Lean Canvas (2/2)
In the previous lesson, we saw why we should use the Lean Canvas instead of a typical Business Plan, and how to complete the first and most important parts of the Canvas: customer segment, problem, and value proposition.
A common pitfall is to list too many features or to list 3 but implement 10. So, list only the very core features.
– Keep It Simple Stupid! (KISS)
– Less is More
The solution that you should implement each iteration is call the minimum viable product (MVP). It is a product with just enough features to gather validated learning about the product and its continued development.
One seeks to minimize the total time spent on an iteration. The process is iterated until a desirable product/market fit is obtained, or until the product is deemed non-viable.
1. Make a list of 1st degree contacts
2. Ask for introductions
3. Email list from teaser page
4. Blog readers
5. Facebook, LinkedIn, Twitter
6. Adwords, Facebook Ads
7. Cold Call/Email
8. Sponsor group/events
At the same time, try to identify where the scalable channels come from and start some tests with a limited budget.
1. Content Marketing
2. Advertising (online/offline)
3. Sales Force
1. Outline your fixed costs
2. What are the variable costs? What is the Customer Acquisition Cost (CAC) ?
3. What is the Customer Lifetime Value (CLV or LTV)?
1) How do you build enough runway (number of months before you run out of cash)
2) What is your break-even point? How many customers do you need to break even?
Techniques to assess your price:
1) Cost-based pricing
2) Value-based pricing
We recommend value-based pricing, because customers hire your product to get a job done. They will naturally compare against the existing alternatives, not what it costs you to deliver your solution.
Identify the customer actions that drive value to your product. For example, for Youtube, a good metric could be the number of videos uploaded.
1. Insider information
2. Personal authority
3. A dream team
4. Existing customers
5. The “right” celebrity/expert endorsement
6. Large network effects
8. Organic Search Ranking (SEO)
Being the first mover is generally not an advantage: Apple, Toyota, Ford, Google, and Facebook weren’t first. They were “fast followers” that benefitted from a mature market.
Aim for a strong competitive advantage and establish a barrier to entry for competitors.