The Lean Canvas
To view the article on Medium click here.
The Lean Canvas is the simplest method of drawing out a business plan, simply put it’s a single A4 page with headings and boxes that will show the essence of multimillion-dollar corporations bootstrapped startups or a user-story-epic for consideration. While the canvas was designed by Ash Maurya to be used for being entrepreneur-focused, existing companies can find value in using it due to it being as actionable as possible. Fundamentally, the Lean Canvas shows how valid an idea is. Quickly.
Ash Maurya may not have realised the canvas can be used for any idea, internal to an existing company or externally as a new venture. It underlines a tactical plan or blueprint that guides the businessperson as they navigate their way through the ideation process. The fundamental importance of filling in the canvas is that it allows a macro view of an idea, all aspects of your concept. The unique advantage of this outlook enables the prioritisation of the greatest risk assumptions, ensuring the ideator to pinpoint where their energy needs to be focused. This all together aids the ability to shape a clear vision and plan for the future, without the canvas becoming a one-off deliverable.
For example, if I was to look at my business venture which was focused on creating an app to help students make better choices on their education paths.
Problem and Customer Segments
The above image shows both the potential problem and customers segments. The issue here is only one overarching problem has been stated. It would have been better to split the overarching concern into a ‘Top 3’ style. With regard to the Customer Segment, there are minimal user roles. It would have been useful to break these down further into the different types of students that would be using the Minimum Viable Product.
For instance, in the case of Medium.com, the customer is the blog author, while the user is the reader. In the case of this scenario, the customer is the student and the professionals in careers, while both are users of the app.
The key learning here is to understand there are large segments and subsegments. By recognising both it will show the depth of the problem and gives you the knowledge to show that the business plan works for a variety of personas.
Unique Value Proposition (UVP)
The UVP is the statement that captures the users of your product as Steve Blank author of The Four Steps to the Epiphany said the “Unique Value Proposition: A single, clear compelling message that states why you are different and worth buying.” My UVP neither captures nor compels any individuals to be interested in my product. To improve upon this I would make sure to focus on the benefits that the user can extract after using the product, rather than highlighting features.
The high-level concept does need to be further refined but the essence of an elevator pitch is there.
Solution
My solution statement has the same mistakes as my problem statement, it’s focused around one overarching problem. This statement can be broken down to give solutions to the top 3 problems.
Channels
The channels are the paths to the customer. How are you going to grab their attention so that you can show them the wonderful product you’re selling. In this section, I have written down virtually all the possible techniques for getting customers attention. Free and Paid; Inbound vs Outbound; Direct vs Automated; Direct vs Indirect; referral. Content marketing is the almost via solution at the start point utilising a tool kit of Content, Search Engine Optimisation and Social Media. By A/B testing various perspectives of your problem and solution using a combination of inbound channels like blog platforms, whitepapers and webinars you can expand the contents reach through SEO and Social media.
Revenue Streams & Cost Structure
My idea did not stem from wanting to become rich, it was about helping at least one student make an informed decision on their educational path. I consistently deferred the question of how I was to make money. In the revenue stream section, you can see that I had ideas for starting funding but no real tangible ways of creating cash flow. Utilising a free trial plan with the foresight to convert these customers into paying users via a subscription model. This would have allowed me to force a conversion decision allowing me to inspect and adapt the app at speed. In regards to the cost structure, a high-level numerical calculation should have been used to calculate a breakeven point for the first MVP.
Many ideas fail at this stage as they do not consider the commercial viability simply remaining a pipe-dream!
Key Metrics
My example of a key metric is not one that I would advocate using. The reason being, how do you calculate help? Is it the number of people that use the app? Or the number of sign-ups? Defining help in this example is the metric that enables me to view how I am doing in real-time.
I don’t think can stress the importance of having the correct metric at the right stage to drive the behaviour needed. For example in the early stages, adoption will be important, while later the quality of consumer feedback or revenue will play a major part if your idea is one that generates revenue.
Unfair Advantage
“A real unfair advantage is something that cannot be easily copied or bought.” — Jason Cohen (A Smart Bear)
The points given in the Unfair Advantage are not ones that I would now consider valid. In reality, all have the ability to be used by anyone that decides to copy the product. To truly be unfair I would have to have access to insider information; be a personal authority on the domain or possess ‘expert’ endorsements for the product.
With all this in place, we have a fully complete Lean Canvas that can be used to start a dialogue with advisors and investors enabling us to see if the idea has legs or if certain area need further refinement.