If you’re in the process of developing a new product or service, the Lean Canvas business model can help you work smarter, not harder to deliver a product that solves real problems for your customers.
The concept of a Lean Startup business is all about finding a gap in the market in the most efficient way possible in terms of time and money spent. It’s the amalgamation of multiple techniques that help your new product or service get to market quicker whilst avoiding the development of a product that no-one wants.
For many fledgling entrepreneurs in the idea phase of setting up in business, it can feel like they are simply taking a stab in the dark; but it doesn’t have to be such a hit-or-miss proposition. With a little lean thinking it’s possible to develop and refine your ideas to mitigate market risks.
The Key Components Of The Lean Canvas
The problem box in Lean Canvas was created to list one to three high priority problems that need solving. The wrong products are built when several businesses fail to apply good effort, time and fiscal resources. It is thus crucial in understanding the problem first.
It has been observed that if the target is to attract more than one range of customers, for example, engineers and accountants, it is better to create a canvas for each one. The Problem box and CS can be seen as linked with each other intrinsically, i.e. You can’t think of any problems without a Customer Segment, and vice versa.
Unique Value Proposition
Unique Value Proposition is situated in the middle of the Lean Canvas. A promise of value to be delivered to the customers is called a value proposition. This should be the main reason a prospective buyer has to buy from you. Thinking and understanding why your product is dissimilar and why should your Customer Segments want to buy or invest in your company and your product is the best way to understand Unique Value Proposition.
A cordial solution has to be found once the problem has been recognized. This is the reason why the Minimum Viable Product concept within a Solution box was introduced in the Lean Canvas. The jackpot has been finding the solution to the problem. The solution cannot ‘be found in the office building but out there in the streets.’ The best way to understand is by interviewing your Customer Segments, asking them questions and taking those learnings into account.
It is better for a Startup to pivot on one metric and develop on it. The metrics should include the range of services or products you intend to provide. Since the wrong one could be disastrous to the startup, it is therefore critical that the right metric is identified. Irrespective of industry or size, every business will have some key metrics that are used to monitor performance.
Channels are the best way for you to reach out to your Customer Segment. It is essential to focus on learning about the channels than to not to think about scale in the initial stages. Channels, which are free as well as paid, can be used to reach your customer directly. Some examples of Channels are social, trade shows, email, CPC ads, radio & TV, blogs, webinars, articles etc.
The entire variable cost, as well as the fixed costs, is to be listed here. Questions regarding Cost Structure are to be thought here. How much will it cost to build a page? What is the amount required to run your company in a month? What will be the cost to interview your customer segment? How much do market research papers cost? etc. A rough break-even point can then be calculated from these costs and potential revenue streams.
It is common for startups to lower their cost or even offer it for free in the beginning to gain attraction. The key is it actually delays or even avoids getting checked for validity. It has been seen that getting people to sign up for something for free is a lot different than asking them to pay as they are more interested in free products.
Ash Maurya, Creator of the Lean Canvas said, “You may initially have to leave this box blank but the reason it’s here is to have you really think about how you can both make yourself different and make your difference matter”. A startup should always have the capability to recognise whether or not it has an unfair advantage over others. Unfair advantage can come in different forms like getting expert endorsements, a dream team, insider information, existing customers etc.
Are You Ready To Create Your Own Lean Canvas Business Plan?
On Saturday 6th October in London, Christian Rodwell [#ETRR Founder] and Dharmesh Raithata [Product Partner, Forward Partners] will be hosting a 1 Day Workshop to help you design your very own Lean Canvas Business Plan.
This is a rare opportunity to spend a day with other aspiring entrepreneurs receiving hands on support and advice to help you create a winning business plan that is designed specifically to test and validate your ideas and to gain customer feedback in the shortest time possible.
To find out more about the workshop and to book your ticket CLICK HERE