The business world is a hectic place, and time is often a precious commodity. Numerous shortcuts and abbreviations have been developed to expedite and simplify information sharing, from elevator pitches to executive summaries. Lean canvases are another vital tool in the time-poor entrepreneur’s armory, but these documents are quite complex and need detailed knowledge to be tackled effectively.
Before we explain how to fill in Lean Canvas templates, it’s important to outline the concept for anyone unfamiliar with it.
What’s a Lean Canvas?
A Lean Canvas is a one-page document, widely available as an online template in Word and PDF formats. It includes nine sections, each of which will be filled in by an entrepreneur or new business owner. These sections are intended to provide a brief solutions-focused summary of the building blocks that will propel a fledgling business to success.
Because a Lean Canvas document is smaller than many restaurant menus, it’s easy to see the who/what/where/when/why/how at a glance. It’s ideal for sharing with stakeholders and third parties such as lenders or suppliers, while it can be updated far more easily than a full business plan that contains cross-referencing and duplicated use of the same data. A Lean Canvas might require several contributors, each working on specific sections or collaborating across the document.
What are the Lean Canvas key metrics?
The default Lean Canvas contains nine research-driven metrics, each summarized in a compact text box. It’s comprised of:
- Market analysis, including customer segmentation and existing alternatives. Uber might have considered the availability of taxi hire firms before its early testing in New York.
- The problem, including key customer pain points. In the previous example, problems might have included a lack of taxis to hail, the apparent anonymity of their drivers, etc.
- The solution, including where this product or service differs from others. Being unique helps, such as Aurora’s machine-learning-powered self-driving automation technology.
- A unique value proposition, including a high-level concept. Sustainable footwear brand Allbirds focuses on using natural materials rather than the ubiquitous leather.
- Channels for reaching customers. Media agency Giant Spoon was founded specifically to focus on disruptive digital channels like streaming services.
- Revenue streams: Revenue models, subscription pricing, etc. This might be quite off the wall; Coinbase’s profits are drawn from decentralized cryptocurrencies.
- Cost structure: What expenditure will be incurred, when, and why? Mobile fitness brand Apptiv had to invest heavily at the outset in developing on-demand fitness classes.
- Key metrics: How to gauge performance and success. For home improvement brand Renovaten, what would be considered a successful market share/profit level/size?
- Unfair advantages: USPs, exclusive resources, founder insight, etc. Cloud data management firm Rubrik was launched by the founders of Oracle, Google, and Facebook.
We studied each of these points in depth in a recent VeryCreatives blog about compiling Lean Canvas key metrics for startups, and you’ll also find a downloadable PDF template on the same page.
How should I compile a Lean Canvas?
This isn’t something to be thrown together in a frenzied burst of late-night creativity. It’s an organic document that evolves in parallel with the business, as setbacks are encountered and obstacles are overcome. Let’s return to our previous list, and consider the optimal approach to each section:
- Market analysis. Break potential customer groups into segments, considering how and why each identified group might benefit from what you’re proposing. Also look at existing competitors.
- The problem. A brief distillation of the challenges currently faced by the people who may benefit from your product/service.
- The solution. This should be sense-checked with friends, relatives, and other professionals before key takeaways are jotted down regarding what your company will provide or produce.
- Unique value proposition. A UVP or USP is basically asking how your product differs to those offered by competitors, and why customers might choose it.
- Channels for reaching customers. A vintage bookseller will need very different channels from a digital marketing agency. Advertising, marketing, PR, and communications all fall under this banner.
- Revenue streams. For many potential investors and partners, this is the crux of the issue. Where with the profit come from, when will it arrive, and how might it be distributed or reinvested?
- Cost structure. Skip itemized cost breakdowns in favor of a high-level summary of fixed and variable costs which are likely to be incurred up front and over time.
- Key metrics. Ideas include the strengths and weaknesses of competitor apps and services, scope for social media growth, potential investors and pre-orders, minimum success criteria, etc.
- Unfair advantages. Anything can qualify here—an existing pool of satisfied customers, an extensive contacts network, a patented product, or simply identifying a niche before rivals.
How does all this differ from business model canvases?
There are significant differences between a Lean Canvas compared to business model canvases, although the former has been adapted from the latter. Which one you choose often depends on the state of your business. Startups need Lean Canvases, whereas business model canvases are focused on existing companies as they seek to gain market share.
Business model canvases also use nine metrics. The Lean Canvas was derived from the list below, before being modified to focus more specifically on startups:
- Key partners
- Key activities
- Key resources
- Value propositions
- Customer relationships
- Customer segments
- Cost structure
- Revenue streams
Find out what VeryCreatives can do for you
You can discover more about the optimal approach to developing a new business idea by speaking to one of the VeryCreatives team. As a digital product agency, we specialize in helping new firms achieve an MVP. Find out how we can assist you in your next enterprise by booking a no-obligation call.