Lean Canvas

What is a Lean Canvas?

Lean Canvas is a one-page business plan template which helps break down the idea into basic assumptions in order to make it easily readable and editable. It was designed by Ash Maurya specifically for startups. It is target-specific and integrates small and large businesses effectively. It addresses wider customer problems and their respective solutions.

Structure of Lean Canvas

Problem

In the lean canvas, the problem box is created to list one of the three high priority problems which need to be solved. The key here is that you focus on what is important. You dont cover trivial problems, the pressing major problems are what should be focused upon. When businesses fail to apply effort, time, and fiscal resources the wrong products are hence built. It is, therefore, crucial in understanding the problem first.

Customer Segments

Companies HAVE to be customer-centric. In this day and age if your company is not focused on the customer, you will be doomed to fail.

Arslan Rafique

It is better to create a canvas for each customer segment when the target is to attract more than one range of customers. The problem box and customer segments box are linked with each other intrinsically.

Unique Value Proposition

A value proposition is a promise of the value that will be delivered to the customers. This promise is the reason that a prospective buyer will buy. It is situated in the middle of the Lean Canvas.   In order to best understand Unique Value Proposition it is important to think and understand why the product is unique and why should the customer segment buy or invest in the company. Branding based on unique selling points (USP) has become the cornerstone of not only differentiating products but creating a sucessful brand.

Solution

Once the problem has been recognized a cordial solution has to be found. The solution can be found by interviewing the customer segment by asking them questions and taking those learnings into account.

Key Metrics

For a startup, it is better to pivot on one metric and then develop it. The metrics include the range of services or products that will be provided. It is critical to identify the right metric since a wrong one can be disastrous to the startup. Every business has some key metrics that are used in order to monitor the performance.

Channels

The best way to reach out to the customer segment is through channels. To reach the customers directly both paid and free channels can be used. Social media is playing a key role in bridging the gap between companies and their prospective customers.

Cost Structure

In the cost structure, all fixed and variable costs are listed. Questions related to the cost structure should be thought of. From the cost and potential revenue streams, a rough break-even point can be calculated.

Revenue Streams

In order to gain attraction, it is common for startups to offer early bird discounts or they even make free offers. However, a key element to take note of is sales data in offers and promotions tend to tell a skwed picture of the actual market. It is seen that getting customers to sign up for something for free is different than asking them to pay since they are more interested in the free products.

Unfair Advantage

This box according to some can be left blank. The reason it is there is for one to think of how they can be different and how they can make the difference matter. A startup should always be able to recognize if they have an unfair advantage over others. The unfair advantage can be in different forms such as getting expert endorsements, a dream team, insider information, and existing customers.

Interested in setting up a lean canvas for your startup? Reach out to us free of charge for a free consultation.