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MODULE 4

Lean Canvas

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WARM UP

Time to clap!

Duration: 5 to 10 minutes

This circle exercise is simple, but challenging and very effective for generating focus and alignment in a group. Participants stand in a circle and send a clap around the circle. Each clap involves two members of the group clapping their hands at the same time. The group tries to move the clap around the circle faster and faster with as much synchronization as possible. The exercise gets even more challenging when the “double clap” is introduced and the clap can change direction.

Step 1: The group stands in a circle.

Facilitator notes - Step 3 is very challenging for unfocused, stressed or very new groups. If the group struggles to pass the clap in step 3, consider using the opportunity to debrief by asking the group: “why was it such a challenge to pass the clap when the task became more complex? What would you need as a group to master it?”

Step 2 - One person starts (person A). They turn to the person next to them (person B) and the two clap at the same time while making eye contact, as synced as possible. Person B then turns to person C and they clap at the same time. The clap continues like this around the circle. The group should try to pass the clap more and more quickly with as many perfectly synchronized claps as possible.

Step 3 - When the group has mastered the above, introduce the double clap. When a pair claps twice, the direction of the clap reverses. This presents a challenge, as pairs must non-verbally agree whether to clap once or twice. The group must be highly focused and attentive to each other for the clap to continue smoothly around the circle in this step.

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MODULE 4

Lean Canvas

OVERALL OUTCOME

LEARNING OBJECTIVES

In this module you will put together what you already learned about your problem, solution, customers, strategy and value proposition by using the Lean Canvas tool, which will help you refine your business model and have a complete overview of how your business is structured.

You will understand how to use the Lean Canvas to structure your business model;
You will reflect on what channels you will use to reach customers;
You will learn what cost structure and revenue streams are;
You will learn how to price your product;
You will learn what to look out for to measure progress.

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MODULE 4

Session Overview

THE LEAN CANVAS

Channels, revenue streams, cost structure, pricing, unfair advantage, key metrics

SHOW AND TELL

Share your lean canvas

10 min

BREAK

RECAP

Wrap up and prepare

HOMEWORK

Wrap up and prepare

10 min

BREAK

20 min

90 min

60 min

10 min

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RECAP

Customer Journey Maps

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PRESENTATION

What is a business

model?

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What is a business model?

“All it really means is how you plan to make money” (Michael Lewis, 1999)

A business model is a broad range of descriptions and assumptions about your business that describe how your business creates, delivers and captures value.

Example:

Many internet companies are built with the same business model: they attract a huge number of users to the same website, and then sell to third parties the possibility to advertise products or services to their user base.

Can you think of some examples of internet companies with this business model? (other than Facebook :-)

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Local Example

Example of locally famous business model

Example of previous participant business model

Local Example

Insert picture of business

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GROUP DISCUSSION

What is your business model?

Describe it in one sentence

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PRESENTATION

The Lean Canvas

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The Lean Canvas

The Lean Canvas is a tool that helps you put your ideas and assumptions about your business on paper and helps you break down the structure of your business model in its most important components, like:

What is the problem I am addressing?
What makes my solution unique?
How do I measure success?
Who are my clients and how do I reach them?

Brief introduction into the logic of the structure:

In some occasions entrepreneurs are asked to present their business plan (e.g. when applying for a loan). This is a lengthy, time consuming document that explains in detail the functioning and plan for the business, and often impossible to create for businesses in ideation stage. The Lean Canvas is more suited to starting businesses and the idea behind it is to shorten the time you would use in preparing your business plan and rather devote it to testing your ideas. It is a one pager so that you don’t take more than 15/20 minutes to fill it in. The boxes guide you through the most important components you should reflect on so that in the end this one pager gives a very comprehensive idea of the totality of your business. Moreover, it gives the right amount of information for the entrepreneur to proceed to testing the idea with the market itself and can then adapted and changed accordingly.

Remember: the main point of the lean approach in this regard is to shorten your “planning time” before you bring your solution to the market!

Here an overview of the building blocks for it:

Problem: when you want to sell a solution (whether a product or a service), there should be a demand, in other words, at least one identifiable problem. Every customer segment you are going to define has its own problems, and it’s your business’s purpose to solve them. You are going to build your whole canvas over this building block. This section, then, must contain up to three priority problems.
Customer Segments: perhaps this is the first building block for you to establish. Because probably the first step to understanding your business will be to discover who your customer is. After all, you can only get to know what are the problems you are going to solve when you know the ones who face them. Thus, if there is more than one customer segment, you ought to develop one canvas for each.
Unique Value Proposition: This block shows how your business differentiates from others, what the value your customer will only have through your product or service, and no one else. Therefore, list what makes your brand stand out over the competition – i.e., why your customer must buy from you rather than your rival.
Solution: now that you know what and whose the problem is, it’s time to offer the solution. It must stand for the minimum set of functionalities and features (Minimum Viable Product) that allows you to deliver the value proposition from the previous block.
Channels: here, you have to inform the means you are going to use to reach your audience. That includes all marketing, communication, and distribution channels that you intend to adopt, both from traditional and digital media.
Revenue Streams: ask yourself “how much will my customer pay for my product/service?”. The price and the payment system was chosen are a very important part of your offer. That can mean the success or failure of your venture.
Cost Structure: gather here all the costs needed for you to be able to sell your product. You should list all the expenses, from research and development to monthly fees and salaries.
Key Metrics: it’s imperative for you to get to know what metrics you are going to apply when measuring your business’s performance. That’s the only way you may monitor the team towards the results.
Unfair Advantage: ask your team “what does this business/product/service have, that no one else does?”. This is possibly the most difficult question in the whole canvas. The answer has to be something that cannot be copied, mimicked, or acquired – that is unique in the market. It’s challenging, but it’s an essential matter, mainly if you intend to use the canvas for attracting partners and investors.

As you may have noticed, we are talking about only nine blocks, very objective. Therefore, it is about a modeling method that can be concluded within 20 minutes!

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Why use a lean canvas?

The lean canvas helps you to:

… make clear your assumptions about your business;
… have a visual guide of how your business works ;
… communicate better about what your business does;
… collect the most important information you need to test your business into the market.

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Problem

Solution

Key Metrics

Unique Value Proposition

Unfair Advantage

Customer Segments

Channels

Cost Structure

Revenue Streams

4

5

6

7

8

1

2

3

9

PRODUCT

MARKET

Maurya, A.(2012). Running LEAN, USA, O’Reilly Media Inc,

What problem(s) are you trying to solve?

Is someone else already providing a solution to this problem?

Who deals with these problems?��Who will be the first people to buy your solution?

Why are you different and worth getting attention?

What solution are you offering?

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Assignment

Let’s sum it up

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In the first sessions we talked about the problem you are trying to solve, the solution you suggest and its value, and who your customers are. Now it’s time to bring it all together as the first fundamental blocks of your business!

Use 4 post-its and write on each of them in one sentence:

The problem you are trying to solve

Your solution

A sketch of your typical or ideal customer

Your value proposition

Mix all the post its in one big bowl! On the trainer’s signal, grab a bunch of post-its and try to find whose business they belong to. Stick the post-it on the right participant until each participant has 4 post-its of different colours.

Assignment

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PRESENTATION

Channels

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Value position

Unfair Advantage

Customer Segments

Channels

Revenue Streams

5

6

2

3

9

MARKET

The channels block is about thinking in which ways you can reach your clients to sell them your product. Some ways you can reach your customers are for instance:

Social media
Ads
Emails
Radio & TV
Trade fairs
...many others!

Louisa is 21 years old and is really into sports, especially running. She is very active on Instagram, where she follows sports influencers, posts pictures of her workouts and keeps in contact with her friends from the last marathon.

In what ways can you reach Louisa to present to her your brand new line of running shoes?

GROUP BRAINSTORM!

Channels

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Trade fair

Radio

Blogs

Social media

Brand Partnerships

Remember!

You don’t have to be on all channels. Make sure to pick the ones that are most appropriate to your customers!

Pick one of your customers from your customer mapping (Module 2)

Event Networking

Activity - connect your ideal customer to the most appropriate channel(s)

Pick a second customer from your customer mapping (Module 2)

Posters / flyers

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Break

See you in 10 minutes!

Photo by Anna Urlapova from Pexels

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PRESENTATION

Revenue Streams

and Cost Structure

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Problem

Solution

Key Metrics

Unique Value Proposition

Unfair Advantage

Customer Segments

Channels

Cost Structure

Revenue Streams

4

5

6

7

8

1

2

3

9

PRODUCT

MARKET

Or in easier words:

How much you spend (cost structure)

vs

How much you earn (revenue streams)

WHY?

You want to identify all the places you are getting money from and all the places you have to spend money on to determine if your business is PROFITABLE

Revenue streams and cost structure

This slide introduces the boxes of revenue streams and costs structures as part of the lean canvas model.

Cost Structure involves describing fixed, variable and direct costs associated with your business. �Remember: Salary for yourself is also a cost! As well as costs for earlier identified channels

Revenue Streams is focussed on answering how you make money, where you list your sources of revenue.�Remember: If you know how to price your product, you can calculate your break even point - namely how many customers you need in order to have revenues cover costs.

Remember: You don’t have to write numbers in your lean canvas, but try and identify ALL the areas from which you get money and on which you spend it. The more complete your overview, the easier it will be to make sure you create a profitable model.

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Let’s take a look at these videos:

Revenue streams and cost structure

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The Next Economy Program

Activity - Is David’s business profitable?

REVENUE

David has a small brand of sports shoes. Place these examples in the respective columns and calculate the business’s profitability

Salaries

1000$ per month

Packaging

500$ per month

Marketing

100$ per month

Supplies

1000$ per month

Rent

750$ per month

Selling shoes in the shop

2000$ per month

Selling shoes on his webshop

700$ per month

Shoe repairs

500$ per month

PROFIT:

COST

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DISCUSS IN PAIRS

How do you make and

spend money?

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PRESENTATION

Introduction to Pricing

“One of the often missed opportunities for innovation is in pricing. We need to spend time to be creative in how we price our products and services.”

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Cost Driven

Organizations

Keep their costs as low as possible

Value Driven

Organizations

Offer high quality product

Create outstanding customer experience
Have personalized service
Leads to higher costs

Focus on efficiency
Choose less personal service
Limit distribution channels

Jamie is also a juice producer! He has a juice bar where customers can pick and choose what ingredients they want in their juice according to personal taste.

Claire produces juices from different types of fruits. She only sells wholesale to supermarkets and across two countries, and wants to expand to 3 others. Having such a big reach, she optimized production so that her product is extremely cheap and can accommodate a lot of different tastes from customers.

How does strategy drive costs?

The slide introduces the idea of how choosing a certain strategy for your business can determine your pricing and costs.

By moving through the earlier sections of the lean canvas, once participants have a better understanding of their customers and the segments they focus on, and they have a clear picture on your value proposition, they know better how they can make a difference with their product or service.

This should inform them in choosing on what type of strategy to focus, and whether their aim is to be a cost driven organization or a value driven organization. These are distinguished as follows.

Cost driven organisations strive to keep their costs as low as possible. The value proposition is not too complex: you want to provide your core activities for the lowest costs possible, need to focus on efficiency and make clear decisions on distribution channels (the more channels, the more expensive it is) and service (less or less personal service).

Value driven organisations strive to offer a high quality product creating outstanding experience and personalised service.

The examples of Claire and Jamie are given - read them out and ask the participants if this is clear to them.

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Decide how to price your product is one of the most challenging things when starting a business!

So… TEST!

How can you price your product or service?

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Example - iTunes

Before iTunes:

In the US, you could either spend 30$ for an album or 5$ for a single song. You had to go to a shop to buy one.

iTunes decided to charge by song at a price of 1.69$. You could listen to 30 seconds of the song for free to make sure you liked what you were about to buy.

Which option would you choose?

Ultimately, the accessible cost made buying music appealing and greatly reduced the risk to the consumer - if you don’t like an album, you lost 30$. If you don’t like a song, only 1,69$.

iTunes - We tend to forget it now, but the iTunes payment structure permanently altered the music industry, and re-shaped how we consume new work from our favourite artists. Back in the day, consumers had two choices; $30 for an album, or $5 for a single. These were sold in physical units, which you had to buy from a shop. Seems almost primitive. Aside from the leap to owning files rather than discs, the cleverest part of iTunes model was probably the $1.69 price for each song. This was accompanied by the “Freemium” approach of letting the customer hear a 30-second sample of the song, in order to make good purchase decisions. The tech made music shareable, but the price made it accessible and appealing. Customers greatly reduced their risk (try before you buy) and only paid for what they wanted. This meant buying 5-6 tracks from a new album rather than the full thing, then could go on to buy songs from new artists more speculatively, with the worst-case scenario now a perceived loss of $1.69 Another point to note, the $20 iTunes card didn’t equal a round number of songs, so the “leftover” credits encouraged customers to buy another card. Simple, devious, effective.

If this is unclear, some other examples that can be discussed are as follows:

Uber - The tech behind Uber is impressive, but it’s the pricing that really drives the unique value proposition. What Uber’s pricing strategy gives the customer is the perception of choice; you can pay only $7 if you’re willing to ride-share with a random passenger (UberPool), or pay more for a fancier car (UberBlack). The amount a passenger pays is also dependent on how busy the roads are (Surge Pricing), which is designed to incentivize a constant rebalancing of supply and demand (raising fare prices to attract more drivers, which lowers the oversupply of customers, thus restoring the prices) Their payment format also fits their Value Proposition of convenience and simplicity; a completely cashless experience through PayPal. This had created loyalty and goodwill from customers, who are no longer financially penalized for wanting to pay by card, like they are in regular taxis.

Groupon - Groupon is running a “Stock Option” pricing model. That is, customers pay a premium for the right, but not the obligation, to receive a particular service within a set date range. For example, you can pay $39 and receive a massage usually priced at $89, as long as you claim it in the next two months. This pricing model is clever, as both parties feel that they have won. Customers get a perceived discount, and retailers get a guaranteed source of revenue (especially if customers don’t claim their purchases in the agreed time). This pricing model changes how people shop online. Customers are now loyal to the site (Groupon) and the discounts, rather than the individual service provider (the masseur).

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Activity

Pricing strategy

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Ask yourself these questions to identify pricing options:

What are other businesses in your field charging for similar products?
What are the costs derived from my business model?
Is your business more values driven or cost driven?
What type of customer do you want to attract?

Remember!

You likely don’t have enough information to make a final decision about your price now. That’s why it’s important to test it with the actual customer.

Remember!

If you want your customers to pay for your product, better be upfront about it!

Activity - Try to determine 3 possible pricing options

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Break

See you in 10 minutes!

Photo by Anna Urlapova from Pexels

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PRESENTATION

Unfair Advantage

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GROUP DISCUSSION

What happens if a big

company steals your idea?

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Value position

Unfair Advantage

Customer Segments

Channels

Revenue Streams

5

6

2

3

9

MARKET

Once you introduce your product or service, if it is compelling, others will copy it. And it will no longer be so “different”.

So what advantage do you have (or can you create) that are difficult to copy? Unfair advantages? Or you might call them sustainable, competitive advantages – advantages that are not easy to copy.

In order to protect your business, you need to make sure there are barriers in place that will discourage others from copying your solution.

Gaining your unfair advantage

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Intellectual property includes intangible creations of the human intellect, including ideas, formulas, designs etc. Since it is recognised as property, it can be protected against theft.

Some ways to protect your intellectual property:

Copyrights: the owner is the only person with the right to make copies of its property

Example: a piece of music or art

Patents: the owner can prevent others from making, using or selling an invention while still exposing the invention itself
Trademarks: a recognisable sign or logo that cannot be copied by others
Trade secrets: a formula or process or design that has economic value because it cannot readily be imagined by others

Intellectual property

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Intellectual property isn’t the only sustainable competitive advantage. Advantages can come from many areas, including:�

Strategic partnerships;
Established relationships with major customers;
The strength of your team;
Your head-start in the market;
Validation by industry gurus who like your solution;
An existing customer community you’ve already built.

Other unfair advantages

One of FACEBOOK’s competitive advantage is the network effect. The more people use it, the more value each customer gets out of it. In principle, anyone can build another social network, but it is difficult to copy the network effect created by all its users!

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Activity - What are the unfair advantages of these businesses?

Unfair advantage:

T(H)OM-ATO TRUCK

After becoming quite famous on Youtube as food blogger and tomato expert, Thom decided to invest some money to open a food truck where he sells different types of tomatoes and tomato juices. He sells a huge variety of tomatoes and he knows everything about his products. However, because he grows his tomatoes himself, using organic and biological products, the cost of them and hence the selling price is higher than his competitors.

What are the unfair advantages of T(h)om-ato truck?

Unfair advantage:

MERCY’S SCHOOL UNIFORMS

Mercy is a great and experienced tailor and a very sociable person as well: she knows almost everyone in town. Because of these skills, few months ago she made agreements with most of the elementary schools in her city to design and produce their school uniforms. In order to keep fulfilling her clients’ need, she keep them involved in her creative process and sometimes offer them discount. But she is afraid that because a new tailoring school just opened in the city, the students might “steal” her work

What are the unfair advantages of Mercy’s business?

Unfair advantage:

The following three slides are an activity to gauge the understanding of the differences between different types of key metrics. Do this activity in small groups, asking participants to discuss what they think the unfair advantages are, and present therese to the class. The answers can be found below:�T(H)OM-ATO FOOD TRUCK - Unfair advantages:

Thom is quite famous because of his Youtube videos
Thom has a reputation as tomato expert
Thom knows a lot about the product he is selling, and tell to his customers how to best cook them and other info
Are there any other unfair advantages that the entrepreneurs came up with?

MERCY’S SCHOOL UNIFORMS - Unfair advantages:

Mercy has partnerships with almost all the potential clients
Mercy keeps her clients involved, engaged and retained through feedback and discounts
Mercy has a lot experience and talent
Are there any other unfair advantages that the entrepreneurs came up with?

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Activity - Match the unfair advantages with the right company

Unfair advantage:

Brand awareness across age sectors

Unfair advantage:

Global IT infrastructures

Unfair advantage:

Celebrities’ names are linked to it

Unfair advantage:

Proved rating system with millions of users

Unfair advantage:

A brand face - a very charismatic CEO that everyone recognizes

Unfair advantage:

A trade secret

Unfair advantage:

Inimitable design

Disney:

Brand awareness across age sectors: even if it is a children brand, it is known across all the different age groups, from grandparents to kids. This is an unfair advantage as Disney characters are known and loved and cannot be replaced. Think about it, if you would have to buy a toy from your granddaughter.. Would you buy a Disney character that she loves or one that she does not know?
Celebrities names: Disney launched many celebrity kids that now are famous singers and actors across the world. This is an advantage as Disney is associated in the mind of the customers with several celebrities, thus giving a status to the brand.

Uber:

Proved rating system used by millions of people, that allows users to trust the service and rely on the drivers. The more people use it, the more each customer trust it. In principle, anyone can build a service like Uber, but it is very difficult to reach the network that Uber has!
Global IT infrastructure that ensures reliability and service quality as it gather a huge quantity of data all over the world. This is an advantage compared to the competitors because it requires a huge number of users, that other competitors do not have.

Apple:

a “brand face”, Apple’s CEO: Steve Jobs, seen as a visionary and known for his innovative ideas. This gives a status to the brand, as the customers perceive its products reflect its CEO, being innovative and cutting-edge. Many competitors cannot rely on such a famous CEO as a guarantee of the brand quality in consumers’ minds.
Inimitable design: Apple’s products are iconic and represent a status. Apple’s dedication to design is so strong that the design team has precedence over the engineering team. In other words, the designers dictate the mold and user experience, and the engineers have to match the hardware so it’ll fit inside.Steve Jobs, the CEO of Apple, wants his products to be like “fine jewelry” — beautiful, crisp, and exact. He’s not just making electronics. He’s creating art.Though most people think of Apple as a technology company, they’re actually a design company that reframes existing technology. Sony had the MP3 player long before Apple did, but Apple created the iPod. They proved that consumer-oriented design is critical.

Coca-Cola:

A secret recipe that makes Coca-Cola different from all the competitors and recognizable among the others. Think about it.. You could recognize a Coca-Cola from its taste without seeing the label. This makes the brand unique and impossible to copy.

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What is your unfair advantage?

Discuss in pairs

ACTIVITY

Photo by heylagostechie

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PRESENTATION

Key Metrics

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The Lean Methodology is based on continuous improvement through measuring progress, which is where the key metrics come in.
Key Metrics tell you how your business is doing.
Your Key Metrics are your definition of success. Essentially, you are always searching for the key number that tells you how your business is doing in real-time.

Key Metrics

Use this slide to explain the notion of Key Metrics and why these are important.

The Lean Methodology is based on continuous improvement. This happens first and foremostly through accountability and surefire ways and tools through which progress is measured, which is where the key metrics come in.
Key Metrics are the numbers that tell you how your business is doing. You should view them as preliminary monitors of performance. By seeing the rate at which your key metrics have been fulfilled you should be able to evaluate the strength and viability of your product or service.
Your Key Metrics are your definition of success. Essentially, you are always searching for the key number that tells you how your business is doing in real-time before you get the sales report.
One number (potentially in combination with a few others) that says everything else is working

Leading vs. Lagging Metrics; Actionable vs. Vanity Metrics - You want a leading metric and a lagging metric.

Leading metrics measure your activity before results are visible, whereas lagging metrics capture the gradual changes that take time to appear.
Individually they paint a very biased picture, but together they bring clarity.

You should always focus on actionable metrics instead of vanity metrics. Actionable metrics are metrics that can provide information which contributes to the evolution of your MVP and growth of your lean startup. They drive business. Vanity metrics are metrics that look good without being meaningful. What is a vanity metric for your business could be the actionable metric of another.

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Activity - What types of key metrics?

T(H)OM-ATO TRUCK

Remember Thom? He is a famous Youtube food blogger and he owns a food truck where he sells different types of tomatoes and tomato juices. He sells a huge variety of tomatoes and he knows everything about his products.

Where do the following metrics belong on the graph?

Are there other metrics Thom could use?

Number of people recognizing Thom in the street

Annual Net income

Number of tomatoes purchased by each customer

Percentage of people who visit the truck that buy something

Time that people spend at the food truck

Followers on Social Media pages

Annual tomato sales

Customer satisfaction (likelihood to suggest to a friend)

Leading metrics

Lagging metrics

Vanity metrics

Actionable metrics

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Leading metrics

Lagging metrics

Vanity metrics

Actionable metrics

Activity - What types of key metrics?

ROSE’S DELIVERY HAIRDRESSER

Rose is an hairdresser but due to COVID19, she lost her job at the salon she worked for. However, she spot a opportunity: delivering haircuts at people’s houses! She created a website, where customers can get to know her service and book their appointments online.

Where do the following metrics belong on the graph?

Are there other metrics Rose could use?

Number of people visiting the webpage

Social media shares

Percentage of people who view the website that book an appointment

Annual revenue

Number of haircuts done

Percentage new/returning customers

Number of positive reviews on the website

Percentage of people who view the website that buy a product

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Activity - What are the key metrics?

Percentage of users who end their search on first page

Users can truly find what they are looking for &
Fast search

Value proposition

Key metric

Is this a leading or lagging?

Percentage of shopping cart abandoned rate

Buy books from a pc at home (without having to go to a bookshop)

Customer satisfaction

Travelers can get authentic experiences &
Extra monetization of vacant places for homeowners

Numbers of rides per month

People get a cheap and trustworthy drive &
Anyone with a car of 5yo driving licence can make money by offering rides

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Trace your steps within your business plan, to see what actually matters.

As a general example: profits are obtained from revenue from units sold. How is this influenced? By new customers or returning customers? From outreach and marketing or from people who like quality of product and thus return?

Specifically, in the case of Twitter - one of their key metrics is the number of followers users have. If a user has 20+ followers, they are more likely to become an engaged user…

Questions for Discussion:

How will you measure your customer base and their behaviour?
How will you measure the effectiveness of your solution?
How will you measure your financial performance?
How will you measure your social impact?
How will you measure your traction?

YOUR Key Metrics

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TODAY

In summary

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Ultimately, the lean canvas allows you to build a scalable business model, by maximizing your learnings with experiments and get traction in growth and sales.
Volunteer: Who can quickly summarise and explain each box?

Problem

Solution

Key Metrics

Unique Value Proposition

Unfair Advantage

Customer Segments

Channels

Cost Structure

Revenue Streams

PRODUCT

MARKET

Lean Canvas

Existing alternatives

1

2

Early adopters

3

4

1

Understand the problem

Is the problem big enough? Who has the problem? What’s the key problem and how is it solved today?

2

Define the solution

Build a demo to visualize the solution and test is with customers. Is your solution working? Who are early adopters and are they willing to pay?

3

Validate whether people like it

Build your MVP to test it with the early adaptors. Do they share your value proposition (UVP)?, are there sufficient clients, who provide you learnings to improve and do they pay?

4

Validate whether the market adopts it

Redefine your product and launch! Do people like it? How will you scale customers and do you have a viable business?

Summary

1

2

3

4

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The key is to keep learning, improving and measuring, to become a viable business... and remain one!

Telling a story: your lean canvas is a way for you to explore and link all the concepts of your business story together, where each box links to each other. �
Validation through experiments: to replace your thoughts and guesses with evidence, you need to test and improve your ideas wherever possible!�
Keep iterating: As good as this canvas might look, we don’t want to fall in love with our first idea. Good ideas survive competition, and by creating and testing lots of ideas, the great ones rise to the top.

Ideas

Data

Product

Learn

Improve

Measure

Connecting the boxes

Use this slide for summary statements and bringing all the sections together… connect the boxes!

We want our canvas to tell a compelling story, and that means the pieces need to fit together. Specifically, the customers we describe on the right need to match the problems on the left. They need to care about the Unique Value Propositions in the middle. The solutions we’ve designed need to be able to make those Value Propositions a reality. The channels need to lead us to a substantial pool of customers. Customers must be willing and able to pay for these Value Propositions, through the Revenue Streams outlined at the bottom. These revenues need to outpace our Costs, or else we’ll never break even. The Key Metrics need to describe our customer’s enthusiasm, both through their spending and whether or not they get the Value Proposition they’re looking for. Our Unfair Advantage has to be real, and relate to at least one other part of the canvas.

Validation Through Experiments: These boxes are full of guesses, at least for now. We want to replace those guesses with evidence, and that come from validating each point with an experiment. For example, we can use pre-orders to validate that our customers are real and that our prices are acceptable. We can create a prototype to see if our solutions can genuinely deliver our Unique Value Proposition, and to see if our Cost Structure is realistic. We can conduct customer interviews to see if people genuinely care enough about these problems to pay for a solution. We can trial a series of solutions, to see if our Unfair Advantage is real, or if there are multiple ways of serving our customers. Remember, a failed experiment is a success – it saves an incredible amount of time, money and energy, and gives you insights that will lead you towards a model that genuinely works.

Keep Iterating

As good as this canvas might look, we don’t want to fall in love with our first idea.
Good ideas survive competition, and by creating and testing lots of ideas, the great ones rise to the top.
This doesn’t have to be hard work – you can start by changing one or two elements of the first Lean Canvas.
For example:

Keep the customer the same, but focus on a different problem
Keep the problem the same, but focus on a different customer base
Keep the same Unique Value Proposition, but focus on a different solution
Keep the same Unique Value Proposition, but focus on different revenue streams
Use totally different Channels, like doing everything online or everything in person
Focus on a different part of the Value Chain
Use a combination of existing solutions to solve a customer’s problem

What usually happens is that you discover that most alternative models don’t work…but two or three might.

This means you go into your next round of validation and prototyping with three good ideas, taking the emotional attachment away from that first idea and making you a better judge of their potential.

50 of 51

ACTIVITY

Presenting and Pitching

51 of 51

HOMEWORK

Improve on your Lean Canvas!