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An Introduction to Lean Canvas

Steve Mullen · Follow
6 min read · Jun 17, 2016

4.1K 19

Lean Canvas adapted by Steve Mullen — www.allstarpreneurs.com

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 for my Lead Flow Method & Allstarpreneurs work.
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 — check out this video for more
information (40+ mins).
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:

Lean Canvas adapted by Steve Mullen — www.allstarpreneurs.com

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

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 are.

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
visualize 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 to 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:

Business Model Mockup by Steve Mullen — www.allstarpreneurs.com

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 of
the building.

It is my wish that this introduction to Lean Canvas has helped spark an idea,
or given some inspiration to a 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 ✊🏻
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 excellent
resources.

As always, to your success.

Steve Mullen
Allstarpreneurs

p.s. Enjoyed this post? Check out the Teen Startup Canvas — which I have
created especially for my Teen Startup Squad program, via Allstarpreneurs

Teen Startup Canvas by Steve Mullen, Business Model Design Coach @ Allstarpreneurs

Startup Lean Startup Business Strategy Business Model Canvas Teen Startup