When you have to launch a startup and validate your business idea, there are two things you may not have: time and money. And if you do have them, you certainly don’t want to waste them. For this reason, the Lean Canvas has become a real trump card for entrepreneurs who want to validate a business idea quickly and on a low budget.
In fact, the Lean Canvas is the compass for every aspiring startupper. On a single page, it allows you to map out the key components of your business, from defining customer segments to identifying revenue streams.
These characteristics, simplicity and clarity, are what make it so valuable: the Lean Canvas prevents you from getting lost in unnecessary details, allowing you to focus, instead, on the fundamental elements that can make the difference between success and failure.
Do you want to make optimization your business mantra? Then here’s what the Lean Canvas is and how to fill it out!
What is the Lean Model Canvas
The Lean Model Canvas is a strategic planning tool used to develop and represent business models in a simple and visual way. It is a variation of the Business Model Canvas, designed by Ash Maurya, based on Lean Startup principles, which emphasizes the importance of validating business ideas through a process of continuous experimentation and learning.
Its goal is to help entrepreneurs and startups test and validate their business hypotheses quickly and iteratively, while minimizing wasted resources. First we work on the problem/solution, then on the product/market, and finally on scalability.
What are the benefits of Lean Canvas
The Lean Business Canvas proves particularly beneficial for startups looking to increase their chances of success and create a sustainable and lasting business. Its simplicity, flexibility and focus on priorities make it an indispensable ally for entrepreneurs seeking to rapidly develop and validate their business model.
Specifically, here are the benefits of using a Lean Canvas Model.
- Simplicity and clarity: the Lean Startup Business Canvas is easy to understand and use. It uses a simple and intuitive visual format that makes it easy for all members of the startup team to understand and communicate the business model.
- Focus on priorities: the Lean Startup Model Canvas forces entrepreneurs to focus on the crucial aspects of their business model because it clearly and effortlessly identifies the problems, unique value proposition, and customer segments. This allows them to avoid getting lost in irrelevant details and to focus on what matters most.
- Iterative approach: the startup Lean Canvas is designed to be used iteratively. As new information is acquired and lessons are learned from experiences, the business model can be easily updated and adapted. This flexible approach allows startups to quickly test and validate business hypotheses, reducing the risk of investing time and resources in unvalidated ideas.
- Effective communication: the Lean Model Canvas can be used as an effective communication tool to present the business model to investors, potential customers and partners. Its simplicity and clarity make it an ideal tool for quickly conveying key information, even within the team itself, which thus remains aligned on strategy and goals.
- Risk reduction: the iterative, evidence-based approach of the Lean Canvas helps reduce the risks associated with launching a new startup. By testing assumptions and adapting the business model based on feedback, startups can increase their likelihood of success and minimize wasted time and resources.
All these benefits emerge if the startup can properly use the 9 blocks in which the Lean Canvas is structured.
How the Lean Canvas is structured
In a classic example Lean Canvas there are nine blocks, divided into two main sections, each representing a key aspect of the business model.
These blocks are arranged in a visual grid on a single page, allowing a clear and immediate overview of the business model. The visual structure normally found on a Lean Canvas template facilitates understanding, communication, and rapid iteration of the business model, making it an effective tool for startups and small businesses.
In the left section we find the points referring to the problem and solution, in the right section the elements of market and feasibility. Each block should be filled in accurately.
How to compile the Lean Canvas
Compiling a Lean Canvas requires a methodical and iterative approach. It is essential to update it as feedback and data are gathered from the marketplace. One should not be afraid to change initial assumptions, as continuous adaptation is critical to refining the business model.
In addition, collaborating with your team to compile the Lean Model Canvas is highly recommended. Different perspectives can enrich the analysis and lead to a more complete and multifaceted understanding of the business model.
Problem
Description: in the “Problem” block, identifies the main problems, difficulties and needs that the product or service intends to solve for customers; indicates existing alternatives, i.e., how problems are solved today.
Examples:
- a healthy meal delivery service that caters to those who work and risk eating poorly on their lunch break, putting their health at risk;
- an anxiety management app that offers support with concrete exercises for students who feel overwhelmed by the stress of school.
- e-commerce selling local food products with 2-hour delivery from order to preserve freshness that other competitors cannot guarantee.
Customer Segments
Description: define the customer groups your startup targets. Who are your ideal customers? What are their characteristics, needs, and problems? In particular, define Early Adopters because they will be the very first users.
Examples:
- personalized online tutoring platform targeting teens preparing for college or wishing to improve their academic performance in preparation for the high school graduation exam;
- sustainable clothing e-commerce that sells its products to people who are looking for unique, quality handmade or limited-edition clothing;
- booking platform for authentic travel experiences for travelers who want to immerse themselves in local culinary culture and participate in tastings, food and wine tours, and cooking classes.
Solution
Description: describe your startup’s proposed solution to the identified problem. Explain how your solution works and why it is better than existing alternatives.
Examples:
- sports equipment e-commerce that, to avoid long delivery times, implements efficient logistics using strategically placed warehouses;
- personal financial management app that links all the user’s bank accounts and credit cards in one place to get a complete overview of their finances;
- educational video content streaming platform that integrates interactive tools, such as quizzes, exercises, and discussion forums, to enhance user learning and engagement.
Unique Value Proposition
Description: describe how your product or service solves customer problems in a unique and differentiated way from the competition. Be clear and concise: explain in a few words why your product is different from others and how it solves customer problems. The “High Level Concept” part of Lean Canvas is about how you envision your idea at the highest level. In other words: what you want your startup to become and how you want people to perceive it.
Examples:
- mental health app that leverages advanced tools for real-time monitoring of emotional state, with personalized advice in real time;
- platform for freelance graphic designers that pays in advance for agreed work by acting as a guarantor in case of disputes with the client;
- e-learning app for professionals that offers gaming-style training paths with levels and rewards in coupons to spend at partner companies.
Revenue Streams
Description: describe how the company will generate revenue from the product or service. You can include different revenue models such as direct sales, subscriptions, licensing, advertising, etc. Bottom line: how will you make money from your startup?
Examples:
- crowdfunding platform that earns by commission on donations collected for creative projects;
- technical service company with hourly rate, then earning per hour of service rendered, for repairing electronic devices;
- sports activity booking app that earns via commission on instructors or sports centers for each booking made on the platform.
Unfair Advantage
Description: outlines the factors that give your company a sustainable competitive advantage that is difficult for competitors to replicate. What makes you unique and why should customers choose you?
Examples:
- e-commerce of exclusively handmade products that sells unique products not readily available elsewhere, made from high-quality materials or with innovative features;
- subscription platform for digital book reading that gives exclusive access to titles from anticipated publications;
- interactive podcast platform that collaborates with industry experts, authors, and influencers to create exclusive content and special podcasts that are not available elsewhere.
Channels
Description: identify the channels you will use to reach your customer segments. These can be sales, distribution, marketing and communication channels.
Examples:
- ecommerce that reaches its customers through direct sales of products through its website;
- app that collaborates with other popular apps to increase its user base and visibility;
- B2B company using advertising platforms such as Google Ads or LinkedIn Ads.
Key Metrics
Description: define the key metrics you will use to measure the success of your startup and its business model.
Examples:
- registered user conversion rate (percentage of registered users who complete the purchase of a course or premium subscription);
- Subscriber Retention Rate (percentage of users who keep their subscription active for more than 3, 6 or 12 months);
- Daily Active Users (DAU)-that is, the number of active users who use the application each day).
Cost Structure
Description: write down in detail the main costs associated with the implementation and distribution of the product or service. It is important to understand what the most significant expenses are: prepare a detailed budget for initial and operational expenses.
Examples:
- costs for the initial development of an e-learning platform and ongoing updates to improve the user experience;
- costs of purchasing sustainable fabrics and materials for the production of clothing for a fashion ecommerce;
- salaries, social security contributions and other costs associated with the company’s personnel.
H2 Lean Canvas example
Let’s take an example of Lean Canvas by talking about Airbnb. Although the basic principles of the Lean Startup methodology were introduced by Eric Ries three years after Airbnb was founded, this project preceded them.
Airbnb was born out of a concrete and pressing need of the two founders, Brian Chesky and Joe Gebbia, namely to make money to pay rent. The inspiration for the solution came from circumstances: at the time, a major conference was being held in San Francisco that had filled every hotel room in the city. That’s how the AirBed & Breakfast website was born in 2007. The guys placed three guests on air mattresses and offered them breakfast for $80 each per night.
Subsequently, the Airbnb team grew (Nathan Blecharczyk joined later), survived several ill-fated releases, and failed to attract any of the 15 angel investors contacted. The trio looked for other ways to develop their project, including selling a cereal box that played on the presidential election (which earned them $30,000). After getting another $20,000 from the prestigious startup accelerator Y Combinator and changing its name to Airbnb, the trio got its first significant investment: $600,000 from Sequoia Capital (YouTube’s first investor). By 2024, according to the Wall Street Journal, the company’s market value reached $10 billion.
Assuming an example Lean Canvas, here is what we might include within that of Airbnb.
Problems:
- difficulty finding cheap places to sleep while traveling
- inability to have authentic and local experiences if the overnight stay is in a hotel
- difficulty of monetizing areas of a house vacant from day to day
- culture of home sharing still not widespread
Solution:
- an online solution where travelers can rent or lease an affordable local apartment and homeowners can earn extra by renting vacant areas on a daily basis
Value proposition:
- travelers can enjoy authentic local experiences
- homeowners can earn extra with vacant home areas
Competitive advantage:
- any homeowner can rent a vacant area
- two-way evaluation system of hosts and visitors
- guest insurance
Customer segments:
- travelers looking for a suitable lodging experience at a low price
- people who have the characteristics to become hosts
Key metrics:
- number of views-bookings per host
- number of hosts
- NPS
- DAU/MAU
Channels:
- referral
- recommendations
- both online and offline advertising
Earnings:
- fee on travelers
Cost structure:
- development
- hosting
- marketing
- payroll
- insurance
- photo
Lean Canvas to be completed in PDF
Download now the original Lean Canvas template by Ash Maurya
Use of Lean Canvas in Lean methodology
Lean methodology is based on the principles of:
- waste reduction;
- continuous improvement;
- focus on customer value.
The Lean Canvas integrates seamlessly with this methodology because of its flexible and iterative structure, which allows entrepreneurs to adapt quickly to changes in the market and customer needs.
Using the Lean Canvas in Lean methodology means taking a systematic approach to identifying and validating key assumptions about your business model. Instead of spending resources on a detailed business plan that may not reflect market reality, the Lean Canvas allows you to quickly test ideas and make changes based on real feedback.
Another key aspect is the ability of the Lean Canvas to keep the team aligned on key objectives and strategic priorities. Every team member can easily understand and contribute to planning because of the clarity and simplicity of the model.
In practice, the use of the Lean Canvas in Lean methodology involves the following steps:
- Problem definition: identify the main problems that the product or service is intended to solve. This is the starting point for developing relevant and valuable solutions.
- Unique value proposition: develop a clear value proposition that differentiates the product from competitors, focusing on the unique benefits offered to customers.
- Experimentation and validation: create prototypes or MVPs (Minimum Viable Products) and test them with target customer segments to gather feedback and validate hypotheses.
- Continuous iteration: building on the feedback gathered to make continuous improvements to the business model, adapting the Lean Canvas to new information and circumstances.
- Performance measurement: use key metrics to monitor progress and evaluate the effectiveness of implemented strategies, ensuring that decisions are driven by hard data.
In summary, the Lean Canvas is a very powerful tool in the Lean methodology, as it allows for risk reduction, optimization of resources, and ensuring rapid adaptation to market dynamics, maximizing the likelihood of success for startups and new entrepreneurial projects.
The integration of the Lean Canvas into the Lean methodology highlights the importance of a rapid, iterative approach to validating business assumptions, an aspect that clearly distinguishes it from the Business Model Canvas.
Differences between Business Model Canvas and Lean Model Canvas
Both the Business Model Canvas and the Lean Canvas are well-known tools for designing and validating business models. However, they have some key differences that make them suitable for different purposes.
In terms of focus, the Business Model Canvas takes a broader view of the company, encompassing all aspects of its business and how it creates, delivers, and captures value, while the Lean Canvas focuses on validating key business assumptions, particularly for startups and initiatives with high uncertainty.
Relative to complexity, however, the Business Model Canvas is more complex, with nine interconnected elements that require a deeper understanding of business models, while the Lean Canvas is simpler, with nine key blocks focused on validating key assumptions with a customer-centric approach.
In general, both the Business Model Canvas and the Lean Canvas can be valuable tools for entrepreneurs and companies wishing to develop successful models. However, if you have a well-defined concept and want to map out the entire business model, the BMC may be a better choice; however, if you are in the early stages of developing your idea and need to validate assumptions quickly, the Lean Canvas is a good option.
