feedback. Ask questions like:
- What changes do we need to make based on our findings?
- What triggers should we track to prompt an update of the canvas?