Lean Canvas explains how to capture your business model in 20 minutes. We’ll explain the first part in this course.
Introduction
– this doesn’t really improve the chances of success
– no business plan survives the first contact with customers
– the perfect plan is a mythStudies have shown that 66% of successful companies drastically changed their initial plans.
https://www.thebusinessplanshop.com/blog/en/entry/business_model_vs_business_planIf you’d like to refer to this later, you can find the link in the Additional Material section.
The goal of every startup is to find a plan that works before running out or resources. The way to do that is empirical testing.
Time is the scarcest resource. Avoid the “analysis-paralysis” trap! 20 minutes are enough for a business canvas, perfection is not the goal.
The Business Model Canvas is a highly visual strategic management and lean startup template for developing a new business or documenting an existing one, created by Alexander Osterwalder.
Watch this 2-minute video to learn more:
If you’d like to watch this video later, you can find the link in the Additional Material section.
Lean Canvas is an adaptation of the Business Model Canvas that Ash Maurya created in the Lean Startup spirit (Fast, Concise and Effective startup). Lean Canvas promises an actionable and entrepreneur-focused business plan. It focuses on problems, solutions, key metrics and competitive advantages.
Both Lean Canvas and Business Model Canvas are very popular. In this class, we will be using the Lean Canvas as we find it more entrepreneur-focused.
CloudFire was a photo and video sharing service founded by Ash Maurya.
Really broad category: anyone who share lots of photos and videos.
More specific segments:
1. Photographers
2. Videographers
3. Graphic Designers
4. Architects
5. Doctors
6. Parents
7. ConsumersSince Ash Maurya recently became a father, he selected Parents as his customer segment since he had a better idea of the pains and problems faced by that particular segment.
In our case, let’s say: parents with young kids.
Important: Distinguish between customers and users. If your business is an advertising service like Facebook or Google Search where users and paying customers are different people, use a single canvas for both of them using, colors for each segment.
How big are those problems? What are the alternatives – how do people manage with those problems today?
The value proposition is a single short sentence aimed at getting attention and making your potential customer want to buy your product.
This is the hardest thing to get right, but also the most critical one. Exercise! Iterate! Conduct landing page A/B testing! (if you don’t know what A/B testing is, don’t worry, we’ll explain it later).
2. Get your dream job in 30 days.
3. No more numbers, but actionable metrics.For our CloudFire previous example, it could be: “Share your entire photo and video library in under 5 minutes”
4 Rules of a Value Proposition
#1 Craft your Unique Value Proposition around your single main problem and finished story benefit
#2 Don’t make a promise you can’t keep. Long-term success will depend on how you deliver on your value proposition
#3 Be specific
#4 Create a high-concept pitch
A high concept pitch should be overly simplistic, no more than 6 words and use something (other company name, common object) that everybody knows.
Example of high concept pitch for LinkedIn: “Facebook for business”.
Always aim to deliver slightly above expectations:
– if you overpromise and underdeliver, you won’t be able to build a brand
– if you completely underpromise and overdeliver without a viral marketing strategy, only your current customers will be very excited and you will have difficulties finding new ones
– slightly overdelivering on your value proposition allows you to keep your promise attractive
https://www.linkedin.com/pulse/its-time-fire-business-plan-good-ash-mauryaIf you’d like to refer to this later, you can find the link in the Additional Material section.