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In the ever-changing world of innovation, a well-defined roadmap is essential to steer a startup towards financial sustainability. The Lean Canvas model does just that – it is a valuable one-page template for brainstorming early-stage business models.

It’s designed to be an ever-evolving blueprint that assists entrepreneurs in validating their ideas, mitigating risks, and iterating their business models. Its approach calls for concise content, making it a practical framework to outline your business concept. And most importantly, it enables you to align strategies with market demands.

Below we take a look at how to complete the Lean Canvas tool.

How To Use the Lean Canvas Template for Business Model Development

As mentioned above, the Lean Canvas is a strategic management tool that helps startups and entrepreneurs develop a concise and actionable business plan. It is divided into several blocks, each focusing on crucial aspects of a business model.

Let’s take a look at each block:

Identifies the top 3 problems and pain points that your target audience experience. The end goal is to understand their problems better and identify how your solution solves their problems / and alleviates the pain.

Clearly outline your business solution and/or product offering that solves the problems your customers are experiencing. Describes how your solution effectively meets the market’s demands.

Learn More: Lean Canvas Model: Crafting Solutions and Prioritizing Features

Key Metrics

Determines the key performance indicators to help you measure your business’s performance and progress. These metrics inform your business development.

Unique Value Proposition (UVP)

Define what sets your business apart from competitors and why potential customers will choose your product or service.

Read More: What Is Unfair Advantage in Lean Canvas?

Highlights the channels you intend to reach and engage your customers. This may include online platforms, partnerships, or direct sales channels.

Customer Segments

Specifies the different market segments you plan to target. This block helps you understand your primary audience, which is critical for tailoring your offering. Learn how ‘ customer segment s’ can impact your business success and optimize your strategy accordingly.

Cost Structure

This breaks down the expenses involved in operating your business. This includes production costs, marketing expenses, and other relevant financials.

Read More: The Cost Structure Lean Canvas

Revenue Streams

Outline the sources of revenue for your business . This may include sales, subscriptions, licensing fees, or any other means through which your business generates income.

What are the benefits of using the Lean Canvas?

Ash Maurya pioneered the Lean Canvas model as an invaluable tool for startups using the Lean Startup methodology. By filling out the one-page lean canvas, you can clearly define your business model and identify any weaknesses or gaps in your strategy.

Read More: Startup Project Management: The Key to Success

The main benefit of the lean canvas is that it forces you to synthesize your business idea down to its core components. This includes identifying your target customers, the problem you are solving for them, your unique value proposition, the channels you will use to reach customers, and your revenue streams. Going through this exercise early on ensures your entire team has alignment on the fundamentals of your business.

Another advantage is that the lean canvas lends itself well to experimentation and iteration. As you test parts of your business model and gain new customer insights, you can quickly update your canvas to reflect pivot decisions. This builds momentum by keeping your team focused on the right metrics and priorities.

Tools to create a Lean Startup model

The advice has been, traditionally, to print out a lean canvas and post it somewhere to fill with sticky notes. This can often be challenging as teams are frequently remote and may need access to the information outside the office because the lean canvas should be tracked alongside progress.

Tools to create a Lean canvas online include project management tools like Leantime and tools like Leanstack.

Leantime Features Include

  • Task Management
  • Idea Management
  • Goals Tracking
  • SWOT Analysis, Empathy Maps, Project Briefs
  • Time tracking
  • AI Task Prioritization
  • Strategy Management
  • Program Plan management
  • And much more

Being able to map out your initial business model and then immediately connect it to a growing business is a unique value proposition of using a tool like Leantime. It’s an ideal companion to both growing and developing your business ideas simultaneously. Quickly see the progress and keep the growth on track with our features .

In Summary – Optimize Business Development with the Lean Canvas

Overall, the lean canvas model perfectly complements the Lean Startup approach. Enabling fast learning and adaptation increases your chances of finding product-market fit and launching a sustainable, scalable business.

Completing the Lean Canvas template helps create a comprehensive understanding of your business model and guides strategic decision-making. Regularly revisiting and revising (also known as iterating), the canvas keeps your business strategies aligned with market dynamics and ensures that you’re on the path to scale and grow.

Using the Lean Canvas framework is a proactive way to advance your business model, sets the stage for informed decision-making, and helps define an adaptable business model that stands the test of time.

Explore More About Lean Startup Philosophy — we’re passionate about helping you navigate the world of entrepreneurship and innovation through the lens of the Lean Startup methodology.

Frequently Asked Questions

The 9 sections are Customer Segments, Problem, Unique Value Proposition, Solution, Channels, Revenue Streams, Cost Structure, Key Metrics, and Unfair Advantage.

It’s best to complete your initial lean canvas during customer discovery and before building your minimum viable product (MVP). Revisit and iterate on it throughout product development.

The goal is to summarize your business model at a high level on one page. Capture the essential elements without going into too much depth.

The lean canvas is meant to complement a business plan, not serve as a comprehensive plan itself. Use it to align your team and identify gaps before creating your full plan.

Yes, the canvas should evolve as you learn from experiments and make pivots. Review and update it frequently to stay on track.

Here are some other links you may be interested in…

  • Lean Business Solutions
  • Understanding the Lean Canvas: The Blueprint of Modern Lean Innovation
  • Creating a successful startup: Business development tools to prevent failure
  • Crafting Solutions and Prioritizing Features with the Lean Canvas Model for Effective Business Development
  • Communicating Business Development with the Lean Canvas

the lean canvas business model with basic instructions

Jenny Jackson

Jenny Jackson, a seasoned Entrepreneur-in-Residence (EIR), brings a wealth of expertise in innovation process, design thinking, and research & development. Since 2019, she has demonstrated her commitment to fostering business growth as a dedicated Business Mentor for Charlotte Launch (formerly Ventureprise Launch) and as a leader guiding two research teams in the prestigious National Science Foundation’s (NSF) iCorps program.Jenny's journey in entrepreneurship and innovation has been marked by a series of impactful roles. Prior to joining the dynamic team at the Center for Entrepreneurship and Innovation at UNC Charlotte, she provided invaluable support to startups, labs, and incubators, showcasing her dedication to fostering emerging ventures.Jenny holds a Master's in Organization Development from Queens University of Charlotte and a Bachelor’s in Industrial Technology with a concentration in Graphic Communications from North Carolina A&T State University.Beyond her professional achievements, Jenny is an advocate for children's rights and autism acceptance, reflecting her dedication to making a positive impact in the world. She is also a member of Delta Sigma Theta Sorority, Inc. she continues to champion causes that align with her values.#InnovationExpert #DesignThinking #StartupMentor #BusinessGrowth #ResearchandDevelopment

Support Leantime

Leantime is an open source project and lives and breathes through its community.

If you like Leantime and want to support us you can start by giving us a Star on Github or through a sponsorship.

the lean canvas business model with basic instructions

The new update to the international bestseller is here.

Get your copy, lean canvas, deconstruct your business model on a lean canvas.

Business plans take too long to write, are seldom updated, and almost never read by others.

When you're going really fast and under conditions of extreme uncertainty, you need dynamic models, not static plans.

The Lean Canvas replaces long and boring business plans with a 1-page business model that takes 20 minutes to create and gets read.

Used by over a million people.

Lean Canvas

Our free Foundations course teaches you how to use a Lean Canvas to deconstruct your idea and systematically build a business model that works.

Lean Canvas is used by over a million people that span startups, universities, and large enterprises.

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What is a Lean Canvas?

Lean Canvas is a 1-page business plan template created by Ash Maurya that helps you deconstruct your idea into its key assumptions. It is adapted from Alex Osterwalder's Business Model Canvas and optimized for Lean Startups. It replaces elaborate business plans with a single page business model.

"Any startup should use this tool! Invaluable. Seriously." Matthieu Lefort CEO Xtremgo
"Lean Canvas helped us keep our ideas succinct yet robust. It feels like we actually fleshed something out without having to write a 20 page business plan! Amazing!" Pamela Capalad
"Lean Canvas is a brilliant tool for startups. I'm addicted!" Julian Miller Founder, Ontract
"Lean Canvas has been a HUGE asset for me in developing business models for my startups. As an entrepreneur, It's invaluable for me to be able to literally see my business before in a visual format and assess it." Paul Angelini

Join the Practice Trumps Theory Newsletter

Weekly articles on battle-tested recipes, techniques, and playbooks for systematically achieving product/market fit.

Are You Ready To Level Up?

Our free Foundations course teaches you key mindsets, strategies, and tactics for unlocking your entrepreneurial potential.

Includes Lean Canvas and Continuous Innovation course.

the lean canvas business model with basic instructions

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How to create a Lean Canvas (with template)

the lean canvas business model with basic instructions

When I worked as a business analyst, crafting and adhering to a business plan used to drive me nuts. I’d spend hours thinking over every aspect of our product, only to feel overwhelmed by the volume of information I collected.

How To Create A Lean Canvas (With Template)

A business plan aims to foster a shared understanding of your product so that your team knows how to prioritize their time. However, I found this extremely difficult when working out of a 30 page document littered with advanced spreadsheets. Often, it was so complicated that it created more waste than value.

Thankfully, Ash Maurya , founder of LEANSTACK , came up with the Lean Canvas, a product management template that enables you to develop a new business and understand its essential aspects.

In this article, you will learn what a Lean Canvas is, how to use it, and how it differs from traditional business model canvases.

What is a Lean Canvas?

A Lean Canvas is a single, visual document that outlines all the critical aspects you need to consider when moving from a potential idea to a mature business.

Constructing a Lean Canvas is more than just a simple brainstorm. During the process, you make decisions on business fundamentals by iterating, learning, and adapting.

You can easily create a Lean Canvas, as long as you think strategically about your prospective product. Gathering all the blocks together can be time consuming, but a well crafted Lean Canvas will accelerate your decision-making and allow you to focus on what matters most.

When crafting a Lean Canvas, you need to follow a specific order that lets you develop a clear story for your product. A Lean Canvas looks like:

Lean Canvas

You can download a copy of this template for yourself here.

Within the template, there are nine distinct boxes to fill:

  • Customer segments
  • Unique value proposition
  • Revenue streams
  • Cost structure
  • Key metrics
  • Unfair advantage

1 . Customer segments

First comes your customers. Without them, you have nothing.

Define the target audience you aim to serve as precisely as possible. You can have different levels. Make them clear and start by focusing on the earliest adopters.

For example, Tesla initially targeted sports car lovers because it wanted to create a fancy electric car. As early adopters, they got Martin Eberhard, an American inventor, and Marc Tarpenning , an American engineer. Although they co-founded Tesla, they started using cars so others could become interested in them.

2 . Problem

Name the problems your target audience faces. Make the problems brief and easy to understand. Mention the available alternatives to the identified problems.

Going back to our example, Tesla visualized the problem of high fuel consumption and wanted to foster an alternative to it. The current options were other car brands, such as General Motors.

the lean canvas business model with basic instructions

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the lean canvas business model with basic instructions

3 . Unique value proposition

Define why customers would come to you. In other words, make it clear how you create value by addressing the problems of your customer segments.

Tesla revolutionized the electric vehicle movement by introducing high efficiency batteries that stood up against their gas counterparts. Because Tesla produced a product that no one else had, it was able to carve out a unique market niche and present consumers with value.

4. Solution

Reflect on how you solved the problem by describing your solution in a high-level way. It might help if you focus on the top three features that you want your product to deliver. Products succeed when they target a problem and then introduce a novel solution to the market.

For instance, Tesla aimed to develop electric cars with high performance. That decision pushed Tesla towards a particular type of consumer aimed at true car enthusiasts.

5 . Channels

When designing any product, it’s important that you anticipate how and where your customers will interact with your solution. This is where channels come into play. You might want to sell directly to customers in retail stores, distribute online, or work through wholesale agreements.

Tesla opened direct-to-consumer retail stores to build a closer relationship with its customers. You can do the same, or explore different options like affiliates, sales force, etc.

6 . Revenue streams

Think about where your income will come from. Most successful products find more than one revenue stream. These might be from subscriptions, premium subscribers, ads, commission, etc.

Tesla initially didn’t have a revenue stream, but it had venture capital funds. As the company matured, it found additional ways to generate consistent revenue and moved away from its reliance on outside funding.

More great articles from LogRocket:

  • How to implement issue management to improve your product
  • 8 ways to reduce cycle time and build a better product
  • What is a PERT chart and how to make one
  • Discover how to use behavioral analytics to create a great product experience
  • Explore six tried and true product management frameworks you should know
  • Advisory boards aren’t just for executives. Join LogRocket’s Content Advisory Board. You’ll help inform the type of content we create and get access to exclusive meetups, social accreditation, and swag.

7 . Cost structure

Now comes the critical aspect. You have to understand how to organize your cost structure so that you can deliver on your promises.

What do you need to keep delivering your solutions? Some examples are development, marketing, and payroll costs.

Tesla’s top priorities were car production costs, research and development, and technology.

8 . Key metrics

New ideas are fragile and you will run into some obstacles. Because of this, it’s important to know how you measure success.

Set three to five key metrics to ensure your business is booming.

Tesla’s initial goal was to have people buy its cars. It strived to prove a market fit.

9 . Unfair advantage

Protect your unfair advantage at all costs. For example, Google has the most advanced web search and has protected it for so long that the company’s name became a verb.

The unfair advantage reflects what you have that others cannot easily copy. The more complicated it is to copy, the stronger your unfair advantage is.

Tesla had the unfair advantage of pioneering electric sports cars, putting it ahead of their competitors.

The following image represents Tesla’s Lean Canvas:

Tesla's Lean Canvas

Identify your assumptions

You probably won’t get a Lean Canvas right from the beginning. On the way, you’ll learn and need to adapt.

I recommend going block-by-block and asking what your assumptions are. Let’s continue using Tesla as an example:

  • Sports cars fans are open to having an electric sport car
  • The high-efficiency battery will trigger customers to buy
  • Customers care about saving fuel costs

These represent some of the assumptions of the business model. The key is to test the most critical ones. Categorize assumptions based on evidence and how critical they are. Then focus on testing the most critical ones where you lack supporting evidence:

Testing Assumptions

You can download this template here.

It’s normal to pivot solutions, audiences, and problems. Continuously iterate until you have solid evidence supporting your business model. Remember that Netflix started by renting DVDs per post, then moved to streaming, and now it has advertisements.

Successful business models adapt to present realities.

Business model canvas vs. Lean Canvas

You may stumble upon the business model canvas and find yourself confused whether to use it or move onto a Lean Canvas. These aren’t mutually exclusive, but they have a few core differences.

The business model canvas focuses on the business aspects. It shows you the fundamental parts of keeping your business running. For example, it addresses the key activities, partners, and resources. Such elements relate to running a business and not bringing an idea to life.

A Lean Canvas focuses on an idea and its characteristics. It helps you understand the vital aspects behind the idea — the problem it solves, how you differentiate, how to measure success, and your unfair advantage.

Combining the business model canvas and a Lean Canvas can be powerful, but first you should decide on what you’re trying to achieve, then pick the most appropriate option or join both.

Here’s an example of what a business model canvas would look like for Tesla:

Tesla's Business Model Canvas

Final thoughts

The Lean Canvas isn’t a template to fill and forget about. Instead, it’s a tool to foster collaboration and clarify the essential aspects of your idea. Your first model probably won’t be right; keep iterating until you identify a direction worth pursuing.

These are the key takeaways:

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  • Lean Canvas isn’t a template, but a strategic method to move ideas from draft to life
  • Business model canvas is better suited for products that are already running
  • Lean Canvas is better before going to market or in the early stage of the market
  • Business model canvas and Lean Canvas are powerful when combined
  • Collaboration is critical to succeeding with either Lean Canvas or business model canvas

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The Lean Canvas guide: what it is – and how to use it

  • Productivity
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Egor Okrepilov

Writing out a business plan? Any business owner should give the perspective of their project. Business plans are references to what you’re doing, why, and how.

However – business plans come with a problem. That is, they’re inefficient.

They take way too long to write. After all, a business plan is a multi-page document listing the foundations of a project.

They’re also not adaptable. A business plan is “theoretically” a reference point, but few people use it that way.

So it ends up being a guide thrown to investors who want to understand a project – nothing more.

But, you can get more out of a business plan. All you have to do is reshape it, and make it simpler. And this is where the lean canvas comes in!

What is a Lean Canvas?

It’s a 1-page business plan, that is segmented into blocks, each representing a key category of your project.

Lean canvas often includes 8 to 9 blocks , each representing the same number of categories.

From there, you fill each block with essential information only. This lets you plan projects without complexity.

How blocks are laid out

Blocks are divided into two segments . The first plans out the product , and the second looks at the money .

Product segments include the following blocks:

the lean canvas business model with basic instructions

  • Key Metrics
  • Unique Value Proposition
  • Unfair Advantage

Customer segments include the following blocks:

the lean canvas business model with basic instructions

  • Cost structure
  • Revenue stream

We’ll elaborate on the previous one below. We’ll discuss the pros of using a lean canvas, and each category/block in detail!

The 6 benefits of using a Lean Canvas

It’s a one-page model that you can fill out instantly. You don’t have to overthink many details, since the model naturally prevents that.

Compare that to average business plans. You may need weeks (if not months) just to finish a final draft.

(2) Trial and Error

You can afford to draft out and optimize without rewriting your entire business plan.

Speaking of optimization, you can better utilize feedback. Considering how compact a lean canvas is you can share and get expert opinions quickly.

(3) Risk Testing

You get to test your riskiest ideas without much commitment.

See all the info related to the project on a single page. This helps you better decide whether an idea’s worth it or not.

(4) Problem Assessment

Your canvas might be picturing a business problem that you think is grave or severe.

After completing the canvas, you may discover that the issue is easily solvable, requiring fewer resources than previously thought.

This helps you better see alternatives. You can better see alternative markets, better metrics, and different dimensions to a problem.

(5) Customer-Focused

Lean canvas blocks are designed to apply the customer’s perspective when planning.

But that doesn’t mean you’re surveying customers. A lean canvas sheet is designed to make you think of customer needs when approaching each category.

This helps you formulate an educated business plan that’s based on what the market wants or may want.

(6) Key Metrics

So what are “key metrics” in lean canvas design?

That’s a category you’ll have to fill out, and it tackles a core problem. That would be knowing how to measure a project’s success.

You can list the key metrics you’ll use. This ensures you don’t divert into unnecessary metrics when gauging project performance.

(7) Startup-Friendly

Lean canvas are friendly for beginners with little experience drafting a business plan.

They can be used for any type of project. It can be commercial or service-based, online or offline, and the model will apply.

How to create a Lean Canvas?

Just use a premade template.

You don’t want to create a layout from scratch. This adds more complexity to the process, thus robbing its benefits.

Templates are everywhere, but some of the best can be found on Weje . Here are two to try:

  • Basic layout ( use this if you’re a beginner ). It’ll familiarize you with how lean canvas look
  • Sample ( use this for reference )

the lean canvas business model with basic instructions

Weje offers online layouts. You can complete a canvas on app before printing it out. It’s also viable for business meetings. Just open the app, connect your screen to a projector, and fill out the blocks!

But now that you’ve got a template, it’s time to break the lean canvas down to the detail.

We’ll look at each block/category below. This’ll give you an idea on how to fill them out, and the details required!

First – Product Segment

The product segment contains 7 blocks , which are:

First Block – Problems 

Here, you mention the purpose of the lean canvas. You describe the problem(s) you’d like to solve.

We recommend writing down one major problem . Under it, in bullet points, break the problem down into three minor ones.

For example…

(Major Problem): Not enough visitors to an online store

  • Problem One: Online store SEO isn’t optimized
  • Problem Two: Online checkout system is inefficient
  • Problem Three: Direct Ads aren’t generating desired results

List three minor problems at most. Adding any more will make your lean canvas more complex.

Second Block – Solutions

Here, outline ideas on how you’ll solve each problem in the first block.

We recommend listing one idea per problem. So going back to the previous example…

  • Problem One: Hire an SEO specialist for store
  • Problem Two: Finde a web developer to optimize checkout system
  • Problem Three: Redesign online ad strategy with SEO specialist help

Third Block – Key Metrics

In a lean canvas, this is placed directly under the second block. You’ll fill this in conjunction with it too. 

Why? Because you’ll need a way to track the effectiveness of each solution.

Again referencing the previous example:

  • Problem One: Experience level – price per hour
  • Problem Two: Loading speed – Bug removal/fixes
  • Problem Three: Conversion rates

Fourth Block – Unique Value Proposition

This block introduces competition. It compares your product to a competitor’s.

Write your UVP as a sales pitch. It’s preferable if you don’t reference competition directly. Just outline the key strength your final product should have.

Referencing the previous example, your UVP can be something like

“Simple and Smooth Shopping Experience – Find the Product You Want Fast, Buy it Faster.”

Think of your UVP as what your product should look like after the previous three blocks are filled in.

Fifth Block – Unfair Advantage

Unfair advantages are the unique pros you have that competition lacks.

An unfair advantage cannot be bought or developed easily. It’s also hard to copy without losing brand authenticity.

Examples of unfair advantages include:

  • Community . How the market views your identity, members who value you, etc.
  • Network . Mutually beneficial connections that you can leverage for desired results
  • Unique Factor . Things about your business that can’t be copied – like authority, trendiness, etc.

Sixth Block – Channels

This is placed right under the fifth block, since it somewhat ties into it.

Your unfair advantages can be leveraged as selling points. They give you access to markets that other competitors may struggle to reach.

Channels aren’t just selling points though. They can be places to promote your brand.

For example, you might be connected to an online influencer. You can use that as a channel to promote your brand more.

Or maybe you already have a large following on a social media platform. That’s also a channel to promote your products.

Seventh Block – Customer Segments

Here, you define your target customer in detail.

You should have a few profiles ready on who’s most likely to buy. List those, as it’ll be key in how you execute your business plan.

Second – Money Segment

Two more blocks are left. However, the next two incorporate a lot more details than the previous.

Product blocks are often concise. But, money blocks breakdown the “business plan’s financing” to the detail.

So to start off…

Eighth Block – Cost Structure

That’ll be how you finance the project. You’ll need to list details such as:

  • Customer acquisition cost . How much you pay per buying customer. Try to compare that to a ratio, where you represent that cost in relation to how much average customers spend.
  • Distribution cost . How much you pay in shipping, storage, and anything “supply chain” related.
  • Hosting . That’ll be your online presence, domain costs , and server costs – often paid monthly or yearly.
  • Salaries . How much you pay employees ( part or full time ). You can also add in employee benefits as part of salary calculations. If you don’t have employees, you can set a budget on freelance or consultant hiring.
  • Workspace . That’ll include the brick and mortar, usually office costs, and the bills you’ll pay to sustain the space.

Ninth Block – Revenue Stream

This outlines the details of your income. It’s a viability check on the project. Details here include:

  • Revenue Model . What’s the income type of the project? Is it subscriptions? Is it affiliate and ad-based income? Or does the income come from sales?
  • Life Time Value . Do you have a projection on how much value a customer can offer in a lifetime?
  • Revenue . Here, you discuss your revenue model in detail. For example, if your income is from sales, what kind of sales are they? Is it direct, or is it web-based? Is it a dropshipping model when you find dropshipping suppliers , or do you operate as a retailer?
  • Margin . What’s your profit margin on the product your project offers?

Now you know what a lean canvas meaning is. It’s a model you’ll apply for all kinds of business projects.

Whether you’re selling a product or optimizing one, a lean canvas makes it simple, time efficient, and cost-effective!

Egor Okrepilov

Avoid people who didn't make mistakes, as they just got lucky with the circumstances. Appreciate those who have made hundreds of them and learned how to find solutions to any situation.

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Is your company getting ready to start a new project? Have you decided to start your own business? Are you developing a new product?

Whatever you’re thinking of doing, you are going to need some kind of business plan. And the type of plan you need will depend on what your goal is, what type of activity you are planning, and what level of detail you’ll need to present to stakeholders.

A traditional business plan, a lengthy document that includes detailed information such as a market analysis, marketing plan, etc., may be more than you need at this time. Writing a traditional business plan can take several weeks or months to complete. Fortunately, there are alternatives to business planning that don’t involve writing a book.

In 2008, Alex Osterwalder, a Swiss business theorist, developed the Business Model Canvas as a way for businesses to quickly visualize and map out a business model using a one-page document. A few years later, an entrepreneur named Ash Maurya adapted the Business Model Canvas to focus on addressing customer problems and solutions.

In this article, we will discuss the Lean Canvas model and how to use it. But first, we’ll explain what the original Business Model Canvas to help you understand the differences.

What is the Business Model Canvas?

business model canvas template

This document is designed to be a visual representation of what you need to make or keep a business successful. It lets you quickly summarize how your business should work based on the information you have. The Business Model Canvas is intended to be a living document that you can easily update on the fly as you test theories and assumptions.

The Business Model Canvas contains the following categories to help you answer important questions about your business:

  • Value proposition:  What value does your product or service bring to the customer?
  • Key partners:  Who are your suppliers and partners?
  • Key activities: What do you need to do to make this business model work?
  • Key resources: Who or what are the most important assets that you will need to make this model a success?
  • Customer relationships: What will your relationship with customers and potential customers be?
  • Customer segments: Who will buy your product?
  • Channels: How will you reach your chosen customer segments?
  • Cost structure: What costs will you incur to operate your business model?
  • Revenue streams: How will you generate revenue from each customer segment?

When would you use a Business Model Canvas?

The Business Model Canvas is useful for strategic planning and can be used to visually focus on the most important elements of your business.

You also may want to use this model to understand your competition. Make a sketch of your competitor’s business plan and examine their strengths, weaknesses, and limitations. This practice allows you to build a model that addresses the areas where the competition is lacking.

business model canvas example

What is a Lean Canvas?

A Lean Business Model Canvas, or Lean Canvas, is based on the Business Model Canvas. When Maurya adapted the Lean Canvas, he was looking for a better, faster way to develop and build successful products that address and solve customer problems. The Lean Canvas is more focused on entrepreneurs who are starting a new business.

lean canvas template

Like the Business Model Canvas, the Lean Canvas includes nine boxes on a one-page template. At first glance, the Business Model Canvas and the Lean Canvas look exactly alike, but there are key differences, noted below:

This box replaces the key partners section in the Business Model Canvas.

Identify what the problem is. Many businesses fail because they spend too much time, money, and resources on building the wrong product. You need to understand the customer’s problem first. To get started, list your customers’ top three problems and then list alternatives that may already exist that these customers use to solve these problems today.

This box replaces the key activities section in the Business Model Canvas.

After you have identified each problem, outline possible solutions you can use to solve them. These solutions can include new products/services and improvements to existing products.

  • Unique value proposition

Develop a message that is compelling, clear, and concise. This message should be able to turn unaware visitors into interested prospects.

Use this box to list what you propose to offer customers, and the value that this offering will provide. Think about what makes your offering different from others who are trying to solve the same problems.

  • Unfair advantage

This box replaces the customer relationships section in the Business Model Canvas.

This is where you identify your competitive advantage, the differentiator that makes your product or business unique and that is not easily copied.

  • Customer segments

You must understand who your customers are. You can’t know what they need or what their problems are if you don’t know who they are.

Describe your target audience and define what your relationship will be with them. You may have many customer segments, and you need to realize that they are tied together with their problems. You may need to think of problems and customers at the same time.

  • Key metrics

This box replaces the key resources section in the Business Model Canvas.

Metrics are a way to measure performance and to monitor progress toward achieving your business goals. List current numbers that describe how your business is doing today.

In addition, you may want to define the key metrics that you will use as indicators to measure future success. For example, how many units of a product need to be sold in order to earn a profit?

What channels will you use to reach your customers? List the marketing and advertising methods that you will use, such as print, radio, SEO, TV, and so on.

  • Cost structure

You have to spend money to make money. This section is where you list the costs that your business will have in order to develop and market your product, including research, technology, human resources, and so on. Be sure to include one-time and recurring costs.

  • Revenue streams

In this box, you will list where your money is going to come from. How are you going to price your product or service to ensure that you make a profit? You need to consider how much people are willing to pay and what the minimum is that you can charge in order to make a profit.

When would you use a Lean Canvas model?

The Business Model Canvas approaches business planning from a strategic angle. The Lean Canvas shifts to a problem/solution paradigm, which allows you to focus more on addressing customer needs. This is a good tool for startup businesses and entrepreneurs to use. Once you identify your customers and their problems, you can find solutions, describe value propositions, define your revenue streams, and so on.

How do you make a Lean Canvas model?

The best place to start working on a Lean Canvas is Lucidchart, where you can find a template to meet your needs. After you’ve opened a blank canvas, how do you fill it out? What is the correct order to use when filling in the boxes?

Ash Maurya, the person who developed the Lean Canvas, says that people frequently ask him, “Why isn’t the Lean Canvas laid out more logically?” According to Maurya, the main reason for the Lean Canvas layout was legacy. Instead of completely changing the layout of the original Business Model Canvas, Maurya chose to adopt a self-imposed design constraint where he replaced existing boxes with new boxes (for example, Problems replaced Key Partners).

If you have never filled out a Lean Canvas before, you might think that you should fill out the canvas from left to right. However, Maurya has suggested the following order:

Over the years, Maurya has tweaked his suggested fill order in an effort to get a better flow. When asked which fill order is correct, his answer is simple: There isn’t one.

You may want to start with a suggested fill order until you have a better idea of what works best for you and your company. For some plans, it may make more sense to start with identifying your customer segments and then moving on to your customer’s problems. Other times, it may be more appropriate to start with the problem that needs to be addressed.

However you decide is the best way to fill out your Lean Canvas model, be sure you work with Lucidchart. Start out with one of our templates to flesh out your ideas and to collaborate with team members.

Lucidchart, a cloud-based intelligent diagramming application, is a core component of Lucid Software's Visual Collaboration Suite. This intuitive, cloud-based solution empowers teams to collaborate in real-time to build flowcharts, mockups, UML diagrams, customer journey maps, and more. Lucidchart propels teams forward to build the future faster. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit lucidchart.com.

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How to Fill In Lean Canvas Template: the Guide to Shaping Your Startup Idea into Product

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Your startup idea could get into Fortune 500 or out-hype any product in a selected niche, if you put your product development on the right track. In this post, you’ll find a brief explanation on how to create a visual one-page business model in no time using Lean Canvas model. Get the hints and fill in Fulcrum’s interactive online template.

When you’re a startup, you know for a fact that your idea will turn into a great product only if it is well executed. Prior to starting a project, Fulcrum team always shares the Lean Canvas template with each of our clients. This simple but effective practice allows business owners to shape a business model for their new product execution. Then, it’s also a great starting point for successful product development.

What is Lean Canvas?

Initially, the Lean Canvas template is an adapted version of the brilliant Business Canvas model invented by entrepreneur, consultant, and expert in business modeling Alex Osterwalder. It consists of 9 blocks essential for building a business:

  • Key partners
  • Key activities
  • Key resources
  • Value propositions
  • Customer relationships
  • Customer segments
  • Cost Structure
  • Revenue streams

This strategic management model is being used by all kinds of organizations worldwide to form a successful business blueprint. Still, to comply with the specific startup needs, it had to be slightly modified.

So, Ash Maurya created an adaptation of the Business Canvas model. Using lean methodology (built around the idea of waste elimination and resources optimization to create high-value products or services), he redesigned Osterwalder’s model into a startup-oriented Lean Canvas template.

Why Lean Canvas is Essential for Any Startup?

The number one reason why startups fail is creating a product that nobody needs. It’s called a market-fit failure. To avoid that, we advice using the Lean Canvas model to assure your product has a clear roadmap and a business plan to follow. It’s an excellent business solution that includes all fundamental key points to define before developing and launching a product.

the lean canvas business model with basic instructions

  • Structured business model of your business and understanding of the current state of affairs.
  • Identifying what is a demand for your product in a specific market niche and what problems it solves for customers.
  • Your target audience defined & channels to reach your TA elaborated.

Lean Canvas Template [available online + Lean Canvas PDF]

At Fulcrum, we’ve created our own Lean Canvas tool . It’s an online instrument, free to use, where you can collaborate with your co-workers by simply sharing a link. You can also export your Business Model in a Lean Canvas PDF and receive it directly to your inbox.

the lean canvas business model with basic instructions

The Ultimate Guide to Fill in Lean Canvas in 20 Minutes

1. start with the ‘customer segments’.

Your target audience pre-defines your business model. Therefore, it makes sense to start comleting your product’s Lean Canvas model with the customer segments. Keep in mind, there’s a common stumbling block — people tend to define their audience too broadly. The golden rule states:

When you’re trying to build a product for everyone, you’ll end up selling it to noone.

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If you have many different audience segments, create a separate Lean Canvas for each of them.

Let’s take  Uber  as an example. What is Uber’s target audience?

  • Taxi drivers (as potential partners).
  • City dwellers without a car.

Now, try to narrow it down even more and identify your early adopters. Who is most likely to start using your app? These people have ‘above average’ needs for your product.

If we talk about Uber, we can add the geography factor here. Early adopters might be the San Francisco IT folk (San Francisco is where Uber started out). Their phone is their life. They never have cash and use credit cards, typically. They could be the most interested in ordering a taxi through the app and paying by card instead of cash.

2. Define the Problem Your Product Solves

If there’s no problem — there’s no product to solve it, simple as that. Each customer segment has distinct pains and problems. So, create a list of 1–3 pain points for each segment and be as specific as possible.

LeanStack recommends using the ‘5 -Whys technique’ invented in Toyota, which helps you to find the root of the problem. Start with a general pain point and then continue asking  WHY  5 times in a row.

For instance, let’s take our client  Scoob-e, an e-bike renting app in Vienna. We might start with some general statement: it’s hard to move around in Vienna. But if we continue using the ‘Why?’ technique we might get to the following problems:

  • There are traffic jams if you use a car. People don’t want to stay in traffic jams.
  • It’s not easy to park your car in the city center. Finding a parking spot is a nuisance.
  • Public transport picks you up at certain spots, at certain times. Who wants to wait?
  • Most cars aren’t eco-friendly.

In the end, you’ll get the core problems that your prospects face.

In the same section, you will see the ‘Existing Alternatives’ subcategory. Try to describe how your target audience is solving these problems at the moment. What are the alternative solutions?

Remember, you don’t describe your competitors here. This box needs to be filled with alternative ways to solve the problem. For instance, instead of using cars, people in Vienna can walk on foot or use a simple bicycle.

3. Decide on Revenue Streams

The next thing on the list is to fill in Lean Canvas with revenue streams. Why is this important? If you don’t see how you can monetize your solution then it’s not a viable business idea. So think it through before you jump into creating your MVP.

If it’s hard to determine your business model at first, start with defining the customer in your business model. Customers and target audiences aren’t always the same. For instance, in the Uber business model, taxi drivers are not the customers, yet they are also a target audience.

Next step — think through your pricing model. The pricing model is a very complicated topic itself. Do you plan on using a monthly subscription, one-time fee, or something else? Definitely document this in your Lean Canvas model.

4. Provide Solution

Take a close look at your ‘Problems’ column on the left. What is the most obvious, first-comes-to-your-head solution to the problem outlined? If you’re having doubts,  sharing your Lean Canvas PDF with teammates might be a reasonable solution. What’s more, you can do a double duty, interview your stakeholders and find out their take.

5. Write down Unique Value Proposition

Lean Canvas Template has a Unique Value proposition section (also known as USP, Unique Selling Proposition). It gives you a clear understanding of who your product is for and why users should choose your company instead of your competitors.

The word ‘unique’ is here for a reason. Your value proposition needs to stand out. There are so many companies on the market, you either get noticed or go home. UVP has three components, which you can define by answering these questions:

  • Who is this product for?
  • What is the clear benefit?
  • Why should they choose you instead of the others?

Here is an example of Uber’s UVP:

the lean canvas business model with basic instructions

You can also use Instant Clarity Headline. It includes the end result that your customer wants, addresses the objections they have, and reveals a specific time frame.

the lean canvas business model with basic instructions

In the same field, you can add a ‘high-level concept’. It’s a quick catchphrase that describes your business best. It’s perfect to get the idea across & make sure potential investors understand your startup idea. For example, when YouTube just started out, its high-level concept was ‘Flickr for videos’.

6. Find Effective Channels

Just think about your perfect customers. Where does they consume the content so that you can offer your product at the right place and time?

While filling in your Lean Canvas model, consider all offline & online channels to reach your audience: word of mouth, offline events, social media platforms, emails, Facebook & Google ads, etc. Try to divide your channels into ‘Before purchase’, ‘During Purchase’ and ‘After Purchase’:

  • Before Purchase: word of mouth, social media, CPC, PR articles, promo emails, etc.
  • During Purchase: your website, catalogs, communication with sales managers, etc.
  • After Purchase: email updates, customer feedback survey, social media, etc.

7. List Key Metrics

Key metrics in the Lean Canvas model is your business bottom line. These are numbers such as downloads, MQLs, SQLs, sales, and other indicators your business requires to prosper. These should be tracked on a regular basis.

But don’t stop there, always go the extra mile! Estimate your Minimum Success Criteria. It’s a breakpoint or the result your company should achieve to become successful. Think in terms of revenue: what revenue should your company have to be profitable?

8. Estimate Cost Structure

What does it take to create an ideal product? How many resources and investments are needed before it’s alive and kicking? Make sure to outline both fixed & variable costs in your Lean Canvas model.

Fixed costs  are the rent, taxes, interest expenses. They are less likely to fluctuate over time in comparison to variable costs.

Variable costs  are direct material costs, labor costs, marketing expenses.

Most likely, your cost structure will change over time. The good thing is — you can always come back to your lean canvas & update it.

9. Create Unfair Advantage

the lean canvas business model with basic instructions

Your unfair advantage in Lean Canvas model for product could be something like fantastic experts on your team (which is not always the case for many companies) or cutting-edge technologies that you have.

Keep in mind that Ash Maurya warns not to list ‘first to the market’ as your Lean Canvas unfair advantage. Most profitable companies nowadays weren’t the first to the market. They were second, third, or tenth. Say Apple or Facebook. They improved and perfected technologies that were already present.

Bottom Line: Get Structured

The startup world is fast and furious…

So as the Lean Canvas model: strategic, fast, and straight to the point. Yet, to succeed in this fast-changing startup world, you always need to stay updated, structured and envision your next steps.

That is what Lean Canvas helps you with. You can see what weak and strong sides of your business idea are. Most amazing – it would take you less than 30 mins to fill it in.

To get competitive, you, first of all, need to find our what your competition is and, secondly, identify your secret weapons.

the lean canvas business model with basic instructions

FAQ: Lean Canvas Template

  • What is a Lean Canvas? The Lean Canvas is a single-page business plan template designed for startups. It is an alternative solution to a regular lengthy business plan created by Ash Maurya.
  • What are key metrics in Lean Canvas? The key metrics in Lean Canvas depend on your business goals and KPIs. These can be downloads, conversion rates, MQLs, SQLs, sales, in-app purchases, etc.
  • What is a Lean Canvas business model? Lean Canvas business model is a visual and short business plan with 9 essential blocks that describe your business model on a single page.
  • What is a high-level concept in a Lean Canvas? The high-level concept in Lean Canvas is a one-sentence pitch characterizing your product with reference to others recognized on the market.

the lean canvas business model with basic instructions

Million Dollar Journey

Lean Canvas (2024): How-to & Examples [+ Template]

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the lean canvas business model with basic instructions

Gust de Backer

November 7, 2023.

Lean Canvas

The Lean Canvas is practical and focused on validating an idea, it ensures that you are not going to bring a service or product to market that no one is waiting for.

Do you want to bring your product or service to market more effectively?

I’m going to explain to you:

  • What the Lean Canvas is
  • Which components the Lean Canvas contains
  • And how to fill out the Lean Canvas

Let’s get started…

Table of Contents

What is a Lean Canvas

The Lean Canvas originally comes from the Business Model Canvas , but is more problem and solution oriented :

Lean Canvas

This difference allows the Lean Canvas to be better used to validate a product or service.

The differences are:

Don’t feel like reading this blog? Check out this video:

Why use the Lean Canvas?

There are several reasons why you might want to use the Lean Canvas:

  • It focuses on understanding the problem you are trying to solve, this allows you to better understand the customer.
  • It includes a research-based approach , as it focuses on validating your assumptions.
  • Contains key metrics to check that you are sailing the right course.
  • You stay lean , because you focus on speed and traction of your idea.
  • Faster time-to-market because the idea-to-product transition is smoother.
  • The Lean Canvas also focuses on capturing a unique place in the market .

1. Customer Segments.

Not everyone needs your product, it is important to be as specific as possible in choosing your customer segment.

Without a clear customer segment it is also not possible to properly empathize with the customer segment’s problems.

Tip : check out the TAM SAM SOM article.

Early Adopters

The ‘Customer Segments’ section also contains a piece with the Early Adopters, or your most potential customers…

These are the people you are going to approach first to validate your assumptions.

Without a problem worth solving, you have no product or service. For each key customer segment, come up with one to three high priority problems.

Existing Alternatives

The ‘Problem’ section also contains a section with existing alternatives, this is meant to write down your competitors that solve the same problem.

Note, this does not necessarily mean your direct competitors, but really companies that focus on the same problem.

3. Unique Value Proposition

The Unique Value Proposition is your promise of the value you will deliver…

It is the main reason why a customer should buy from you. It also shows where you stand out and why a customer segment should invest time or money in you.

Tip : check out the Value Proposition Canvas .

High-Level Concept

In the High-Level Concept section, there is space to write down briefly and clearly what your product or service represents. This is how your team or customers name your company to their friends, for example as “The Uber for boats”.

4. Solution

You will not find the solution to your problem in your first attempt. The solution is also not in your office, you will find it with the customer. Get Out Of The Building , or in other words, engage with the customer and validate different solutions.

While creating the solution, don’t forget to use the Build – Measure – Learn cycle.

5. Channels

How will you reach your customer segment? In the beginning, it’s not important to look at scalability, but at gathering insights.

Think about what channels you can use to access your customer segment, see where your customers are and try to reach them there.

It is not necessary to be on location with the customer, a solution can also be validated with an MVP, for example. A good example of this is Zappos, a simple website with some shoes that people could order online.

Tip : check out Testing Business Ideas .

6. Revenue Streams

Revenue Streams depend on the revenue model and pricing strategy you choose.

For startups it is normal to lower the price or even offer certain things for free to get traction. Important here is to ensure that you can validate demand for your product or service, it is not very difficult to get people to sign up or do something if it is free.

7. Cost Structure

Write down how much it costs to keep your business running, what is your burn rate, how much does it cost monthly to run your business, how much does it cost to interview customer segments, how much does market research cost, etc.

Try to calculate a break-even point in doing so.

8. Key Metrics

Every business has certain metrics that provide insight into how it is performing. A good way to map the health of your business is the Pirate Funnel Canvas .

It is not always about the part that goes towards the customer, because if you depend on staff, for example NPS can also be a very important metric for your business.

Tip : also check out the Growth Flywheel / Growth Formula .

9. Unfair Advantage

The Unfair Advantage is about a specific part of your company, product or service that your competitors can’t just get or copy.

This could be exclusive access to data, a community, authority, experience or perhaps a particular feature.

How do you complete the Lean Canvas?

First, download the Lean Canvas:

Template Lean Canvas

Good choice! Check your e-mail for the resources...

Make sure you have a team with whom you can start completing and validating the Lean Canvas. Optionally, you can do this alone, but it is interesting to be able to discuss findings with someone.

Starting with the problem, make sure you find the problem and validate that the customer segment: – Is bothered by the problem – Is actively looking for a solution or has even already realized a self-created solution – Would possibly be willing to pay money to solve the problem

Create different solutions in perhaps different iterations and test them with the customer segment to validate whether the solution actually solves the problem found.

Start by filling in the canvas with assumptions and as you go, make sure to refill the canvas with validated assumptions.

Once you have a validated Lean Canvas, you can start to professionalize your business and optimize the canvas to, for example, create a scalable sales funnel, be more profitable, or approach a larger customer segment.

Lean Canvas example

Watch the video at the top of this article for a clear example. Here is a visual example from Uber:

Lean Canvas Template Example

Now it’s your turn…

I’m curious… How far along are you with your business or startup and what are you still running into?

Let me know in a comment!

P.S. would you like some extra help? Let me know at [email protected]

Frequently Asked Questions

The Lean Canvas allows you to put your entire concept on 1 a4 sheet to validate your assumptions. It is similar to the Business Model Canvas, but is more problem and solution oriented.

The Lean Canvas gets you to focus more on your customer segment’s problem and to use a research-based method to validate your product or service, allowing you to get a faster time to market.

The Lean Canvas is ideally used to validate a new product, idea or service and research it with a problem-solving mindset.

The components in the Lean Canvas are: 1. Customer Segments 2. Problem 3. Unique Value Proposition 4. Solution 5. Revenue Streams 6. Key Metrics 7. Channels 8. Cost Structure 9. Unfair Advantage

The Business Model Canvas is a strategic tool to identify the strengths and weaknesses of a company and is primarily aimed at existing companies that are focused on expanding their business. The Lean Canvas is a problem-solution approach to approaching a market focuses primarily on startups that focus on serving a customer segment and gaining an unfair advantage.

the lean canvas business model with basic instructions

I try to help business surpass their growth ceiling with my content.

Sounds interesting?

Let’s connect on LinkedIn!

Business Model Canvas | Business Strategy | Lean Canvas | Marketing and Sales | Pricing Strategy | Problem-solution Fit | Product-market Fit | Revenue Models | TAM SAM SOM Model | Treacy and Wiersema | Value Proposition Canvas

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Gust’s Must-Reads 👇🏼

  • TAM SAM SOM
  • Value Proposition
  • Brainstorming
  • Decision Making Unit
  • Product-Market Fit
  • North Star Metric
  • Market Research
  • Customer Development
  • Growth Hacking
  • Brand Identity
  • Customer Journey
  • Account-Based Marketing

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Hi Obumu, could you maybe further elaborate on that?

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the lean canvas business model with basic instructions

Insights - How to Create your Business Model with the Lean Canvas.

How to create your business model with the lean canvas..

A business model describes how a company creates, delivers, captures and defends value. While this definition may sound complex, defining and developing a business model does not have to be a daunting task. In this step-by-step guide, we will share with you a proven process to follow, as well as questions and checklists to help you avoid common pitfalls. We will be using the Lean Canvas as our tool, which you can download from our Template Library . Let's get started!

Lean Canvas by LeanStack/Ash Maurya. Template by Neos Chronos.

CHOOSE AN IDEA

Everything starts with your business idea. Your idea may be around a problem that people encounter in daily life and you believe you can solve it. Sometimes, your idea will be about a solution to a problem that is obvious to you, but everyone seems to miss it. In rare cases, your idea will be so unique that it may disrupt an industry . There is no need to write it down separately, it will be depicted on the Lean Canvas. It is helpful to give your business a provisory name and fill this in the appropriate fields at the top of the Lean Canvas.

Customer Segments Icon

DEFINE CUSTOMERS AND USERS

As a next step, you should define who are the people that will pay to benefit from your idea, and who are the people that will use products and services related to your idea. These are referred to as Customer Segments. Sometimes customers and users are the same people, e.g. the buyer of a loaf of bread in a bakery. Sometimes customers and users differ. On social media networks, for example, the users are the members, however, the customers are the advertisers that want to reach those members. Write down a short description of customers and users. Think about where they live, how much money they earn, how their daily life looks like and their dreams and aspirations. Start with a short description, and come back every time you learn something more about them. You can use a Customer Personas Canvas for this purpose.

Problem Icon

IDENTIFY THE PROBLEM YOU SOLVE

With customers and users clearly defined, the next step is to describe the problem(s) you solve for them. You can do this at the Problem block in the canvas. Use three (3) sentences / bullet points for customers and three (3) for users. This will help you focus on the most important problems.

Existing Alternatives Icon

VALIDATE EXISTING ALTERNATIVES

A problem that is worthwhile solving is one that exists despite existing alternatives customers and users may use today. It is, therefore, good practice to investigate existing alternatives and to reframe the problem(s) you identified to those. Doing so will force you to distill the value such alternatives fail to create and deliver, and this will indicate the business potential of your company's future products and services. At this point, you will have an initial problem validation, which you can deepen with extra activities like customer interviews, surveys, etc. So go ahead, write a list of product and services users and customers use today to solve the problem(s) you identified.

Revenues Streams Icon

DESCRIBE POTENTIAL REVENUE STREAMS

You may have found an important problem to solve. To be sure it is appropriate to invest time and effort to solve it, you need to ask and answer the following question: are customers willing to pay for a potential solution to this problem? Fundamentally, customer willingness to pay for a solution is the ultimate validation of a problem's significance i.e. whether it is a must-solve (very valuable) or nice-to-solve (less valuable). Use the data you have from researching existing alternatives. How much do others charge? How often customers pay? How? It is a well-known fact that the existence of competition is often validation that a market and revenue potential exists. And if customers perceive the problem you identified as a must-solve they will be willing to preorder your future solution. Capture how much, how often and in which ways customers would be willing to pay and note it down in the revenue streams block of the canvas.

Early Adopters Icon

FOCUS ON EARLY ADOPTERS

Early adopters are the customers that experience the problem you identified and validated the most. They are grateful and eager to get a solution to the problem as soon as possible. Often, they will be those who are easier to reach e.g. live in the vicinity. In the early stages of any business, focusing on early adopters is invaluable to help get feedback and traction, to further validate the significance of the problem you solve and the business potential. So, go fill in the early adopters' block and list the specific customers and users that will be your first target. If you know the names of people or companies who will be your early adopters, that is optimal.

Solution Icon

DESCRIBE YOUR DIFFERENTIATED SOLUTION

We refrained from defining a solution earlier because it is important to create a context where you can - as objectively as possible - judge if you have found a problem worth solving. With a validated problem set, you can now move - for the first time - into describing your solution. Write one solution per each problem you identified for customers and users in the solution block on the canvas. If you defined problems using the existing alternatives as a reference, your solution will be automatically differentiated, as it will describe how you solve problems that persist despite existing alternatives. If you see the need to describe the differentiation, loop back to the problem block and rework the canvas until this point.

Unique Value Proposition Icon

ARTICULATE YOUR UNIQUE VALUE PROPOSITION

A unique value proposition (UVP) is a statement that says to a customer and user why you are different and worth paying attention to. The key here is to focus on the benefits you deliver to customers and users first. It is a good practice to create a list of UVPs and then keep working on refining them for the target segment. To get started you may want to use the following template.

At company name we enable customer segments to achieve list of benefits by offering a solution that solves their list of problems in a differentiated way compared to existing alternatives .

When talking to customers, you may want to stop at benefits. When talking to investors, you may have to use the full version.

Channels Icon

CHOOSE YOUR CHANNELS TO MARKET

Equipped with your differentiated solution and value proposition, it is now time to decide how you are going to sell your solution to customers. You should already have initial ideas from your knowledge of how existing alternatives are brought to the market. Or you may want to completely rethink the channels to the market. Typically you want to capture in this block the channel type. Is it direct (customers buy directly from your business) or indirect (you use resellers, distributors)? Is it offline / personal, online / digital or both? Note down the associated keywords e.g. B2B, B2C, inbound, outbound marketing / sales, Resellers, Online Web, Physical store, ... As soon as you defined the preferred channel to market, you can work further on identifying the resources, partners, and activities you need to put in place to implement the channel. You can use a Channel Implementation Canvas for this purpose.

Key Metrics Icon

PICK KEY METRICS

This canvas block is dedicated to measuring the success of creating your solution and delivering the benefits of your unique value proposition to customers and users. Therefore your success metrics need to be listed in three (3) categories: customer, channel, solution. Together, these impact the overall company performance. Ideally, by listing the key metrics in this manner, you will be able to find one or two metrics that you can use as a meaningful health check of the overall status of the company. Typical values for the customer part is Life Time Value (LTV), and Customer Satisfaction (CSAT). Customer Acquisition Cost (CAC), and Sales Conversion Rates are common for the channel part. Finally, Server Availability and Average Number of Faults per Release are common for the solution part. With no doubt, all of them will impact Monthy Recurring Revenue (MRR) or Annual Recurring Revenue (ARR) for Software-as-a-Service businesses, as well as Profitability and Revenue Growth Rates.

Cost Structure Icon

UNDERSTAND THE COST STRUCTURE

The cost structure primarily reflects fixed and variable costs for running the company (General & Administration), developing the solution (Research & Development) and operating the channels to market (Sales & Marketing). It is good practice to create a financial plan to get a feel of the amount of money required monthly to perform all these tasks (Burn Rate) in case you would like to ask for investment to be able to operate for a defined period without depending on revenue (Runway). It is even better to determine the unit economics of your value proposition. That is understanding the revenue as well as the cost associated with the most basic sales object e.g. one item of a physical product, a monthly subscription fee, ..., etc. With these you can easily determine: profit per unit, the number of units to be sold to reach positive cash flow (the state where you do not eat up your company's cash reserves), the number of units to reach break-even, etc. Give yourself some time to do this, and capture your unit economics in this block as well as the block for Revenue Streams.

Unfair Advantage Icon

DETERMINE YOUR UNFAIR ADVANTAGE

As soon as you launch, everyone will know what your business model looks like. Even before you launch people might learn about your plans, and, if your business model is promising, copy them. This canvas block reflects the part of the business model which is about defending the value you create, deliver and aim to capture. It contains those characteristics that are hard to copy, and cannot be easily bought. Exclusive agreements, acclaimed expertise, business model asymmetry , ... are good examples of such unfair advantage. Ask yourself what would prevent someone from copying your business model, even if they had access to a full copy of it, and write your answers in this block.

High-Level Concept Icon

CREATE A HIGH-LEVEL CONCEPT

You have arrived at the last block of the Lean Canvas! The High-Level Concept block is about creating one sentence that summarises the essence of your business model. The primary recommendation is to use an analogy: if you were Youtube, you could say ”We are Flickr for Videos“. If you were AirBnB you could say ”We are Uber for Hotels“. Similarly, LinkedIn could be ”Facebook for Business People“. Write down your analogy and use it when someone asks you about the type of business you are trying to build. Follow up with your unique value proposition and your unfair advantage when they ask for more!

In this step-by-step guide, we shared with you a proven process to follow to create your business model with the Lean Canvas . Adopting our recommendations will help you avoid common pitfalls and progress faster on your entrepreneurial journey.

CREDITS & REFERENCES

For the avoidance of doubt, Neos Chronos is not affiliated with and has no financial interest in any of the companies mentioned in this article. All names and trademarks mentioned herein are the property of their respective owners. Please observe the Neos Chronos Terms of Use .

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Lean Canvas: How To Create a Business Plan that People Will Actually Read

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Everybody has a plan until they get punched in the mouth… – Mike Tyson

Which, let’s face it, happens to most start-ups and entrepreneurs. Around 75% in fact.

You have the best idea. You spend days, weeks, and months perfecting a 40-page business plan filled with five-year forecasts, 18-month roadmaps, and in-depth marketing strategies. You confidently pitch it to stakeholders and investors.

Then you get punched in the mouth.

Potential investors go quiet or “ haven’t had time to read it ” and you’re left with an expensive, wasted deliverable and a chunk of time that you’ll never get back. Worse still, your product isn’t any nearer launching and you haven’t secured any buy-in or investment.

What. A. Waste. Of. Time.

Traditional business plans are of little use to start-ups, and of no real interest to investors.

But what’s the alternative?

A one-page business plan inspired by Eric Ries ’s Lean Start-Up methodology and specifically designed for emerging entrepreneurs: The Lean Canvas.

The Lean Canvas is a living framework that allows you to quickly capture your idea or concept, thoroughly validate it, and then continuously share, improve, and most importantly move on it.

Ok, I know what you’re thinking:

How can a one-page Lean Canvas possibly replace a 40-page business plan?

How can i tell the entire story of my business on one-page, is a lean canvas really enough to help me secure investment or buy-in.

I have the answers to all these questions and more in this Process Street post.

Ready to dodge some punches?

Creating a detailed business plan (complete with comprehensive forecasts, roadmaps, and strategies) and pitching it to investors has always been the first step new businesses and entrepreneurs take to secure buy-in or investment, right?

Why business plans don’t work for start-ups

Lean Canvas

During the early stages of an idea or a business, all you really have is a strong belief, a clear vision, and a lot of untested assumptions: You believe there’s a market for it. You think your pricing will generate $X in revenue, and you hope your product roadmap will look a certain way.

But you don’t really know. How can you? You haven’t tested the concept.

Of course, your business model might be based on similar businesses, products, or concepts, which allow you to hypothesize the future. But you can’t provide any concrete proof or evidence that your idea is going to work.

Which is surely the sole purpose of a business plan?

Plus, a business plan typically takes ages to write as it requires lots of detailed, accurate information. And, it becomes obsolete incredibly quickly, as and when you encounter the various operational and marketing challenges that inevitably arise.

So, instead of being a clear, factually accurate, representative proposition, a start-up’s business plan tends to be a wishy-washy, out-of-date, speculative document.

And, what do investors, Angels, and stakeholders hate more than anything…? Exactly.

The alternative to speculative, inaccurate, & obsolete business plans

Start-ups face a vicious circle: You can’t prove your concept without investment, but you can’t get investment without proof.

The original concept of a business plan was to break this circle and give investors the information they needed to justify a decision on whether to fund the idea or not.

But as we’ve already established, not only is a start-up’s business plan incredibly time-consuming to create, it’s difficult to digest and full of guesses rather than reassuring facts. As a result, all that hard work can often get bypassed by investors.

The answer to this dilemma is the Lean Canvas. The Lean Canvas is an actionable, entrepreneur-focused, one-page business plan.

Inspired by Alex Osterwalder ’s Business Model Canvas and the principles behind the Lean Start-Up movement and eradication of waste , Ash Maurya developed the Lean Canvas framework specifically for start-ups.

He felt that spending time creating a business plan that was often inaccurate, obsolete, and ignored was unproductive and a wasteful.

“ Waste is any human activity which absorbs resources but creates no value. ” – James Womack , Leanstack , Bootstrapping + Lean Startup = Low-burn Startup

So, he developed the Lean Canvas; a one-page, easy-to-digest document that:

lean canvas

As you can see, the Lean Canvas is a set of nine blocks:

  • Value proposition
  • Unfair advantage
  • Key metrics

Each block presents clear, concise, and accurate information in a digestible format. It takes less time to complete, it’s easy to keep up-to-date, it gives investors the information they need, and it paints a clear picture of the business or idea on one page (instead of 40).

What’s not to like?

OK, you get it: It’s a waste of time creating a semi-fictional business plan that won’t get read. But, seriously ? How can you convey how fantastic your idea is on one, single page?

To answer this, we’ll need to look at each of the nine components that make up the one-page Lean Canvas framework.

Lean Canvas component #1: Customers 🧑‍🤝‍🧑

The first block to fill out is all about your customers. As you might do with a business plan, you need to determine who your user base is and understand what makes them tick.

lean canvas

Go deep and build up a customer profile for each group of customers you’re targeting. Get under their skin and get to know them as people:

  • Who is your intended audience?
  • What type of person are they?
  • What are their likes, dislikes, and pain points?
  • What’s their average day like?
  • What makes them happy?
  • What frustrates them?

One thing you must do during this exercise is define who the early adopters of your product are likely to be.

Identifying this group of people is essential because you can use them to validate your ideas.

Ask them questions, send them feedback surveys, and get them to trial your product. Collect these valuable insights and use them to iterate your Lean Canvas, determine the direction you take your product in, and justify your ideas.

Real customer opinions and feedback are valuable proof points that investors will trust.

Lean Canvas component #2: Problem 🧠

The next step you need to take should be in the shoes of your customer. Walk a mile in your customer’s shoes so you can identify the problems they might face with (and also without) your product.

Conduct interviews, carry out tests, or send out surveys to help you uncover the real issues they’re likely to face or are already facing.

Interact with your product yourself, or ask an unrelated third party to give it a try. Consider the experience from your customer’s point of view and objectively identify what works and what doesn’t.

Take this back to your Lean Canvas and tweak your idea accordingly. Use it as evidence to prove the concept you’re pitching.

Lean Canvas component #3: Solution ❗

Next, you need to describe what your product is going to do. What will it solve? What’s the ultimate vision?

You might feel that your product solves several problems and is the answer to everything. But, remember, this needs to be clear and concise.

So, play around with each solution to see what sticks. Assess your features and capabilities, carry out research, collect feedback, and brainstorm with your team so you can narrow it down to one or two solid solutions that are grounded in evidence.

Lean Canvas component #4: Channels 📣

How will your customers find your product? How will they come into contact with you or your product?

List every single channel or touchpoint that you could use to get your product in front of your audience.

Lean Canvas

You might want to use a mixture of paid channels, like Facebook ads or trade fairs, and free channels like SEO or blog posts. Create a content strategy to help you decide where best to center your efforts and show investors that you’re able to provide the best experience to your customers at every step of their journey.

Lean Canvas component #5: Value proposition ⚡

Write out a punchy statement that explains the core value of your product.

Think: Why would your target customer care about it? What will it do for them? What problem does it solve? Why is it a better option than the competition?

Sell the end-benefit not the solution, and keep it short, catchy, and powerfully persuasive (eg. the film ‘Alien’ isn’t a film about aliens, it’s “ Jaws in Space ”).

Lean Canvas

Three words of warning though:

  • Don’t confuse a value proposition with a tacky slogan. For instance, M&M’s “Melts in your mouth, not in your hand…” is a slogan, not a value proposition.
  • Don’t write a sentence that’s all hype and no substance. For example, “The best product EVER made” is pure hype. There’s nothing to back it up and investors will see straight through it.
  • Don’t use meaningless buzzwords or jargon. You might think that phrases like “value-added interactions” make you sound like a prestigious expert, but they don’t. They make you sound like a pretentious airhead.

This block is one of the most important ones to get right. Your value proposition is how investors will see you and your product, and how they will describe you to other partners and investors.

Lean Canvas component #6: Unfair advantage 🥇

Whether you know it or not, you have an unfair advantage over your competitors. All you have to do is find out what it is!

What makes you stand out? What puts you streets ahead of your competitors? What do you have that others can’t replicate or acquire?

It might be your internal team; it might be in-depth knowledge or inside information; or it could be your unique position within a community.

It’s there somewhere. Dig it out and put it on display.

Lean Canvas component #7: Revenue 💰

This is where you’ll need to identify the sources of income that will keep you and your business afloat.

Create a simple pricing model and test it out on your early adopters. Does it work for them and for you?

You might charge a subscription fee; you might generate income through advertising on your platform; or maybe you’ll get customers to pay for their usage. Maybe it’s a combination of all three!

Just remember to keep it as simple as possible, test it out, and keep iterating until it’s perfect.

Again, testing it out on early adopters backs up your concept.

Lean Canvas component #8: Costs 💸

I probably don’t need to tell you that over 90% of start-ups fail because they don’t consider the proper costs of launching and running their business.

So, list all of your expenses.

Consider everything, from customer acquisition and retention costs, to distribution and office overheads. And to make sure you don’t miss any key costs, work through each of the nine blocks in your Lean Canvas and consider the costs that each might bring.

Lean Canvas component #9: Key metrics 📈

To be able to prove the success of your product, you’ll need to set clear, easy to measure metrics.

Outline what you plan to track and why.

lean canvas

Identify the indicators that will demonstrate how well your company is doing. For instance, you may choose to measure the number of users, downloads, or social followers you get; or you may focus on retention figures, brand interactions, or costs, etc.

Fill in this section of your Lean Canvas with the metrics that are most critical to the problem you’re trying to solve with your product.

Now you’ve seen what goes into a Lean Canvas, can you see how it’s possible to tell the whole story of your business on one page?

Key things to remember when creating your Lean Canvas

The trick to creating an effective Lean Canvas that fits onto one page is to:

  • Fill in all 9 blocks in the above order and work your way through each one logically.
  • Fill each block with concise notes and link-out to images, documents, and other related information.
  • Remember it’s a fluid, working document that’s not set in stone.

To test the Lean Canvas out before you share it with investors, go through each step and relay the story to yourself:

We will help [customers] solve [problem] by providing them with our [solution] . They will know about us through [channels] and they will be convinced to join us because [value proposition] and because we [unfair advantage] . We will charge them by [revenue] which will cover our [costs] . We will measure our performance by tracking [key metrics] .

It should all flow nicely, like a story where everything is linked. If it doesn’t, it needs more work before you show it to investors.

But wait a minute. Don’t investors expect to see a business plan? Will they take a one-page Lean Canvas seriously?

Why the Lean Canvas works for start-ups

The Lean Canvas is centered around validation and justification. It’s about working the idea out, asking for feedback, and using that feedback to iterate your plan until your idea becomes a valid one.

Your Lean Canvas then becomes living proof that your concept will work. Investors will value proof of concept 10X more than 40 pages of empty promises and unfounded statements.

Not only that, but it’ll take you hours, not months to put together. So, if you get punched in the mouth again, it’s no biggie. Just go back and rework it based on investor feedback.

And it’s quick and easy to update; it moves as you move, allows you to pivot, and it means that you can get your product out to market quickly. These are all reliable indicators for VCs, Angels, and investors that a start-up can take off.

“ It lets you focus on building your business faster, by capturing your idea, collecting feedback, and iterating on it dynamically. ” – Infolio , How to Create a Lean Canvas

To prove the Lean Canvas concept even further, let’s take a look at it in action.

The Lean Canvas in action

Below are two hypothetical Lean Canvas examples from a couple of familiar companies who, although it’s difficult to believe, were start-ups themselves once…!

Lean canvas

In summary, Google’s Lean Canvas story (if the Lean Canvas existed back in 1998!) might have gone a little like this:

We will help all web users to find what they’re searching for easily by providing them with technology that allows them to search and find relevant content . They will know about us through other users and they will be convinced to join us because they’ll be able to find what they’re looking for quickly (unlike with competitors) and because we have an innovative combined citation-ranking system . We will make money through investment and advertising revenue which will cover our hosting and development costs . We will measure our performance by tracking the number of search requests and the percentage of users who end their search on the first page .

Lean Canvas

And, Facebook’s Lean Canvas might have gone like this back in 2004:

We will help all college students to communciate with their peers online by creating an online communication platform that will allow them to connect with their friends, share photos, and chat . They will know about us through referrals from other students and they will be convinced to join us because it’s a student orientated communication platform and because we have invented a new type of website: A social network with social features! We will make money through investment and advertising revenue which will cover our hosting, development, and payroll costs . We will measure our performance by tracking the number of daily, weekly, and monthly active users .

To conclude…

Despite the obvious benefits of the Lean Canvas, it has to be said that:

“A one-page document of this kind may not satisfy every potential investor at every financing stage. But many investors will consider a document like this to be more than adequate. ” – BSchools , Can a Lean Canvas Replace a Traditional Business Plan?

I think we can all agree that the moral of this story is: don’t waste months agonizing over a hefty business plan that no one is likely to read.

Instead, create a Lean Canvas. Tell the story of your business with key information that’s up-to-date and backed by research, testing, and customer proof. Get the ball rolling in one afternoon, with one page.

Think of it this way, which would you rather do:

“ Spend 6 months pitching investors so you can refine a story based on an untested product? Or, spend time pitching customers so you can tell a credible story based on a tested product? ” – Ash Maurya , Leanstack , Bootstrapping + Lean Startup = Low-burn Startup

I’d rather roll with the punches with a Lean Canvas. You?

If you’ve enjoyed this post, sign up to receive the weekly Process Street newsletter here .

What do you think of the Lean Canvas? Have you used it before? Let us know your thoughts in the comments below!

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Amanda Greenwood

Amanda is a content writer for Process Street. Her main mission in life is to write content that makes business processes fun, interesting, and easy to understand. Her background is in marketing and project management, so she has a wealth of experience to draw from, which adds a touch of reality and a whole heap of depth to the content she writes.

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the lean canvas business model with basic instructions

Lean Business Model Canvas: For Every Type of Organization

If we’re going to talk about the lean business model canvas , whether for startups or large businesses, we must start by understanding the meaning of canvas.

The canvas business model is a schematic template, divided into several squares where relevant information must be inserted, which will help you to plan in a very agile and intuitive way.

Thus, we can say that the lean business model canvas aims to develop a business plan quickly, without significant expenses and extended studies, with the help of this schematic template and other methodologies that we will specify later.

The Origin of the Lean Business Model Canvas

Everyone who decides to successfully undertake the start of a new business with lots of motivation will have to do a detailed business plan : define a target market, develop processes , approach suppliers, organize the company financially and pass many other costly and time-consuming steps.

What happens is that, after all this hard work starting the company, things sometimes don’t happen as they should, businesses fail (this is part of the game!) and a lot of effort and capital is wasted.

The idea behind the Lean Startup methodology is to simplify this whole process of creating a new business by using three key, agile, cost-effective and practical principles so that things flow better in the case of failure.

Eric Reis is considered one of the great idealizers of the lean business model canvas, with a modification to the story: he believes that not just startups, but other types of companies can also benefit from it.

Next, let’s take a look at the three pillars of this agile business planning model .

See also: What are some of the challenges faced by small businesses?

The 3 Pillars of the Lean Business Model Canvas

Although readily used by startups, the lean business model canvas, as we have commented, is not unique to them.

Check out the three most important points of this methodology.

1- Canvas vs. Business Plan

Canvas is much leaner and agiler, the use of canvas makes it much easier to make decisions and begin the initial steps of formatting a business .

There are two main variations of this model:

lean business model canvas 02

A Lean Canvas, adapted by Ash Maurya

lean business model canvas 04

Maurya replaces 4 of the original canvas items with others that are considered more focused on the risk of a business not working out.

Besides these, there are other canvas options, depending on the characteristics of the company that is intended to be created.

Many believe that the business model created from the lean canvas is best suited to startups.

Check out this canvas based on Uber strategies

lean business model canvas 02

2- MVP: Minimum Viable Product

A minimally viable product is one that does not have all the final features and functionalities you want in the future, but it has all the potential to be developed along the way.

MVP’s are used to do things faster and with less waste. It involves the development of a product with minimum characteristics to gather validated learning about the product and its continued development.

MVP - Minimum Viable Product

Source:  How to define your Minimum Viable Product?

MVPs are very important for companies that do not have many resources, because with it you can better understand your market and analyze if your product has the expected penetration. With this information you can chart the directions of the product development and align the marketing campaigns according to your audience

For example:

Let’s say you want to develop footwear made from recycled fibers from a material that is only a waste bi-product today? You don’t need to create shoes for all ages and uses, both feminine and masculine. Create something specific such as men’s casual shoes. And over time, if the business succeeds, footwear of various types and for the most varied of uses can be developed from the insights received from the MVP.

3- Agile development

Without delay begin interviews with prospective clients, suppliers and partners, focus on what’s most important and brings value to the product (or service) and the business.

Formulate hypotheses, develop prototypes and validate them with those who are the most interested. In this process, many errors can happen. The only things that should be avoided at any cost are wasted time and wastage.

Based on these three pillars, your company will soon be modeling processes and putting your MPV on the market.

From there, development will be constant. Persevere!

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Lead Flow Method

An Introduction To Lean Canvas – Business Model Design

Words by: Steve Mullen | Filed under: Attract , Build Authority , business model design

Introduction to Lean Canvas - Lead Flow Method - Business Model Design

As an entrepreneur, one of the most important tasks you can perform is getting your idea(s) out from your head into a tangible format so that you can communicate that with others. In the past, this usually meant a well-researched business plan, that would usually take weeks (more like months) to create.

I turn to the Lean Canvas to help me quickly formulate possible business models, product launches, campaigns and variations of, and communicate this with my stakeholders. Having the Lean Canvas as a visual guide made this part “communicating the model/idea” so much more effective — and I think the most valuable function of the tool.

The problem with business plans for startups & entrepreneurs are that they’re a waste of time, don’t get me wrong a well-researched business plan is important but only at the right stage of your business (usually when you’re in growth/investment).

This quote from Steve Blank sums up this point in case: “Business Plan: a document investors make you write, that they don’t read”.

The key fundamental to Lean methodology is the elimination of waste — this includes time, processes, inventory and more. So as a lean startup you need a quicker way to get ideas out of your head, you need to stay lean & avoid waste — so, it’s time to introduce Lean Canvas.

Before we jump into the Lean Canvas it’s important to point out that Lean Canvas has been adapted by Ash Maurya from the very popular Business Model Canvas by Alexander Osterwalder.

Lean Canvas by Ash Mauyra

https://www.youtube.com/watch?v=7o8uYdUaFR4

Lean Canvas uses the same 9 blocks concept except they’ve been modified slightly to suit the needs/purposes/requirements of a Lean Startup. The Lean Canvas is the perfect one-page format for brainstorming possible business models, the blocks guide you through logical steps starting with your customer problems right through to your unfair advantage (often the hardest block to answer).

Blank Lean Canvas:

the lean canvas business model with basic instructions

Source: Running Lean

Here is a quick explainer of each Lean Canvas block (and in the order to go through them):

Each customer segment (CS) you are thinking to work with will have a set of problems that they need solving. In this box try listing the one to three high priority problems that you CS has. Without a problem to solve, you don’t have a product/service to offer.

2. Customer Segments

The problem and Customer Segments can be viewed as intrinsically connected — without a CS in mind you can’t think of their problems, and visa versa.

3. Unique Value Proposition

In the middle of the canvas is the UVP. A value proposition is a promise of value to be delivered. It’s the primary reason a prospect should buy from you. A way to get your head around this is to think about why are you different and why should your CS buy/invest time in you.

Further reading: Useful Value Proposition Examples (and How to Create a Good One)

4. Solution

Finding a solution to the problem is the golden egg! You’re not going to get this right off the first bat — it’s OK, as that’s what Lean is all about. What you need to do is Get Out The Building — a phrase coined by the godfather of Lean Startup, Steve Blanks. And what Blank’s here is that the solution is not in your office, it’s out there in the streets. So go interview your customer segment, ask them questions, and take those learnings. Remember the Lean Startup is validated learning through a continual Build — Measure — Learn feedback loop.

5. Channels

Channels are ways for you to reach your CS. And remember that in the initial stages it’s important not to think about scale but to focus on learning. With that in mind try to think about which channels will give you enough access to your CS at the same time give you enough learning. Channels can be email, social, CPC ads, blogs, articles, trade shows, radio & TV, webinars etc. and BTW you don’t have to be on all of them, just where your CS is.

6. Revenue Streams

How you price your business will depend on the type of model it is, however, it’s quite common for startups to lower their cost, even offer it for free to gain traction, however, this can pose a few problems. The key being it actually delays/avoids validation. Getting people to sign up for something for free is a lot different than asking them to pay. There is also the idea of perceived value.

Further reading: Simple pricing strategies for your products or services, the lean way!

7. Cost Structure

Here you should list all the operational costs for taking this business to market. How much will it cost to build / landing page? What is your burn rate — your total monthly running costs? How much will it cost to interview your customer segment? How much do market research papers cost? etc. You can then use these costs and potential revenue streams to calculate a rough break-even point.

8. Key Metrics

Every business, no matter what industry or size, will have some key metrics that are used to monitor performance. The best way to help with this is to visualise a funnel top down that flows from the large open top, through multiple stages to the narrow end. A good model to help with this is Dave McClure’s ARRRR (aka Pirate Metrics) .

Further reading: Startup Metrics for Pirates

9. Unfair Advantage

This is the most difficult to block to answer. However, do try to think about this as having an unfair advantage can help when it comes seeking partners & investors. Here is a great definition of unfair advantage : “The only real competitive advantage is that which cannot be copied and cannot be bought.” — Jason Cohen. Unfair advantage can be insider information, a dream team, getting expert endorsements, existing customers etc. So rather than think about adding something like “commitment and passion” as an unfair advantage (because it is not), think about what you have that no one else can buy.

Completed Lean Canvas:

Lean Canvas - Leadify - Digital Marketing Training

[image source: Ian Fitzpatrick ]

The idea here is to spend around 15–20 minutes to get that idea down on to paper. Some people prefer to project the PDF onto a wall and use sticky notes to add their ideas into the boxes. But I’ve become so used to Lean Canvas that I sketch my business model ideas directly into my notebook.

Now that you have your first Lean Canvas, the key is to test. Ash encourages you to try as many iterations of the first canvas as possible and to test each one after which a winning business model will emerge. Sounds like hard work? Well yes, it is. But going through this process will save you time, energy and money. Think about it: the worst possible outcome for any entrepreneur is to build something that no one wants!!

The Lean Canvas

As a business entrepreneur, it’s your duty to get ideas out of your head onto paper so that others can see and help build the problem solution. Traditional business plans are not relevant in the ideation stage, they take too much time and are usually created without any validated learning. Business plans are more suited to once you have a business running and are looking to scale.

During the ideation stage try to stay lean, use the Lean Canvas to get your ideas down and use lean principles to test your hypothesis by getting out the building.

It is my wish that this introduction to Lean Canvas has helped spark an idea, or given some inspiration to startup. I have linked to all sources — I follow these blogs and I recommend you do too. If this post has got your Lean on 🙂 I’d welcome comments below or you can reach out to me through my Twitter @leadflowmethod

I’d like to close off by thanking Ash Maurya for his excellent thinking behind Lean principles and I would highly recommend you visit his LeanStack blog and buy his Running Lean  & Lean Analytics books – both are excellent.

As always, to your success.

Steve Mullen Digital Marketing Training

8 thoughts on “An Introduction To Lean Canvas – Business Model Design”

What page is the “Business Canvas Model” on? The image that is in color.

Hey DG, if you look under the image there’s an image source credit: startitup.co but in responding to you, I thought I’d check the link again and it seems the page is no longer active.

I was going to remove the link but then I recalled a comment posted on Medium where I first published this post. It was from the creator of that completed Lean Canvas, Ian Fitzpatrick (who’s gone on to create giftster.com an awesome start up).

Thanks DG, for your comment!

Thank you for being clean and to the point . Simple with purpose!

You’re welcome, Amanda, and thank you for the comment… glad you enjoyed the post!

hey, how can I help?

You’re welcome Esther… happy planning!!

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How to Read and Evaluate a Business Model using the Lean Canvas

Business Model

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If you’re a business leader on the lookout for promising new ventures to fund, the Lean Canvas has become an indispensable tool. This one-page business model is designed to offer a clear snapshot of a business opportunity. As a result it’s the tool of choice for innovators to communicate their ideas to business leaders with the authority (and budget) to get a project off the ground.

But how do you truly understand the viability of an idea presented this way? What are the potential pitfalls to watch out for? And perhaps most critically, how can you probe deeper, asking the right questions to unearth the hidden details?

In this guide we’ll walk through how to read and evaluate a Lean Canvas, helping you spot the most promising innovations for funding.

Understanding the Lean Canvas

Let’s start with a quick recap of the Lean Canvas.  (If you’re already comfortable with the Lean Canvas, feel free to skip ahead .)

Developed by Ash Maurya, the Lean Canvas is inspired by Alexander Osterwalder’s Business Model Canvas. The primary purpose is to quickly sketch out and validate business ideas. It simplifies the traditional business plan into nine essential building blocks, highlighting potential challenges and solutions.

  • Problem: This section lists the top problems the business aims to solve. Look for problems that are genuinely painful or troublesome for the target market.
  • Solution: Potential solutions to the identified problems. This doesn’t need to be fully fleshed out initially but should offer a clear path to problem-solving.
  • Unique Value Proposition (UVP): This is the startup’s promise of unique value to the customer. It should be compelling and differentiate the business from competitors.
  • Unfair Advantage: Something the business has that cannot be easily copied or bought. This could be things like insider knowledge, a patent, or a unique business connection.
  • Customer Segments: Who the business targets as customers. They should be clearly defined, and there should be evidence of demand from this segment.
  • Key Metrics: The indicators the business will use to measure success. These should be relevant and show a clear path to growth.
  • Channels: How the business plans to deliver its solution to customers. These could include online platforms, physical stores, or direct sales.
  • Cost Structure: Lists all the major costs involved in running the business.
  • Revenue Streams: Details how the business plans to make money.

Reading the Lean Canvas: Where to Start

For most people reading this article you’ll have had a lifetime of training to read a sheet of paper from left to right. But if you do that with a Lean Canvas you’ll find it complicates your understanding. To truly harness its power and evaluate its contents efficiently, it’s essential to know where to start.

1. Begin with the Core: Customer, Problem, Solution, and UVP

  • Customer: Understanding who the business aims to serve is foundational. If you’re not clear on the target audience, the rest of the canvas loses context. Knowing the customer gives insight into market size, potential demand, and the viability of the proposed solution.
  • Problem: Before diving into solutions, it’s crucial to grasp the problem being addressed. A clearly defined problem hints at the intrapreneur’s research and understanding of the market.
  • Solution: Once you’re familiar with the problem, the proposed solution will make more sense. This gives insight into the business’s innovative approach and its potential effectiveness.
  • Unique Value Proposition (UVP): The UVP ties together the customer, problem, and solution, showing how the business plans to stand out. A compelling UVP can be a strong indicator of the business’s potential success in the market.

Starting with these sections helps establish a narrative. You’ll get a clear picture of the core business idea, its target audience, the challenges they face, and how the business plans to address those challenges uniquely.

2. Next, Dive into the Finances: Costs and Revenue

With a grasp of the core idea, it’s time to delve into the business’s financial feasibility.

  • Cost Structure: This provides a rundown of the expenses involved in bringing the solution to life and sustaining the business. It’s vital to know if the business has realistically accounted for all potential costs.
  • Revenue Streams: Equally critical is understanding how the business plans to make money. This section should align with the earlier UVP, offering monetization strategies that resonate with the value proposition.

By examining costs and revenue after understanding the core idea, you gain a holistic view. You’ll be able to assess whether the financial aspects support or challenge the business’s proposed solution and UVP.

3. Dig in to the Details

If the core concept shows potential, you’re now equipped to dig into some of the detail, looking at Channels , Key Metrics and Unfair Advantage .

Why This Order?

The essence of a business lies in its ability to solve a problem for a specific customer in a way that stands out—hence the emphasis on the Customer, Problem, Solution, and UVP sections first. These sections offer a storyline and context. Once you’ve grasped the story, the financial sections (Costs and Revenue) act as a reality check, ensuring that the narrative is grounded in economic viability.

In essence, this structured approach to reading the Lean Canvas ensures that you’re not just captured by a great idea but that you’re also considering its practicality and potential for real-world success.

Ask the Right Questions to Assess Viability

Here are a few prompts you can use to accelerate your analysis of a Lean Canvas. Some of these prompts are questions to ask yourself as you read the canvas, others are questions to ask the intrapreneur.

  • Does the canvas tell a cohesive story? All the segments of the Lean Canvas should connect and tell a cohesive story about the business. If one section contradicts another, this could be a red flag.
  • Are the customer segments well-defined? Has the business done its homework in understanding its target market?
  • Does the problem resonate? Is it a genuine problem that a significant number of people face? Is there evidence or research to back this up?
  • Is the UVP compelling? Does the proposed solution truly stand out in the market?
  • Do the revenue streams and cost structures make sense? Are they realistic and sustainable? Look for clarity in monetization strategies.
  • What is the unfair advantage? Is it genuinely unique and sustainable over time?
  • What evidence is available to back up the canvas? The Lean Canvas is based on assumptions, and it’s crucial to validate them. Has the intrapreneur conducted market research, interviews, or pilot testing? Concrete data always trumps assumptions.
  • Can you see a path to a scalable, sustainable business? While the initial canvas might reflect early-stage thinking, there should be signs that the business can grow and sustain itself long term. If the model seems too narrow or niche without a clear path to expansion, it might be a concern.
Want to learn more about how to lead innovation projects and manage intrapreneurs? Then this one-day training might be ideal for you: Leading Innovation and Managing Intrapreneurs .

It’s a Wrap!

So there you have it: how to read and evaluate a Lean Canvas business model in four easy steps.

We’ll leave you with one final tip : As with all business tools, the Lean Canvas is most effective when combined with critical thinking and open dialogue with innovators. If you see a germ of an idea, work with the intrapreneurs to help them evolve their concept into something worthy of funding.

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The Lean Canvas: Crafting Winning Business Model Tool

The Lean Business Model Canvas is a visual tool used to simplify and analyze a business model. Users focus on creating a minimum viable product to validate the business idea with customers as quickly and efficiently as possible. Based on the Business Model Canvas framework, the Lean Canvas emphasizes rapid experimentation and iteration.

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Table of Contents

In the world of business, it’s a universally accepted truth that time and information are invaluable resources. Effectively harnessing these resources is a fundamental key to achieving enduring success in any venture.

Fortunately, The Lean Canvas offers a practical solution by providing a structured framework that allows for the efficient and concise depiction of a business model . In this article, we will not only explore the importance of time and information but also delve into how The Lean Canvas empowers businesses to articulate their models swiftly and comprehensively. This approach not only saves time but also facilitates informed decision-making, ultimately paving the way for business growth and innovation.

In this article, we discuss Lean Canvas and how you can use it to describe your business’s plan for delivering value. As you’ll see, understanding and implementing a Lean Canvas can open many doors for innovation and growth.

What is a Lean Canvas?

A Lean Canvas is a strategic management and entrepreneurial tool that helps businesses quickly visualize, develop, and communicate their business model . Think of it as a one-page business plan outlining the most important elements of your business in a concise and easy-to-understand format.

The Lean Canvas was developed by Ash Maurya as a simplified version of Alexander Osterwalder’s Business Model Canvas. The Lean Canvas focuses on identifying the unique value proposition of a business and its target customers, as well as key elements of the business, like revenue streams , cost structure , and customer acquisition channels.

Your Lean Canvas should be a living document that can be updated and refined as your business grows and evolves. It is often used by startups and entrepreneurs who are seeking to develop and refine their business model but can be used by any business looking to clarify and communicate its strategy in a simple and visual way.

At Digital Leadership, Our Business model strategy service is crucial for entrepreneurs using the Lean Canvas. We provide expert guidance, validate assumptions, aid in strategic planning, offer market insights, assist with adaptability, and enhance investor communication. We optimize the use of Lean Canvas, refine business models, and drive sustainable growth.

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What is the Purpose of a Lean Canvas?

The purpose of Lean Canvas is to provide a simple and effective way for entrepreneurs and businesses to develop and communicate their business models . It serves several important functions, including:

  • Clarity: The Lean Canvas helps business owners clarify their ideas and focus on the most important aspects of their business. By distilling a complex business model into a simple one-page document, it provides a clear and concise summary of the business and its value proposition.
  • Communication: The Lean Canvas provides a common language for all stakeholders, including investors, employees, and customers. It communicates the key aspects of the business in a way that everyone can understand.
  • Iteration: The Lean Canvas is a living document, updated and refined as the business evolves. Entrepreneurs iterate quickly and make changes to their business model based on feedback and new information.
  • Validation: Entrepreneurs validate their business model by identifying potential problems and opportunities. By testing assumptions and gathering feedback, entrepreneurs refine their business models and increase their chances of success.

The Lean Canvas is a tool for any entrepreneur or business owner who is looking to develop, refine, and communicate their business model in a clear and effective way.

As we’ll see, Lean Canvas works well within other frameworks and other commonly used business approaches.

Lean Canvas vs. Business Model Canvas

The Lean Canvas and Business Model Canvas are both tools that help businesses visualize and communicate their business model. However, there are some key differences between the two.

The Lean Canvas and Business Model Canvas are both valuable tools for businesses, but they serve different purposes.

The Lean Canvas is ideal for startups and entrepreneurs who are looking to develop and validate their business model quickly and efficiently, while the Business Model Canvas is better suited for larger, more established businesses that have a clearer understanding of their business model and are looking to refine and optimize it.

What is a Business Model Canvas?

The Business Model Canvas is a strategic management and entrepreneurial tool that helps businesses visualize, analyze, and develop their business model in a structured and comprehensive way. It is a visual chart with nine building blocks that represent the key elements of a business.

The Business Model Canvas was developed by Alexander Osterwalder and Yves Pigneur. It has become a popular tool used by businesses of all sizes and stages of development to map out their business model in a concise and easy-to-understand format

Business Model Canvas Template

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Business model canvas building blocks.

By considering and refining each of the nine building blocks in the Business Model Canvas , companies can design and optimize their business model to better serve their customer segments and achieve long-term success:

  • Customer Segments: The groups of people or organizations that a company aims to serve with its products or services.
  • Value Proposition: The unique benefit or advantage that a company offers to its customer segments.
  • Channels: The different ways that a company reaches and interacts with its customer segments to deliver its value proposition.
  • Customer Relationships: The types of relationships a company establishes with its customer segments to build and maintain loyalty.
  • Revenue Streams: The sources of revenue that a company generates from its customer segments.
  • Key Resources: The physical, financial, human, and intellectual assets required to deliver the value proposition.
  • Key Activities: The critical actions a company must take to deliver its value proposition and operate its business model.
  • Key Partnerships: The strategic alliances and relationships a company forms with other organizations to support its business model.
  • Cost Structure: The expenses that a company incurs to operate its business model and deliver its value proposition.

Lean Canvas Building Blocks

The Lean Canvas is a one-page business model template that consists of nine building blocks, which are as follows:

  • Problem: This refers to the customer pain points, problems, and challenges that the business aims to address.
  • S olution: This refers to the product or service that the business offers to solve the customer’s problem.
  • Unique Value Proposition (UVP): This refers to the unique benefits and value that the product or service offers to customers compared to competitors.
  • Customer Segments: This refers to the different groups of customers that the business targets with its product or service.
  • Channels: This refers to the different methods or channels through which the business delivers its product or service to customers.
  • Revenue Streams: This refers to the different ways that the business generates revenue, such as one-time sales, subscriptions, or advertising.
  • Cost Structure: This refers to the total costs that the business incurs to create and deliver its product or service.
  • Key Activities: This refers to the critical actions that the business needs to take to create and deliver its product or service.
  • Key Partners: This refers to the external entities or organizations that the business needs to collaborate with to operate effectively and efficiently.

By filling out each of these building blocks, a business can develop a clear and concise business model that outlines its strategy, target customers, and revenue-generating potential.

For a deeper understanding of how to effectively utilize these building blocks and create an innovative and sustainable business model, you can explore our book “How to Create Innovation.” It provides valuable insights and practical guidance on leveraging these canvases to drive business growth and success.

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The When & the Why

As you can see, the Lean Canvas and the Business Model Canvas each discuss similar though different areas of a business.

How do you know which one to use?

Let’s explore why one might be chosen over the other in particular situations.

When to Use the Lean Canvas?

The Lean Canvas is a tool that is typically used by startups and entrepreneurs who are in the process of developing and refining their business models. It can be used in a variety of situations, including:

  • Idea validation: to validate new business ideas and determine if there is a viable market for a product or service.
  • Business planning: to develop a business plan, which outlines the key elements of the business model and the strategy for bringing the product or service to market.
  • Strategy development: to develop and refine the strategy for the business, including identifying the target market, value proposition, and competitive advantage.
  • Pitching to investors: Pitching the business to potential investors, as it provides a clear and concise overview of the business model and its potential for success.

A Lean Canvas works for anyone who is looking to develop, refine, and communicate their business model concisely. Whether you are a startup founder, entrepreneur, or business owner, the Lean Canvas can help you focus on the most important elements of your business.

Why Use the Lean Canvas?

As we’ve mentioned, a business should use Lean Canvas because it provides a simple and effective way to develop and communicate its business model.

The Lean Canvas helps entrepreneurs clarify their ideas, focus on the most important aspects of their business, and communicate their vision to stakeholders. It allows businesses to iterate quickly and make changes to their business model based on feedback and new information.

By testing assumptions and gathering feedback through the Lean Canvas, organizations can refine their business model with little risk of wasting resources.

Download the UNITE Lean Canvas Template

We are proud to bring you the UNITE Lean Canvas Template. It’s the perfect tool for quickly evaluating the most important elements of your business and analyzing them for growth and innovation potential.

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How Do You Use the UNITE Lean Canvas?

Like a blank page the night before your final essay is due in class, a blank Lean Canvas can be very intimidating. As with all big tasks, however, with some work and organization, you can break the project into smaller pieces and tackle them one at a time.

For the UNITE Lean Canvas , that means concentrating on one section of the canvas at a time:

  • Start with a blank canvas: Just like the traditional Business Model Canvas, you can either print out a blank canvas or use an online tool to create a digital version.
  • Identify your problem: Instead of starting with customer segments, start with the problem that you are trying to solve. Define the problem clearly in the “Problem” block.
  • Determine your solution: Identify the solution that you are proposing to solve the problem. Write down your solution in the “Solution” block.
  • Identify your target customers: Determine the customer segments that are most likely to benefit from your solution. Write down your target customers in the “Customer Segments” block.
  • Determine your value proposition: Identify the unique benefits that your solution offers to your target customers. Write down your value proposition in the “Value Proposition” block.
  • Determine your channels: Figure out the different ways that you can reach your target customers and deliver your value proposition. Write down your channels in the “Channels” block.
  • Establish customer relationships: Determine the types of relationships that you need to build with your target customers to establish loyalty and trust. Write down your customer relationships in the “Customer Relationships” block.
  • Determine your revenue streams: Identify the ways that you will generate revenue from your target customers. Write down your revenue streams in the “Revenue Streams” block.
  • Determine your key resources: Figure out the key resources that you need to deliver your value proposition, such as physical, financial, human, and intellectual resources. Write down your key resources in the “Key Resources” block.
  • Identify your key activities: Determine the critical actions that you need to take to deliver your value proposition and operate your business. Write down your key activities in the “Key Activities” block.
  • Determine your key partnerships: Figure out the strategic alliances and relationships that you need to form with other organizations to support your business model. Write down your key partnerships in the “Key Partnerships” block.
  • Identify your cost structure: Determine the expenses that you will incur to operate your business model and deliver your value proposition. Write down your cost structure in the “Cost Structure” block.

By filling out each of these building blocks on the Lean Business Model Canvas , you can create a focused, agile business model that is designed to quickly iterate and adapt based on customer feedback and changing market conditions.

Lean Business Model Examples

Here are some examples of businesses that have successfully implemented a lean business model:

  • Dropbox: Dropbox is a cloud storage service that allows users to store and share files online. Dropbox started with a minimum viable product (MVP), which was a video demonstrating the concept before they started building the product. By doing this, they were able to get feedback from potential users before investing significant time and resources into development.
  • Zara: Zara is a fashion retailer that uses a fast fashion approach to quickly produce and distribute new clothing lines. By keeping their design and production process in-house, Zara can quickly respond to trends and customer demands, reducing waste and keeping inventory levels low.
  • Toyota: Toyota is a car manufacturer that has implemented the Lean Production System, also known as the Toyota Production System (TPS). TPS focuses on reducing waste, improving efficiency, and continuously improving processes. This has allowed Toyota to produce high-quality vehicles at a lower cost than many of its competitors.
  • Amazon: Amazon is an e-commerce giant that has revolutionized the retail industry with its focus on customer experience, data-driven decision-making, and continuous experimentation. Amazon’s lean business model includes a focus on optimizing their supply chain, reducing waste, and experimenting with new products and services.
  • Airbnb: Airbnb is an online marketplace that allows people to rent out their homes or apartments to travelers. Airbnb started with a simple website and a focus on providing a great user experience. By constantly experimenting and iterating on its products, Airbnb has been able to grow quickly and become a dominant player in the travel industry.

What is the Goal of Using the UNITE Lean Business Model Canvas?

As we’ve said a few times, the goal of the Lean approach is to cleanly, quickly, and clearly illustrate the basic value a business delivers. The canvas serves as a model to explore ideas and iterations—it’s much better to simply risk some paper and pencils than important resources that could make your business vulnerable.

Closing Thoughts

When speed and clarity matter, the UNITE Lean Canvas is your best tool for innovation and business growth. With a little work, you can evolve how you deliver value to find the best ways to meet your customers’ needs.

Frequently Asked Questions

1- how does the lean canvas help startups stay lean and agile.

The Lean Canvas helps startups focus on the most important aspects of their business. By forcing them to distill their business plan down to a one-page document, they are encouraged to focus only on the most critical elements of their business model. By creating a simple and easy-to-update document, startups can quickly make changes to their business model based on feedback and new information.

2- Can Lean Canvas be used for established businesses, or is it only for startups?

The Lean Canvas can be a valuable tool for any business that is looking to make changes to its business model or strategy. Established businesses can use Lean Canvas to explore new business models or make changes to their existing business models. Overall, Lean Canvas is a versatile tool that can be used by both startups and established businesses to develop, test, and refine their business models and strategies.

3- What are some common mistakes entrepreneurs make when using Lean Canvas, and how can they be avoided?

One of the most common mistakes entrepreneurs make when using Lean Canvas is focusing too much on their solution. This can result in a solution that doesn’t solve the customer’s problem or address their needs.

Another common mistake is not testing assumptions. Entrepreneurs may make assumptions about the market, customers, or the problem they are solving without testing them.

Some entrepreneurs may become too attached to their initial assumptions or solutions and not be willing to make changes.

4- Can Lean Canvas be used in conjunction with other business planning tools, such as SWOT analysis or Porter’s Five Forces?

Yes, the Lean Canvas can be used in conjunction with other business planning tools, such as SWOT analysis or Porter’s Five Forces. In fact, you’ll find using multiple tools can provide a more comprehensive view of the business and its potential opportunities and challenges.

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Lean Canvas vs. Business Model Canvas

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The lean canvas vs. the business model canvas: a quick guide for beginners.

Business strategies guide an organization's decision-making process, providing a roadmap for achieving its objectives. A critical component of these strategies is the business model, which describes how an organization creates, delivers, and captures value. Two popular tools for designing business models are the Lean Canvas and the Business Model Canvas. This article will give you an overview of both the Lean Canvas and the Business Model Canvas, helping you understand the pros, cons, and practical applications of each.

The Business Model Canvas

The Business Model Canvas, conceptualized by Alexander Osterwalder and Yves Pigneur, provides a visual framework for designing, analyzing, and evolving business models. It has nine components, each representing a critical business element:

Value Proposition : The unique combination of products and services a business offers to meet its customers' needs.

Customer Segments : The different groups of people or organizations a business aims to reach and serve.

Channels : How a business reaches its Customer Segments to deliver its Value Proposition.

Customer Relationships : The types of relationships a company establishes with specific Customer Segments.

Revenue Streams : The cash a company generates from each Customer Segment (costs must be subtracted from revenues to create earnings).

Key Resources : The most important assets to make a business model work.

Key Activities : The essential activities a business must undertake to operate successfully.

Key Partnerships : The network of suppliers and partners contributing to the business's success.

Cost Structure : All costs incurred to operate a business model.

This model's primary advantage is its comprehensive nature, enabling businesses to understand their operations holistically. However, it's broad in scope, which can lead to generalizations, oversights, or delays in the development process due to its complexity.

Companies like Skype have effectively used the Business Model Canvas. Skype's primary value proposition is providing free or low-cost communication services, targeting a broad customer segment worldwide.

The Lean Canvas

Proposed by Ash Maurya, the Lean Canvas is a variant of the Business Model Canvas, tailored to startups. Its nine blocks are:

Problem : The top problems the business is solving.

Solution : The solution offered for these problems.

Key Metrics : The key actions that matter the most to the business.

Unique Value Proposition : A single, clear, compelling message that states why you are different and worth paying attention to.

Unfair Advantage : Something that cannot easily be copied or bought.

Channels : The paths to customers.

Customer Segments : The target customers.

Cost Structure : All costs incurred to operate the business model.

Revenue Streams : The way the company makes money.

The Lean Canvas is ideal for startups because it focuses on problem-solving, adaptability, and fast iteration. Yet, its primary limitation is that it may oversimplify certain business aspects, especially for complex, large-scale operations.

Companies like Dropbox have used Lean Canvas. Dropbox's unfair advantage was its viral referral system, significantly lowering customer acquisition costs.

Comparing the Business Model Canvas and the Lean Canvas

Purpose and focus.

While both the Lean Canvas and Business Model Canvas visually represent your business model, they each have a unique purpose and focus. The Business Model Canvas is designed for established companies looking to innovate within their existing model. It presents a broad perspective suitable for the complexities of large, multifaceted businesses. In contrast, Lean Canvas is designed for startups, favoring agility and emphasizing key issues that startups often face, such as problem identification, testing potential solutions, and establishing unique value propositions.

Component differences

The two models differ in their components as well. The Business Model Canvas includes blocks like "Key Partnerships" and "Customer Relationships," reflecting the broader stakeholders and relational dynamics of established businesses. On the other hand, Lean Canvas replaces some of these components with "Unfair Advantage," "Problem," and "Solution," placing greater emphasis on competitive differentiation and problem-solving, critical aspects for startups.

Implementation process

Another distinguishing factor is the implementation process. The Business Model Canvas, due to its comprehensive nature, might require more significant cross-functional effort and time to fill out effectively. Conversely, the Lean Canvas can be filled out quickly, enabling rapid iterations and pivots based on market feedback.

Risk and uncertainty

Finally, risk and uncertainty are handled differently in each canvas. The Business Model Canvas presumes a certain level of business model certainty, which might not be present for startups or new projects within established businesses. On the other hand, Lean Canvas adopts a problem-solution approach, encouraging continuous learning and adaptation in the face of high uncertainty.

How to choose?

The Business Model Canvas and Lean Canvas serve different purposes, and they are best suited to different types of businesses. They're not mutually exclusive and could be used in tandem to provide different perspectives on your business model. The choice between the two will depend on your business's context, needs, and the level of certainty or uncertainty you are dealing with.

How to implement either the Lean Canvas or Business Model Canvas

Implementing either of these models requires understanding your business deeply. Start by filling out each segment honestly and objectively, focusing on your business's current status. Remember to review and iterate your canvas regularly, as business models are dynamic and should evolve over time.

Common mistakes include being overly optimistic or pessimistic in your assessments and not taking the time to validate your assumptions. These can be avoided by regularly testing your hypotheses and gathering feedback from your target market.

Both the Lean Canvas and Business Model Canvas offer valuable insights into your business's operations. They enable you to visualize your business model, identify potential weaknesses, and devise strategies for improvement. Therefore, we encourage you to explore both models and use the one that best fits your business's needs.

Further Reading and Resources

For those interested in learning more about these models, "Business Model Generation" by Alexander Osterwalder and Yves Pigneur is an excellent resource for the Business Model Canvas. For the Lean Canvas, "Running Lean" by Ash Maurya offers a comprehensive guide. Various online courses, webinars, and workshops are also available for both models. To get started with designing your own canvas, Miro provides free online templates for both the Lean Canvas and the Business Model Canvas .

This marks the beginning of your journey into Lean Canvas and Business Model Canvas. Happy exploring!

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Lean Canvas vs. Business Model Canvas: Learn The Difference

By Paul VanZandt

Published on: July 24, 2023

Lean Canvas vs. Business Model Canvas

Table of Contents

What is a Lean Canvas?

Elements of a lean canvas, what is a business model canvas, business model canvas elements, lean canvas vs. business model canvas: differences, lean canvas vs. business model canvas: which is the best.

Generally, a business model contains a company’s strategic and financial approach to its market. It captures how a business intends to sell its products or services, the costs attached to the sale, and most importantly, the target market. A business model canvas provides the structure that allows a business to thrive. However, it is not the only template that can help structure a business model, and the Lean Canvas is a popular alternative that can help this endeavor. A business model canvas contains a detailed one-page representation of a business strategy, vision and marketing ideas. On the other hand, a Lean Canvas is a one-page sketch of a business plan that focuses on business problems. In this article, we will compare the lean canvas vs. business model canvas and talk about their various similarities, differences, and advantages.

Visualize holding a 50-page book, and you need crucial information that resides inside of this book. Wouldn’t you appreciate a one-page summary of that book that provides you with the information you need at a glance?

The Lean Canvas is created with this in mind and focuses on the core details that can get a business off the ground. The Lean Canvas is a page-long summary of a business plan. It focuses on its value proposition and the problems a new business could face.

Start-ups often use the lean canvas as they are new and surrounded by uncertainties. Survival is paramount to founders, which means a plan that puts the risks and problems as priorities. The lean canvas allows the founders of a start-up to remain focused on surviving and pivoting their business model as their business grows.

Below are the elements that make up a Lean Canvas . These will be slightly different than those of a business model canvas but help portray a unique picture of your value proposition and ideal customer

  • Problem: Like all businesses, your goal is to sell or provide a service as a start-up. The market must need what you want to deliver.
  • Solution: Many start-ups are competing for the same market as you. This means your solution must be positively different from what is already existing.
  • Key Metrics: These are the crucial consumer activities such as leads generated, new users, or market penetration.
  • Revenue Generation: You must solve the issue of revenue generation to stand a chance as a start-up.
  • Expenditure List: List out expenditures you have made in running the business.
  • Customer Channels: Your lean canvas must contain the means you want to use to get customers to notice your product or service.
  • Advantage: You should know the advantage you have over competitors.
  • Unique Value Proposition: The value proposition is key to the Lean Canvas and details the unique value that your business can bring customers.
  • Customer Base: You must note where your customers are coming from and their core persona.
  • Prioritizes the problems a start-up could likely face
  • Easy to understand and share
  • Easy Update of contents
  • Narrowly restricts business performance
  • Prioritizes immediate value instead of the future goals

Learn more: What is a Lean Canvas?

The business model canvas is more inclusive than the lean canvas as different businesses can use this template. The business model canvas contains a business’s marketing, operational and strategic plans. The business model canvas is interestingly also a page despite its details.

This template is an alternative to the traditional business model with its detailed yet simple look. Alexander Osterwalder created this model for different businesses. This model serves as the foundation for the activities of companies, new and old.

These are the essential elements of a business model canvas . Like it’s described, this is the most accurate distillation of a traditional business model, and the elements will reflect some of the most important facets of your business.

  • Customer Segments: This section lets you know and research the people you would like to convert as customers.
  • Customer Relationship: You have your customer segments, but what relationship do you want to have with them? Document the kind of relationship you would like to have with customers.
  • Product or Service Value: You are not the only business that has provided a solution to consumers through your product or services. You have to show things that would make consumers choose your product. Let them know the distinct benefits your product has.
  • Channels: It is how a company communicates with the customers to tell them about the value they would get from the company’s product or service.
  • Key Activities: These activities are the ones you will use to show the value of your product and service.
  • Revenue Generation: Your business model canvas must contain the different ways you can make money.
  • Crucial Resources: These are the vital assets that allow your business to function.
  • Important Partners: These are the other companies you would need to perform crucial activities that will allow you to provide customers with value.
  • Costs: You have to provide the amount you have spent during business operations. A costs list lets you know if your business plan is working or not.
  • Targets customer need
  • Easy access to operational demands
  • Brief and easy to understand template
  • It doesn’t focus on customer value
  • Not very accommodating of start-ups

Learn more: What is a Business Model Canvas?

So, lean canvas Vs. business model canvas. Let us explore these two templates . You can see that each is similar yet so different from the other. The differences between these two are;

  • Lean canvas focuses on entrepreneurs, while business model canvases emphasize customers, entrepreneurs, advisors, and consultants.
  • Lean canvas targets start-ups, while business model canvas targets new and existing businesses.
  • Lean canvas encourages start-ups to focus on the problems their businesses could likely face. The rationale is that a new business needs to solve a problem before anything else. Alternatively, the business model canvas examines revenue streams and business assets.
  • A start-up using the lean canvas competes differently. They compete using their product’s unfair advantage over their competitors and exploit it. Companies using the business model canvas focus on the value of their product to beings to stay market relevant.
  • Customers are a luxury for start-ups using the lean canvas, and they don’t emphasize customers. Having a helpful product is the key there. Customers are everything with a business model canvas, as companies using that model are already popular in the market.

Your choice should depend on your business reality. As a new business, the lean canvas gives you the practicalities needed to survive as it is simpler and more problem-oriented.

A more grounded company would find that the business model canvas is a better fit for them as it focuses on optimizing their processes to achieve future goals. These companies have already passed the start-up phase and have a product to sell.

Notwithstanding which you decide to go with, adaptability is crucial as you will need to make changes from time to time. If you liked this article, make sure you check out our other materials, like the various lean canvas advantages , and if you want another option for a business model, check out our innovative CO-STAR template .

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  1. Lean Canvas

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  2. Lean Business Model Canvas: Examples + 3 Pillars + MVP + Agile

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  3. An Introduction to Lean Canvas

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  4. 9 Steps To A Lean Business Model

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  5. Business Model Canvas Lean

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COMMENTS

  1. Design Your Lean Canvas Model: A Step-by-Step Guide

    Solution Clearly outline your business solution and/or product offering that solves the problems your customers are experiencing. Describes how your solution effectively meets the market's demands. Learn More: Lean Canvas Model: Crafting Solutions and Prioritizing Features Key Metrics

  2. Your guide to the Lean Business Model Canvas

    A lean business model canvas is a one-page business plan that helps you break down your product or business model, question and test your assumptions, and determine if your idea actually has legs. Lean business model canvas explained: What is a lean canvas?

  3. How To Create A Lean Canvas (With Template and Examples)

    Updated October 18, 2023 by Xtensio The Lean Business Model is a great starter tool to present the heart of your business idea on a single page. From the problem to key metrics, the lean canvas tool asks vital questions to help you form a real business case for your grand vision.

  4. Lean Canvas

    Step 4 (of 10): Solution. Step 5 (of 10): Unfair Advantage. Step 6 (of 10): Revenue Streams. Step 7 (of 10): Cost Structure. Step 8 (of 10): Key Metrics. Step 9 (of 10): Channels. Step 10 (of 10): Applications, Review & Next Steps. THE ORIGINAL BUSINESS MODEL CANVAS It's said that no business plan survives its first contact with customers

  5. Lean Canvas

    Lean Canvas is a 1-page business plan template created by Ash Maurya that helps you deconstruct your idea into its key assumptions. It is adapted from Alex Osterwalder's Business Model Canvas and optimized for Lean Startups. It replaces elaborate business plans with a single page business model. Compared to writing a business plan which can ...

  6. What is a Lean Canvas? Definition, Methodology, Examples and ...

    By Paul VanZandt Published on: July 26, 2023 Table of Contents What is Lean Canvas? What is the Lean Methodology? Lean Canvas Examples Lean Canvas Use Guide The Lean Canvas is one of the best structures to achieve successful product iterations, but if you don't know how to use it then it won't be nearly as effective.

  7. How to create a Lean Canvas (with template)

    Business model canvas vs. Lean Canvas. You may stumble upon the business model canvas and find yourself confused whether to use it or move onto a Lean Canvas. These aren't mutually exclusive, but they have a few core differences. The business model canvas focuses on the business aspects. It shows you the fundamental parts of keeping your ...

  8. The Lean Canvas guide: what it is

    It's a 1-page business plan, that is segmented into blocks, each representing a key category of your project. Lean canvas often includes 8 to 9 blocks, each representing the same number of categories. From there, you fill each block with essential information only. This lets you plan projects without complexity.

  9. How to Make a Lean Canvas Model

    The Business Model Canvas is a one-page summary of the high-level strategic details you need to develop, maintain, and market your business. The canvas template is divided into nine boxes that help you focus on the most strategically important elements of your business or product. Business Model Canvas Template (Click on image to modify online)

  10. What is Lean Canvas?

    The Lean Canvas is a business modeling tool created to help deconstruct a startup idea into its key and most risky assumptions. Deeply influenced by the lean startup methodology, the Lean Canvas servers as a tactical plan to guide entrepreneurs navigate their way from ideation to building a successful startup.

  11. How to Fill In Lean Canvas Template: the Guide to Shaping ...

    It consists of 9 blocks essential for building a business: Key partners Key activities Key resources Value propositions Customer relationships Customer segments Channels Cost Structure Revenue streams This strategic management model is being used by all kinds of organizations worldwide to form a successful business blueprint.

  12. An Introduction to Lean Canvas

    The Lean Canvas is the perfect one-page format for brainstorming possible business models, the blocks guide you through logical steps starting with your customer problems right through to your...

  13. Lean Canvas (2024): How-to & Examples [+ Template]

    The Lean Canvas also focuses on capturing a unique place in the market. 1. Customer Segments. Not everyone needs your product, it is important to be as specific as possible in choosing your customer segment. Without a clear customer segment it is also not possible to properly empathize with the customer segment's problems.

  14. How to Create your Business Model with the Lean Canvas

    How to Create your Business Model with the Lean Canvas. by Dr. Thomas Papanikolaou on Feb 7, 2020 A business model describes how a company creates, delivers, captures and defends value. While this definition may sound complex, defining and developing a business model does not have to be a daunting task.

  15. Lean Canvas: How To Create a Business Plan that People Will Actually

    The answer to this dilemma is the Lean Canvas. The Lean Canvas is an actionable, entrepreneur-focused, one-page business plan. Inspired by Alex Osterwalder's Business Model Canvas and the principles behind the Lean Start-Up movement and eradication of waste, Ash Maurya developed the Lean Canvas framework specifically for start-ups.

  16. Lean Business Model Canvas: Examples + 3 Pillars + MVP + Agile

    1- Canvas vs. Business Plan. Canvas is much leaner and agiler, the use of canvas makes it much easier to make decisions and begin the initial steps of formatting a business. There are two main variations of this model: A Lean Canvas, adapted by Ash Maurya. Maurya replaces 4 of the original canvas items with others that are considered more ...

  17. An Introduction To Lean Canvas

    The Lean Canvas is the perfect one-page format for brainstorming possible business models, the blocks guide you through logical steps starting with your customer problems right through to your unfair advantage (often the hardest block to answer). Blank Lean Canvas: Source: Running Lean

  18. How to Read and Evaluate a Lean Canvas Business Model

    6 minute reAD If you're a business leader on the lookout for promising new ventures to fund, the Lean Canvas has become an indispensable tool. This one-page business model is designed to offer a clear snapshot of a business opportunity.

  19. What is a Lean Business Model Canvas? Definition and Its Benefits

    By Paul VanZandt Published on: November 3, 2023 What is a Lean Business Model Canvas? The Lean Business Model Canvas is defined as a visual tool and framework that helps entrepreneurs and business professionals plan and communicate their business ideas, strategies, and models in a concise and structured format.

  20. The Lean Canvas: Crafting Winning Business Model Tool

    The Lean Business Model Canvas is a visual tool used to simplify and analyze a business model. Users focus on creating a minimum viable product to validate the business idea with customers as quickly and efficiently as possible. Based on the Business Model Canvas framework, the Lean Canvas emphasizes rapid experimentation and iteration.

  21. How to Use the Lean Canvas to Validate Your Business Model

    In a video that plays in a split-screen with your work area, your instructor will walk you through these steps: Task 1: Introduction: By the end of this task, you will explain the Lean Canvas. Task 2: Problem: By the end of this task, you will articulate problems of the customer. Task 3: Customer Segment: By the end of this task, you will ...

  22. Lean Canvas vs. Business Model Canvas: A Quick Guide

    The Lean Canvas. Proposed by Ash Maurya, the Lean Canvas is a variant of the Business Model Canvas, tailored to startups. Its nine blocks are: Problem: The top problems the business is solving. Solution: The solution offered for these problems. Key Metrics: The key actions that matter the most to the business.

  23. Lean Canvas vs. Business Model Canvas: Learn The Difference

    A business model canvas provides the structure that allows a business to thrive. However, it is not the only template that can help structure a business model, and the Lean Canvas is a popular alternative that can help this endeavor. A business model canvas contains a detailed one-page representation of a business strategy, vision and marketing ...