- Product Management
Lean Canvas Examples of Multi-Billion Startups
Google’s story began with two guys spending hours in a garage trying to build the right thing. Another couple of friends – the future Airbnb founders – were short on cash and looking for a way to earn some.
Facebook, Youtube, Amazon can all boast similar bootstrapping origins. In modern terminology, they are lean startups that turned unicorns. These products have passed through the stage of a minimum viable product and managed to get over one billion US dollars of valuation.
The lean methodology, known for the introduction of different product management tools like lean canvas* example, became popular after these mentioned giants were already well on their way to success. And, it’s most likely that their stories formed the backbone of this advanced mindset.
The rise of the lean startup
To some extent, the lean startup methodology was born from the ashes of the dot-com crash at the turn of the century. The irrational exuberance as Alan Greenspan named it led to the explosion of IPO prices and subsequent growth of trading prices. Around the turn of the millennium, the frenzy phase was replaced by the burning up phase during which the dot-com companies began to run out of cash rapidly. As a result, many of them went bankrupt, and the aftermath affected various supporting industries like advertising. The bubble burst and caused a nuclear winter for startup capital – angel and venture capital investments almost disappeared.
There emerged a need for an advanced methodology that would allow entrepreneurs to survive in the age of risk capital deficit. The former approach of “build first and wait for customers” had outlived its usefulness. Now, startup founders had to adapt to a new concept, based on the principle “build what customers want” and, most importantly thing, don’t rack up large costs for early changes in the pipeline.
The lean startup was a breath of fresh air. Though the name of this innovative approach was eternalized by Eric Ries in his book of the same name, he was not the only trailblazer. Steve Blank, Ian MacMillan, and others contributed to the invention of a new language that modern startups can speak.
Lean is an agile development methodology , where you need to shape a hypothesis about your product/business first and then validate it with customers in service. For example, you build a minimum viable product, an iterative prototype of the would-be functional solution, and make it available for real customers to get their feedback. If it’s negative, you have not failed. You can pivot and correct the course of your idea, or change the business model. At the same time, the methodology provides numerous tools for effective strategic management, in which canvases play a significant role.
What is a lean canvas?
Ash Maurya’s brainchild, lean canvas, is a revamped business model canvas** , which allows you to investigate business vistas using the problem-solution approach. This improved canvas was perfect for startups. It dovetails nicely with the lean methodology and lets you understand your customers’ needs, focus on actionable metrics and deliver a rapid idea-to-product transformation. If you are curious about its practical use, check this video explaining how to work with the tool through the example of Uber.
Today, the lean canvas template is in high demand among entrepreneurs. One of Learnmetrics founders have called it “a brilliant tool”, and the Brunch & Budgets CEO Pamela Capalad emphasises its improved usability compared to a multi page business plan. And what would Jeff Bezos or Steve Chen have said about the canvas if they could use it back in their bootstrapping days? That’s our goal in this article – to imagine lean startup canvas example for former unicorn startups that now are globally-known brands. Let’s give it a go!
Five multi-billion startups and their lean canvas examples
We went with two fundamental requirements when choosing the companies to build a lean business model canvas for. First, we picked unicorn startups. Second, we picked the companies founded before The Lean Startup’s first release in 2011.
We also decided to take a look at two different types of startup companies : invention- and money-driven. For example, the founders of Facebook , YouTube, and Google initially did not focus on making money. They were just having fun in by inventing solutions or technologies to make human life better. Amazon and Airbnb, on the other hand, were originally profit-oriented startups. Their founders set money as the primary goal of their endeavors.
Let’s now try to walk in the founders’ shoes and fill in the blank lean canvas! How about we start with Google?
- Year of foundation: 1998
- Venue: Menlo Park, CA
- Original name: Googol
- Founded by: Larry Page and Sergey Brin
- Total funding amount: $36.1 million (last funding in 2000)
- IPO: raised $1.7 billion in 2004
In terms of popularity and global adoption, Google is an undisputed number one company. What originated as an advanced web search engine has grown into a multinational giant that specializes in online advertising, cloud computing, hard and soft products, and many others. It’s hard to believe, but Google’s bootstrapping began in a garage, where two Montessori minds implemented their knowledge obtained in the Stanford University more than 20 years ago.
Sergey Brin and Larry Page saw gaps in Excite or Yahoo – search tools of those days and strived to improve upon their idea – to create a reliable, comprehensive and speedy search engine. The synergy of their collaboration resulted in the PageRank algorithm, which was based on the Page’s project nicknamed BackRub. According to modern realia, PageRank was the startup’s unfair advantage. Google’s founders made attempts to sell the technology to their potential competitors but failed. So, they changed the direction towards developing their research project into the lean startup. Fortunately, the co-founder of Sun Microsystems, Andy Bechtolsheim, saw some potential in their work and invested $100K. In 2018, the market value of Google exceeded $700 billion.
Now, let’s take a look at the Google lean canvas Brin and Page would likely have tailored twenty years ago.
- Year of foundation: 2004
- Venue: Cambridge, MA
- Original name: Thefacebook
- Founded by: Mark Zuckerberg, Dustin Moskovitz, Eduardo Saverin, Andrew McCollum, and Chris Hughes
- Total funding amount: $2.3 billion (last funding in 2012)
- IPO: raised $18.4 billion in 2012
Facebook is one of the projects that came out after the burst of the dot.com bubble. The story of the most famous social network began not in a garage but in the Harvard dormitory, where Mark Zuckerberg and company worked on a student directory featuring photos and basic information. The first fruit of their collaboration was Facemash, a website allowing students to rank each other’s photos. However, this early version didn’t catch on.
Thefacebook, the original version of the product we know today, was the result of the good and bad lessons of Facemash. The first investments in the startup amounted to $2K – $1K each by Saverin and Zuckerberg. The website coverage gradually expanded beyond the borders of Harvard to the universities of the USA and Canada. Thefacebook dropped “the” from its name in August 2005 and became an open social network.
If Zuckerberg and Saverin had wanted to make a Facebook lean canvas at the outset, it might have looked like this:
- Year of foundation: 2005
- Venue: San Mateo, CA
- Founded by: Jawed Karim, Steve Chen, and Chad Hurley
- Total funding amount: $11.5 million (last funding in 2006)
- Acquired by Google for $1.7 billion in 2006
Meet another brainchild of post irrational exuberance. The founders of YouTube didn’t get their start in a garage or dormitory. They chose an apartment above a pizzeria, and that’s the place where the world’s largest video hosting service was born. The Internet users of that time had had no YouTube alternatives since ShareYourWorld, the first video hosting website, which closed in 2001, and Vimeo had just started on its way (it was founded three months before the activation of the domain name “youtube.com”). Eventually, Jawed, Steve and Chad, former PayPal employees, driven by the idea to create a video version of online dating service Hot or Not, decided to refocus their efforts on developing a video hosting startup.
Since the nuclear winter for startup capital hade come to an end, the promising project was not short of money. Sequoia Capital was the initial investor, which put in $3.5 million ten months after the domain name was activated. In 2006, YouTube was purchased by Google for a whopping $1.65 billion.
The YouTube lean canvas would reflect the following problems and solutions as of 2005.
- Year of foundation: 1994
- Venue: Bellevue, Washington, D.C.
- Original name: Calabra
- Founded by: Jeff Bezos
- Total funding amount: $108 million ($8 million of funding before IPO)
- IPO: raised $54 million in 1997
Today, the startup named after the second longest river on the globe is known for a plethora of activities including e-commerce, cloud computing, and even artificial intelligence. Well, almost twenty five-years ago it was just an online bookstore that dared traditional book stores. However, yet at that time Jeff Bezos already wanted to build “an everything store”.
Amazon was founded right in the middle of the dot.com bubble and was lucky to survive the following crash. Its story began in a garage, and the initial startup capital consisted of the personal savings of Bezos’ parents. At this period, web usage was growing at lightning speed, and most entrepreneurs wanted to ride the Internet wave. Jeff was considering twenty products that he could potentially sell online. However, books won due to their universal demand and low cost.
This is how the Amazon lean canvas would have looked back in 1994.
- Year of foundation: 2008
- Venue: San Francisco, CA
- Original name: AirBed & Breakfast
- Founded by: Brian Chesky, Joe Gebbia, Nathan Blecharczyk
- Total funding amount: $4.4 billion (last funding in 2018)
Though the core principles of the lean startup methodology were introduced by Eric Ries three years after Airbnb’s foundation, this project had already followed them. Everything began with the simple need to make money because Brian Chesky and Joe Gebbia fell short on cash to pay their rent. The solution was inspired by circumstance – all hotels were overbooked just before some local conference. That’s how the AirBed & Breakfast website came out in 2007. The guys lodged three guests on air mattresses and treated them with breakfast for $80 per each per night. In modern terms, they released a minimum viable product to validate their idea.
After that, the Airbnb team grew (Nathan Blecharczyk joined them), survived several unlucky releases and failed to attract any of the 15 angel investors they contacted. The trio sought out other ways to nurture their pet project including the sale of cereals (that allowed them to earn $30K). Another $20K was funded by the prestigious startup accelerator Y Combinator. As soon the startup name turned from Air Bed & Breakfast into simple Airbnb, it got its first significant investment: Sequoia Capital (YouTube’s first investor) seeded $600K one month later (April 2009). In 2018, the market value of the company reached $38 billion, and they might make an IPO this year.
Let’s have a look at a possible Airbnb lean canvas.
The examples above are only our vision of how those startups could have leveraged the lean canvas framework. Do you think it looks like something the founders of those startups would’ve done?
At Railsware we also take advantage of lean canvas for both our clients’ projects such as Calendly and our own products like Smart Checklist for Jira .
Why lean canvas? It combines simplicity and power in one go. This tool poses rather simple but essential questions. Some product owners skip answering them at the outset, which is not the right way to do things. Railsware believes all the questions to be faced in the future like ‘how to promote a product?’, ‘what monetization approach to select?’ and so on must be answered at the early stages.
What Railsware uses for product development instead of lean canvas
The lean startup methodology plays a significant role in how we approach product development. And we are glad to share a piece of our craft.
The foundation stone of our pipeline is the Inception based on our framework BRIDGeS . It’s a discovery session at which we attempt to collect and analyze the product context using a set of descriptors. The session also includes a number of activities aimed at crafting an optimal solution and a constructive roadmap of a project . All these activities make a well-described flow that is easy to follow. So far, we use this approach for all products we work on.
Use Lean Canvas or BRIDGeS for your product!
In this article, we tried to show that the concept of the lean startup had been bearing fruit even before it was defined and put in writing. The brilliant minds who founded Google, Facebook and other prominent companies were led by a gut feeling that brought them to success. And the fact that we applied the lean business model canvas* example for each startup case is just an attempt to reveal the power of this product management tool. We do encourage you to use it or our BRIDGeS framework and benefit from them, as well as other progressive solutions in your product development efforts. Perhaps, your project will also join the above mentioned cohort of unicorn startups in the future!
* Lean Canvas was designed by Ash Maurya, based on the Business Model Canvas designed by Alex Osterwalder, Strategyzer.com , licensed under CC BY SA 3.0.
** Business Model Canvas is designed by Alex Osterwalder, Strategyzer.com , licensed under CC BY SA 3.0.
*** Value Proposition Canvas is designed by Alex Osterwalder, Strategyzer.com .
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Lean Canvas is used by over a million people that span startups, universities, and large enterprises.
What is a Lean Canvas?
Lean Canvas is a 1-page business plan template created by Ash Maurya that helps you deconstruct your idea into its key assumptions. It is adapted from Alex Osterwalder's Business Model Canvas and optimized for Lean Startups. It replaces elaborate business plans with a single page business model.
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5 Lean Canvas Examples of Multi-Billion Startups [Template Inside]
Every business idea does need a plan. The plan that will help entrepreneurs avoid obstacles on their startup journey, mitigate risks and make sure their company will stand the competition. But how? Writing a multi-page business plan might appear to be quite a resource-consuming activity. You’ll need to go into detail and plan each step to convince investors to give you funds.
Luckily, modern entrepreneurs are equipped with more efficient methods and tools that make planning easier. A well-thought-out business scheme like a lean canvas model may serve as a visual representation of your business plan, which you will pitch to investors.
Only by knowing exactly what results you want to achieve, you can reap the benefits. Steve Jobs, Mark Zuckerberg, and other notable entrepreneurs met many business challenges on their path to success. But, eventually, they managed to reach their goal and became world-known market leaders in their industries thanks to effective planning.
Read our article to know what the lean canvas model is, how it can be applied to five unicorn companies such as Facebook, Google, Tesla, Apple, and Skype and discover how you can use it to benefit your business!
- What is Lean Canvas Model?
Business Model Canvas vs. Lean Canvas
5 multi-billion companies and lean canvas model examples, key benefits of the lean canvas model, a recap: should you use a lean canvas model, what is a lean canvas model.
The lean canvas model is a strategic management tool that promises to provide entrepreneurs with actionable documentation on how to implement their idea on the market. Created by Ash Maurya, this concept has quickly gained traction due to its simplicity and flexibility.
So, why is the lean startup model so popular?
The answer is that up-and-coming entrepreneurs can simply release their products on the market. They only need to follow these three fundamental principles in the lean canvas model – find, execute, and validate.
And voilà — you are equipped with an awesome plan to make your business idea come alive ready to be presented to angels!
A well-planned business strategy is what all entrepreneurs should have to jumpstart their ventures, stay ahead of market competition, and generate revenue. The universal golden standard doesn’t exist either for enterprises or startups. Thus, experimentation and ability to learn from mistakes are the core skills of every young company.
Both business and lean canvas models use the above-mentioned tactics.
If you are about to start your own business and doubt which tool will make the best match for you, we outlined the core differences between the two models.
- Model orientation .
The lean canvas model focuses on finding the surefire solutions to marketing problems through learning from mistakes. Instead, the business canvas model is designed for all companies aiming at verifying marketing hypotheses on the market.
- Marketing Approaches
The business model canvas focuses on customer segmentation and aims to explore how to build trustworthy relationships with clients. Conversely, the lean canvas model applies a different approach. It’d rather focus on testing a product idea.
- Unique Value Proposition
All entrepreneurs, whether they are experienced startuppers or they’ve just founded their first company, strive to deliver value to customers.They find it by making many mistakes and testing various ideas with different audiences. The business model canvas doesn’t join this bumpy road. Business executives know about their product value and seek to find effective communication channels to reach their customers.
If you’re curious to find out how a unique value proposition is created, have a look at IT outsourcing case studies built by LITSLINK’s seasoned software engineers.
Not so many startups are lucky enough to be on the rise. Most of them do fail. The main problem is that they lack successful product ideas, which could capture the clients’ attention. The lack of market research, poor understanding of the customers’ needs and inability to customize the product are just a few of the reasons why most startups fail. In this case, the lean canvas model might help startups to spot inefficiencies, predict risks and highlight their strong points.
Since the best way to learn is to learn from others’ mistakes and achievements, in this article, we decided to look at 5 top companies and discover how they paved the way to worldwide success with the help of the lean canvas philosophy.
1. Facebook
Founded : 2004
Created by: Mark Zuckerberg
Country: USA, Cambridge, Massachusetts.
Total Funding: $104 billion (Valuation at IPO)
The story of creating this famous social media network started in the dormitory of Harvard University. Mark Zuckerberg, a sophomore student at that time, was working on the product that would allow students to share visual content with their friends online.
As Facebook’s founder explained in one of his interviews he just wanted to solve the students’ problem – have a common place for online communication. Despite many useless efforts, Mark Zuckerberg nailed it!
If we could apply the lean canvas model to Facebook, it would look like this at the outset of startup’s journey:
Founded : 1998
Created by : Sergey Brin & Larry Page
Country : USA, Menlo Park, California
Total Funding : $23.1 billion (Valuation at IPO)
Not only Harvard students could generate innovative ideas, but Stanford University enthusiasts jumped on this bandwagon as well. Larry Page and Sergey Brin were two graduates from the computer science faculty, who created a PageRank algorithm for a newly developed search engine – BackRub, which was the first name of Google. With the help of this technology, users could find relevant content at a high speed. And it was the main competitive advantage of Page and Larry’s product over other popular search engines like Yahoo and Excite.
How could Google use the lean canvas model during the initial startup development phase? Let’s have a look at the chart below:
Founded : 1976
Created by : Steve Jobs & Steve Wozniak
Country : USA, Cupertino, California
Total Funding : $6,2 billion
Portable and user-friendly computers didn’t exist in the 1970s. This idea came to the minds of Steve Jobs and Steve Wozniak in 1976. At that time, they made an important decision to leave college and establish the company they were so passionate about. Changing the way people use computers was the idea that inspired them to reach new heights. Worked in Steve Jobs’ garage, they created Apple I, and then – Apple II, which intended to revolutionize the industry with color graphics.
Almost several years thereafter, Apple Inc. became one of the most profitable companies on the US market.
So, let’s review of how could Apple use the lean canvas example at the very beginning of its success journey:
Founded : 2003
Created by : Martin Eberhard & Marc Tarpenning
Country : USA
Total Funding : $19.9 billion
The two US entrepreneurs, Martin Eberhard and Marc Tarpenning, picked up the idea of inventing electric cars in 2003 when an automotive giant – General Motors – failed with its electric vehicle – EV1.
The foundation story of Tesla doesn’t resemble the startup path of Google, Facebook, and Apple. The newly emerged company, named on behalf of a famous Serbian inventor, Nikola Tesla, strived to push the idea of electric cars on the market. In 2004, Martin Eberhard and Marc Tarpenning searched for venture capital funding and got in touch with Elon Musk, a PayPal’s co-founder. He invested $6,5 million in the first investment round and joined the board of directors in Tesla.
Let’s imagine that Tesla decided to use the lean business canvas model. So, how will it look? Below, there is a graph, showing a Tesla’s jumpstart:
Created by : Niklas Zennstrom & Janus Friis (founders)
Country : Estonia, Sweden
Total Funding : $76.8 million
Skype was founded by two entrepreneurs – Niklas Zennstrom and Janus Friis in 2003. Inspired by the idea of free Internet voice calls, new software became a mere nightmare for phone companies. Since wireless networks gathered momentum in the early 2000s, a traditional phone service could be replaced by products like Skype.
The product was created by Estonian developers Priit Kasesalu, Ahti Heinla, and Jaan Tallinn, who worked on Kazaa, a file-sharing app. The first versions of Skype were available on several operating systems like Linux, Windows, and MacOS.
How could the lean canvas model be incorporated into Skype? Take a closer look at the graph here:
The lean canvas model creates the main cornerstone of your business on a one-page template. Improved problem solving and better planning are only a few benefits this method offers to startups.
So, let’s examine what advantages the lean canvas model has.
Benefit 1: Greater Flexibility
Traditional business models do require much time. The thorough market and competitor’s research, financial analysis and other activities take much time and resources. And what is even worse is that you can’t make any changes here. The lean canvas model doesn’t have a precise framework for your business development. It provides a kind of a wireframe which you can adjust to your business. It’s possible to test your idea multiple times and make as many changes as you want.
Benefit 2: Focus on a Problem
By understanding your clients’ needs and pain points, you’ll conquer the market at one go. The lean canvas model helps you to develop a unique selling proposition, stand out from the crowd and outpace your competitors.
Benefit 3: Viable Result Metrics
Analyzing the results of your hard work is one of the keys to building a prosperous company.. So, viable result metrics will help you with this task. Lean canvas model equips you with the tools to monitor your buyers’ behavior and the way they interact with your products and services.
We provided you with an overview of the lean canvas model and outlined the key benefits of this methodology. Also, we draw you 5 lean canvas examples of multi-billion companies with detailed graphs and figures.
It’s always up to you what goals to set and how to develop your business. By deciding to apply the lean canvas model, you get a time-saving approach to planning and strategizing that will provide you with lots of insights and benefits.
Thus, if you’ve been wondering whether you should use a lean canvas model, our answer is: ‘Yes, you should’. And what could be more important in your business than having a reliable technical partner? By reaching out to LITSLINK, a top software development company , you get a chance to implement your boldest ideas with high-quality software development services.
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Home Blog 10 Lean Canvas Examples or How to Create Business Plan for Startup
10 Lean Canvas Examples or How to Create Business Plan for Startup
Unique value
Unfair advantage, customer segments, existing alternatives, key metrics, high-level concept, early adopters, cost structure, revenue streams, the ability to be closer to your customer, you can run on low marketing sales, you have more time to take a specific market niche, more efficient innovation and flexibility, the lean startup | eric ries, running lean | ash maurya, the four steps to the epiphany | steve blank, wrapping up.
All businesses start with a business plan.
But what comes into your mind when you hear this word? Probably, a large document with complex numbers and 100+ pages of text.
Actually, this means thorough preparation, which is never too bad.
But, in reality, business plans never work perfectly. So why waste so much time on it.
In the modern dynamic world, you should be quick or be dead. There’s no time for lengthy business plans.
It’s only about your ability to be as flexible as possible in order to adapt and prevail.
Imagine two competitive tech founders aiming to take the same market niche.
The first one aims to take the vacant place as fast as possible and sets flexibility as his top priority.
The second founder thoroughly analyzes all market entry aspects and prepares a detailed business model plan.
As a result, it is perfectly prepared for taking the target niche, but…
…it’s already too late because this niche is taken by the first organization.
So, don’t act like a founder of the second business. Focus on being flexible instead.
That’s when the lean canvas approach comes into action.
We at Softformance start our cooperation with each client with a workshop that helps us come up with the most flexible approach.
Lean startup and its deviations are among our favorites.
What does this concept mean? And how can it help your emerging tech idea?
Read this article to get your answers.
Here I provide a comprehensive overview of the lean canvas methodology and support it with the greatest lean canvas examples of successful companies.
If you read and follow this article’s guidelines, you’ll have a business plan in 20 minutes and your odds for success will grow 20 times.
What is a lean canvas?
Before we dive into the promised success stories, let’s clarify what a lean startup actually is.
Basically, this term derives from the lean startup methodology that was developed in 2011 by Eric Reis in his book The Lean Startup .
And the key point about the latter is flexibility. Lean startup companies should be extremely flexible while launching their product and business.
There may be various deviations of a lean startup, but it’s always about taking the product development cycle as short as possible.
Actually, there’s nothing new about such a strategy.
To some extent, it is as old as time. Even a cook that creates a new dish and doesn’t clearly understand what reaction to expect from the audience follows this approach.
You may see a visualization for the core lean startup principles in the image below.
As for a lean canvas, it is the way to visualize the basics of the lean startup approach. It goes about a table that includes all key considerations concerning lean startup principles.
You may see a blank lean canvas below.
Let’s also clarify what each block in this table means.
If the market fails to satisfy people with some services or offers, it is a problem. In a lean startup, a problem means an opportunity.
In other words, it is a specific demand gap or market niche that you aim to take with your product.
It goes about your product created for solving the problem and filling the market gap.
It is a unique selling point that a startup can offer its clients. It is something that helps your startup stand out from the competition.
It is a specific advantage of your solution or business model that cannot be replicated by your competitors.
Basically, it goes about the essential segments of the target market.
This subsection is about the competitors who provide the same or similar to your startup solutions.
It goes about specific measures that help you understand whether your business is successful.
In other words, these are specific results of numbers that help you evaluate the overall efficiency of your strategy.
The high-level concept lean canvas part is about how you envision your idea on the highest level. In other words: what do you want your startup to become and how do you want people to perceive it.
These are the ways you use for promoting and improving your product. It goes about the way you choose to communicate with your audience.
These are the basic users of your product. Usually, it goes about people who interact with the earliest version of your product and provide you with much-needed feedback.
Basically, it goes about costs that the business occurs through its operations. These are expenses on its key operations and practices.
These are lean startup strategies that your business uses to generate revenues from each customer segment.
There’s no specified order for all these blocks.
As the key feature of this approach is flexibility, you’re free to experiment.
I, personally, prefer going from problem to solution, but you may thrive with another approach.
Everything depends on your needs, and if you feel unsure about the way you should approach the development of your startup idea, don’t hesitate to contact us for a relevant piece of advice.
Why do we need Lean Canvas?
From my experience, I may say that rapid discovery of new demands and business models, as well as continuous experimentation, are the pillars of the lean startup strategy.
Anyway, in the diversity of its variations, a lean canvas brings software founders a great number of benefits.
These are:
A lean canvas motivates you to keep in contact with your customer. After all, user feedback is the best way for you to determine further development directions.
So, if you’re building something like a campground booking app, communication with clients helps you to determine its main issues and ways of adapting its functionality to the clients’ needs.
If you’re launching something like a photostock web portal , you may start with testing its basic functionality as an MVP app. In this case, you should collect general user feedback, so there’s no need to introduce your early product version to the general audience.
Can you feel it? This meets cutting marketing costs, at least during the earliest stages.
So, if you run your marketing at a shoestring budget, the lean canvas model is a great solution.
While using the lean startup approach, you may start with a general market domain.
For example, you launch a fintech app that works with various documents.
As you go further with your project, you see that there’s a great demand for invoice analysis software .
As a result, you recognize this niche and adapt your product to it down the road.
So, after starting with a generic fintech app idea, you end up with a highly-demanded AI-powered tool for invoice analysis.
One more time, let’s return to the question of flexibility.
As you are free to adapt your product to market demands down the road, you are free to foster innovation.
For example, you create a SaaS for hospital management with some basic functionality.
Down the road, you see that there’s an emerging trend for building AI-powered assistants for medical software.
As you have not yet developed your final product, you are free to adapt it to the trends and add the above-mentioned assistant.
The result is simple: you come out with a more innovative version of your app.
Now that you know what is a lean canvas and why it works perfectly for software products tools and apps, we’re finally ready to learn from some great lean canvas examples out there:
10 examples of software businesses that have relied on a lean canvas
In the list below you’ll find some popular industry examples as well as a few of our own client projects where we did workshops along with the lean canvas process:
One of the world’s greatest digital businesses has achieved remarkable success, largely, because of some quality implementation of a lean canvas.
Back then, in 1998, the world of Internet search tools was dominated by Excite and Yahoo.
However, two ambitious entrepreneurs, namely Sergey Brin and Larry Page, saw the gaps in these technologies.
They decided to build their own search engine that will prevail over the worldwide web.
Flexibility and experiments became the core values allowing them to achieve eventual success.
This is what a lean canvas online for Google would look like.
Problem:
Existing search engines provided irrelevant results to the users of the Internet due to non-flexible algorithms.
Solution:
A technology that understands content connections and context, which allows it to provide more precise search results.
Unique value:
- Much faster search;
- users can truly find the content they’re searching for.
Unfair advantage:
Google CitationRanking technology is a completely unique citation ranking tool owned by Google.
Customer segments:
Any web users.
Main competitors:
Yahoo, AltaVista, Excite.
Key metrics:
- The number of search results provided by a search engine.
- How many users end their search on the first page.
High-level concept:
Fast web search that is, finally, convenient to the user.
Channels:
- Feedback was collected from early users and implemented with attention to the smallest detail.
- Word of mouth.
- Cooperation with websites.
Early adopters:
Stanford University students.
Cost structure:
Hosting, development.
Revenue streams:
Advertising, investment.
One of the world’s most popular social media can also serve as a lean canvas example.
It started as a project of Harvard students. These guys created Facemash, a website allowing students to rank each other’s photos.
Eduardo Saverin and Mark Zuckerberg quickly recognized the potential of this idea.
They developed the concept of Facemash into Thefacebook, a rough yet very promising social media platform.
What came next was the development of this idea according to user needs.
Nowadays, Facebook originated from Thefacebook is a media giant with 2.9 billion active users.
If we consider Facebook to be one of the lean canvas examples, here’s how this model would look like:
Students needed a solution for fun and online communication.
Social media is where students can communicate, share files, connect with friends, and have fun with each other.
Unique value:
The only online communication platform oriented on Harvard students. Later, it expanded on the students of other colleges.
A brand new type of website – a unique student network with the most demanded social features developed by students.
Harvard students, students of other universities and colleges.
Existing alternatives:
There were literally no full-fledged competitors. The closest concepts were implemented by MySpace, Hi5, and Friendster.
Key metrics:
DAU/MAU, the North Star metric.
High-level concept:
A web platform that brings college students great socialization opportunities.
- Expanding the network by referring various college students.
- Collecting user feedback through the app and reviewing the key metrics to adapt the product to the needs of the audience.
Harvard university students.
Cost structure:
Hosting, development, payroll.
Investment, advertising revenue.
The world’s largest video hosting can also be viewed as one of the best lean business plan examples.
The founders of YouTube, namely Jawed Karim, Steve Chen, and Chad Hurley, developed their concept in a small flat above the pizzeria.
What had started in 2001 as an idea of a video hosting that would surpass its competitors by being closer to the audience, was acquired by Google for $1.7 billion in 2006.
Its founders focus on experiments and are ready to adjust their ideas to the market needs. These are important factors behind the eventual success of YouTube.
What does it mean in the context of this article? We may view YouTube as a decent lean startup example.
The lean canvas for this iconic website would probably look this way.
An evident lack of adequate video hosting websites on the Internet.
Creating a website where people will be able to upload and share their amateur videos.
- The ability to watch and share video content on a single platform.
- Star-based rating system.
- TV service where content is created and uploaded by ordinary people.
Unfair advantage:
- Most competitors were unable to recreate a video hosting of such size because of scalability issues.
- Users of the platform constantly attract new users to it because of various social elements of YouTube.
Customer segments:
Bloggers, advertisers, mass-market users.
Existing alternatives:
Google Video, Vimeo, ShareYourWorld.
A number of views per video, DAU, videos per session, the overall timing of watched videos, etc.
To launch a new Flickr, but for the world of videos.
- Expanding the network through referrals;
- Continuously collecting the user feedback and researching Internet trends;
- Promotion through technology magazines;
- Direct communication with clients through emails.
College students and teenagers, video enthusiasts, filmmakers.
Cost structure:
Hosting, development, payroll.
Advertising revenue, investment.
It is one of my favorite success stories on this list.
One of our clients came up with the idea of a social media platform for parents, where they can find courses and attractions for their kids, as well as share knowledge with other parents.
The customer was very much into a flexible approach, so we suggested them to go with a lean canvas.
As a result, KidiBoard, a unique parent-centered platform appeared.
Here is what the lean canvas for this project looks like.
- Hard to find activities for kids in small locations.
- Weak logistics/calendar management on the go (mobile).
- Hard to find trusted providers online.
A social media platform for parents that includes a calendar sync and locations not covered by competitors.
Combine a marketplace between parents and providers with a social network exclusively for parents. Parents get access to full and organized information they can trust and can easily manage childcare-related issues with a click of a button.
There are 5 founders, all of them are parents.
- TIM (busy professionals) moms and dads;
- Tech-savvy moms and dads;
- Mid-income moms and dads;
- Parents with 2-3+ kids.
Existing alternatives:
KidPass.com
Number of users, transactions, number of social interactions.
KidiBoard should become a TripAdvisor for parents.
- FB groups for parents in North New Jersey.
- Word of mouth.
- Parent references.
- Influencer marketing.
- Offline ads.
- Paid online ads.
Early adopters:
Parents from a limited area in New Jersey.
Customer acquisition cost, distribution costs, hosting, monthly support.
This is, by far, one of the most inspiring startup stories.
Back in 2008, three neighbors, namely Brian Chesky, Joe Gebbia, Nathan Blecharczyk, decided to earn some money by sharing spare space in their San Francisco accommodation with the guests of a popular conference hosted in this city.
In 10 years, it was already one of the world’s biggest tourist accommodation platforms with funding that exceeds $4.4 billion.
Airbnb is a perfect example of how flexibility and a creative approach helped transform a small idea into a giant of the online tourist market.
Most probably, the lean canvas for this startup would look the following way.
- It is very challenging to find cheap and affordable accommodation for tourists.
- Traditional hotels lack authenticity, so travelers may have issues with finding truly authentic accommodations in the countries to which they travel.
- People with some extra space or accommodations may not know how to monetize them.
- Home-sharing culture is far from being cultivated.
Solution:
A web service that allows travelers to find affordable accommodations, and helps homeowners to earn extra money by renting out their accommodations on a day-by-day basis.
- Travelers can get an authentic living experience at an affordable price.
- Homeowners can earn extra money by renting out their vacant areas.
- The option of renting out space is available to any homeowner.
- Flexible bi-directional rating system for both tourists and homeowners.
- Insurance by default by hosts.
- Travelers searching for affordable and authentic accommodations.
- People that are interested in renting out their extra space.
Booking.com, Hotels.com.
Key metrics:
Number of bookings, number of accommodation hosts on the platform, NPS, DAU/MAU.
An app that establishes a host-sharing economy.
Interaction with the audience, word of mouth, online ads, referrals.
People that are ready to share their residences and become hosts.
Development, hosting, payroll, marketing, insurance, photography.
Revenue streams:
Fees from travelers.
The world’s largest technology giant started in 1994 as a book-selling website built by Jeff Bezos.
Later on, the entrepreneur took many experiments and adapted to various market trends to develop his idea and grow his startup.
What we see now is a ponderous company involved in all tech spheres and e-commerce domains.
In 1997, the budget of this platform already reached $50 million.
This means that Bezos did everything right almost from the very start.
The lean canvas for his startup would probably look like this.
- Lack of online bookstores.
- People had issues with selecting books in traditional bookstores due to the lack of ratings and reviews.
An online bookstore with billions of titles.
An opportunity to buy books from home by using a PC.
- No premises and fewer employees, which means lower prices.
- No competitors in the domain of e-commerce.
- Book readers, book collectors.
Interloc (future Alibris), local booksellers, Barnes & Noble.
CAC, user traffic, website’s ROI.
The biggest bookstore in the world.
Affiliates, resellers.
- Book enthusiasts searching for rare books;
- Ordinary Internet users that are interested in online bookstores.
Website development, hosting, operational costs, payroll.
Direct sales.
It is one of the oldest picks on this list.
Apple started as a startup of ambitious technology enthusiasts, Steve Jobs and Stever Wozniak, in 1976.
These guys wanted to change the way people interact with computers and came through many experiments.
As a result, by the end of the 20th century, Apple became one of the global tech leaders, while in the 21st century, its dominant place in the technology domain is undoubted.
Surely, in 1976, nobody implemented a lean canvas methodology. However, we think that the lean canvas for Apple would look this way.
Computers were very inconvenient and far from being user-friendly.
A portable computer that provides an excellent user experience.
The portable computer of a new generation with good productivity and colorful design.
A clear strategy for further releases, such as Apple 2, and unique technical background of the startuppers.
Office workers, students.
IBM, Intel.
ROI, the number of loyal customers.
A personal computer of a new generation.
Advertising, continuous interaction with users, direct communication with business owners, word of mouth.
Business executives and office workers.
Production, payroll, development.
Public sales.
Tesla emerged in 2003 as a response to the failed attempt of General Motors, an automotive giant, to launch its electric vehicle EV1.
Two ambitious US entrepreneurs, Martin Eberhard and Marc Tarpenning, came up with the idea of an affordable electric vehicle.
What had emerged as an ambitious dream, soon became one of the world’s most well-known automotive brands.
In 2004, Eberhard and Tarpnenning started cooperating with one of the most ambitious modern entrepreneurs, namely Elon Musk.
Since that moment, Tesla has been experiencing unprecedented growth.
Its lean canvas model example would, most probably, look this way.
Problem:
The need to promote the idea of eco-friendly electric cars available to a broad audience.
Production of electric vehicles with resource-efficient performance.
Highly-efficient battery-electric cars.
Roadster, an electric vehicle developed by Tesla, became the first well-branded and recognized electric vehicle in the industry.
Ecology-aware drivers, sports car lovers.
EV1 by General Motors.
ROI, the number of buyers.
The world’s first high-performance electric vehicle in mass production.
Advertising, branding, interaction with potential buyers, retail stores, word of mouth.
Early adopters:
Eco-aware and wealthy car enthusiasts.
Car production, payroll.
Revenue stream:
Advertising, venture capital, direct product sales.
One of the world’s most popular video communication tools had also been only an ambitious startup one day.
In 2003, Niklas Zennstrom & Janus Friis got inspired by the idea of free Internet voice calls.
By 2006, they had already penetrated the market with their idea of a video calling platform.
Top-notch flexibility was the pillar of Skype’s success.
Hence, we can imagine one of the lean canvas examples for this startup.
A lack of user-friendly video calling software in the market.
A video calling platform with social media components and a live chat.
Unique selling point:
Cheap phone calls, free video calls.
Skype was the first platform to implement free video calls and establish a unique connection quality that left all the competitors behind.
Ordinary web users, teams of employees.
One of the world’s most popular social media with free video calls and instant text messaging.
Constant communication with users, online ads, referral bonuses, cooperation with companies using Skype as a professional communication tool.
Ordinary web users, representatives of professional working teams.
Development, payroll.
Revenue stream:
Acquisition, investment, paid phone calls, advertising.
It is one more success story we took part in.
Ziscuit is a unique grocery store that automatically provides you with the cheapest offers related to your desired products.
What started as one more grocery store, became a unique product with the lean startup strategy.
Ziscuit provides its users with a roadmap for savings, and the platform keeps on improving according to market demands.
I am proud of helping these guys to come up with a lean canvas example for their project.
And our team helped them implement their idea and launch a successful application that is demanded in the market.
Here are some basics of this canvas for Ziscuit.
- High prices for groceries.
- Social distancing makes grocery shopping less convenient.
- Buying groceries may be very time-consuming.
- Online app for remote shopping with bidding functions.
- A shopping app with scheduling and 100% matching functions.
- An app that provides the users with the most cost-efficient purchase suggestions.
A user can pick the cheapest groceries on the market with a single click.
Tech founders had many contacts and connections among store owners.
Millennials, couples, 4 people households, female baby boomers, males aged 24-60.
Walmart, small offline grocery stores.
Avg. ticket/transaction size, active customers, ROI, customer consistency.
An app that becomes a Priceline for groceries.
Social media (paid and organic ads), referrals, word of mouth, radio management service.
Millennials, female baby-boomers.
- Customer acquisition costs: projected from eBay (auction site), 1-2$/c., 7-10$/c.
- Distribution Costs: customer support (outsource).
- Subscriptions (like in the case of Amazon Prime).
- Pay-as-you-go, per-transaction fee.
- Ads from retailers.
- Cashflow emerging from the growing user base.
Best books on lean startup
The material in this article will be more than enough to put your software lean canvas quickly. But if you want to dive deeper into the topic, here we prepared for you further reading:
It is one of the most valuable business texts ever. In this work, Eric Ries defines his principles of the lean startup methodology.
This is where the concept that shapes today’s digital world begins.
The book is largely centered around the concept of a minimum viable product (MVP). It also cherishes the adventurous spirit of experiments in entrepreneurship.
A great source of both motivation and knowledge on how you should act if you want to embrace the unknown.
The author of this book , business expert Ash Maurya, certainly understands the key principles of the lean methodology.
And he willingly shares his insights with the reader. The author outlines strategies that will help you find your perfect market fit.
The book is supported with many useful examples of the author’s personal experience.
Besides, Ash Maurya advises you to test a variety of hypotheses and explore various customer segments.
All in all, Ash Maurya motivates you to never be afraid of experiments and go for the most ambitious goals.
To my mind, it is one of the most influential and practical business publications for startuppers ever.
It helps you define the differences between startups and existing businesses. The book also tells you about the core measures and principles of success in entrepreneurship.
Such questions as assumption testing, customer feedback and engagement, and speed product iteration are explored and discussed in detail in this book.
To summarize, the main purpose of a lean canvas is to let you identify who your customers are, what problems they have, and how you want to solve them.
We introduced lean canvas examples and process implications within our discovery workshop for our clients about 4 years ago. Since then, the success ratio of new startups has risen by almost 50%.
So I’d highly encourage you to build your own lean canvas before writing the first line of code with your developers.
And if you need some help with it, we have something special for you.
Apply for our unique startup workshop and let’s create your business plan together.
We cannot grant you the success of Google and Amazon, but be sure that our startup practices will help you develop a product that thrives in the market.
Want to join thousands of software entrepreneurs and tech founders?
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Jun 17, 2016
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An Introduction to Lean Canvas
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 work. Having the Lean Canvas as a visual guide made this part “communicating the…
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Lean Canvas (2023): How-to & Examples [+ Template]
Home » Lean Canvas | 🕑
Written by Gust de Backer
April 21, 2022.
The Lean Canvas is practical and focused on validating an idea, it ensures that you are not going to bring a service or product to market that no one is waiting for.
Do you want to bring your product or service to market more effectively?
I’m going to explain to you:
- What the Lean Canvas is
- Which components the Lean Canvas contains
- And how to fill out the Lean Canvas
Let’s get started…
Table of Contents
What is a Lean Canvas
The Lean Canvas originally comes from the Business Model Canvas , but is more problem and solution oriented :
This difference allows the Lean Canvas to be better used to validate a product or service.
The differences are:
Don’t feel like reading this blog? Check out this video:
Why use the Lean Canvas?
There are several reasons why you might want to use the Lean Canvas:
- It focuses on understanding the problem you are trying to solve, this allows you to better understand the customer.
- It includes a research-based approach , as it focuses on validating your assumptions.
- Contains key metrics to check that you are sailing the right course.
- You stay lean , because you focus on speed and traction of your idea.
- Faster time-to-market because the idea-to-product transition is smoother.
- The Lean Canvas also focuses on capturing a unique place in the market .
1. Customer Segments.
Not everyone needs your product, it is important to be as specific as possible in choosing your customer segment.
Without a clear customer segment it is also not possible to properly empathize with the customer segment’s problems.
Tip : check out the TAM SAM SOM article.
Early Adopters
The ‘Customer Segments’ section also contains a piece with the Early Adopters, or your most potential customers…
These are the people you are going to approach first to validate your assumptions.
Without a problem worth solving, you have no product or service. For each key customer segment, come up with one to three high priority problems.
Existing Alternatives
The ‘Problem’ section also contains a section with existing alternatives, this is meant to write down your competitors that solve the same problem.
Note, this does not necessarily mean your direct competitors, but really companies that focus on the same problem.
3. Unique Value Proposition
The Unique Value Proposition is your promise of the value you will deliver…
It is the main reason why a customer should buy from you. It also shows where you stand out and why a customer segment should invest time or money in you.
Tip : check out the Value Proposition Canvas .
High-Level Concept
In the High-Level Concept section, there is space to write down briefly and clearly what your product or service represents. This is how your team or customers name your company to their friends, for example as “The Uber for boats”.
4. Solution
You will not find the solution to your problem in your first attempt. The solution is also not in your office, you will find it with the customer. Get Out Of The Building , or in other words, engage with the customer and validate different solutions.
While creating the solution, don’t forget to use the Build – Measure – Learn cycle.
5. Channels
How will you reach your customer segment? In the beginning, it’s not important to look at scalability, but at gathering insights.
Think about what channels you can use to access your customer segment, see where your customers are and try to reach them there.
It is not necessary to be on location with the customer, a solution can also be validated with an MVP, for example. A good example of this is Zappos, a simple website with some shoes that people could order online.
Tip : check out Testing Business Ideas .
6. Revenue Streams
Revenue Streams depend on the revenue model and pricing strategy you choose.
For startups it is normal to lower the price or even offer certain things for free to get traction. Important here is to ensure that you can validate demand for your product or service, it is not very difficult to get people to sign up or do something if it is free.
7. Cost Structure
Write down how much it costs to keep your business running, what is your burn rate, how much does it cost monthly to run your business, how much does it cost to interview customer segments, how much does market research cost, etc.
Try to calculate a break-even point in doing so.
8. Key Metrics
Every business has certain metrics that provide insight into how it is performing. A good way to map the health of your business is the Pirate Funnel Canvas .
It is not always about the part that goes towards the customer, because if you depend on staff, for example NPS can also be a very important metric for your business.
Tip : also check out the Growth Flywheel / Growth Formula .
9. Unfair Advantage
The Unfair Advantage is about a specific part of your company, product or service that your competitors can’t just get or copy.
This could be exclusive access to data, a community, authority, experience or perhaps a particular feature.
How do you complete the Lean Canvas?
First, download the Lean Canvas:
Good choice! Check your e-mail for the resources...
Make sure you have a team with whom you can start completing and validating the Lean Canvas. Optionally, you can do this alone, but it is interesting to be able to discuss findings with someone.
Starting with the problem, make sure you find the problem and validate that the customer segment: – Is bothered by the problem – Is actively looking for a solution or has even already realized a self-created solution – Would possibly be willing to pay money to solve the problem
Create different solutions in perhaps different iterations and test them with the customer segment to validate whether the solution actually solves the problem found.
Start by filling in the canvas with assumptions and as you go, make sure to refill the canvas with validated assumptions.
Once you have a validated Lean Canvas, you can start to professionalize your business and optimize the canvas to, for example, create a scalable sales funnel, be more profitable, or approach a larger customer segment.
Lean Canvas example
Watch the video at the top of this article for a clear example. Here is a visual example from Uber:
Now it’s your turn…
I’m curious… How far along are you with your business or startup and what are you still running into?
Let me know in a comment!
P.S. would you like some extra help? Let me know at [email protected]
Frequently Asked Questions
The Lean Canvas allows you to put your entire concept on 1 a4 sheet to validate your assumptions. It is similar to the Business Model Canvas, but is more problem and solution oriented.
The Lean Canvas gets you to focus more on your customer segment’s problem and to use a research-based method to validate your product or service, allowing you to get a faster time to market.
The Lean Canvas is ideally used to validate a new product, idea or service and research it with a problem-solving mindset.
The components in the Lean Canvas are: 1. Customer Segments 2. Problem 3. Unique Value Proposition 4. Solution 5. Revenue Streams 6. Key Metrics 7. Channels 8. Cost Structure 9. Unfair Advantage
The Business Model Canvas is a strategic tool to identify the strengths and weaknesses of a company and is primarily aimed at existing companies that are focused on expanding their business. The Lean Canvas is a problem-solution approach to approaching a market focuses primarily on startups that focus on serving a customer segment and gaining an unfair advantage.
I try to help business surpass their growth ceiling with my content.
Sounds interesting?
Let’s connect on LinkedIn!
Business Model Canvas | Customer Development Process | Entrepreneurship | Lean Canvas | Marketing Management | Pricing Strategy | Problem-solution Fit | Product-market Fit | Revenue Model | TAM SAM SOM Model
Must-Reads 👇🏼
- TAM SAM SOM
- Value Proposition
- Brainstorming
- Decision Making Unit
- Lean Canvas
- Cognitive Biases
- Product-Market Fit
- Problem-Solution Fit
- North Star Metric
- Business Model Canvas
- Market Research
- Customer Development
- Pricing Strategies
- Growth Hacking
- Revenue Models
- Brand Identity
- Account-Based Marketing
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How To Create A Lean Canvas
Updated February 17, 2023 by Xtensio
The Lean Business Model is a great starter tool to present the heart of your business idea on a single page. From the problem to key metrics, the lean canvas tool asks vital questions to help you form a real business case for your grand vision. This guide will lead you through these sections as you launch your startup.
Xtensio is your team space for beautiful living documents . Create , manage and share business collateral, easily.
- What is a Lean Canvas?
The Lean Startup Canvas, inspired by the Lean Startup movement, was originally created by LEANSTACK to generate simple and sleek representations of business operations. This version of the Business Model Canvas Template allows your startup to present its unique solutions and market competition to key partners before fully launching a product.
Why do I need it?
From Idea to Business. Designed for entrepreneurs, the Lean Canvas allows you to map out the key foundations of your startup . It prompts you to analyze and prioritize your goals through the beginning stages of your business. From the problem to key metrics, the Lean Business Model helps you navigate through the uncertainty that comes with starting a new business.
Market Analysis. The Lean Startup Summary helps you identify your competitive advantage , making it easier to highlight ways to utilize those strengths. It also generates a blueprint for your startup to establish a consumer segment based on your solutions to the presented problem. This will make it easier to build mutually beneficial customer relationships down the road.
Launch and Growth. Startups revisit their Lean Canvas as their company evolves, pivots and grows. The tool helps you maintain the focus of real-life operations on your unique value proposition and communicate that value with your key partners and stakeholders.
Now it’s your turn.
Be low are tips and tricks to help you fill out the Lean Canvas.
The Problem
Identify real pain points
Put yourself in your customers’ shoes and describe up to 3 problems they face. Try to understand their unique needs and challenges. These problems will lead to working on a business model.
Careful! Identifying the wrong problem is a problem. For instance, you might believe your SaaS platform is struggling because your logo and copy aren’t engaging, but the real issue might be that users don’t understand why they need your product. If you skip this step, you risk wasting time and energy on non-existent problems.
There are several ways you can get a more informed understanding of your problems, including:
- User Interviews
- Surveys and Questionnaires
If certain issues are raised by multiple consumers, you can begin to prioritize solutions. Interact with your platform, product or service yourself , as if you were a customer. Consider each step of your “user” experience and ask yourself what’s working and what’s not.
Careful! Avoid writing down high-level problems. These tend to be obvious, large-scale, and difficult to achieve. Instead, focus on specific problems that merit concrete, measurable solutions.
What are existing alternatives?
How else can your customers address their problems? What products or services already exist as alternatives to yours? This section is where you identify competition. Who are you up against and where your competitive advantage lies.
Research your competitors using a variety of approaches . Inquire about other items or services that your target clients have looked into or tried. Make use of search engines, social media, and trade periodicals to establish yourself as an expert in your field.
Xtensio’s Competitive Analysis Template will help you get started on your initial research and establish a clear picture of where you stand in the market.
- How is your product solving the problem?
The next step in filling out your Learn canvas is to define the top three features and capabilities your product or service offers to solve your customers’ problems.
Careful! You might think you know the best part of your product or service, but completing the previous sections of the Lean Canvas may prove otherwise. Your users will ultimately determine which aspects of your product they’re most eager to use and will subsequently find most beneficial.
Brainstorm 10 features and capabilities of your product or service. Consider the strengths and flaws of each and whittle your list down to the top three. You can also use other strategy exercises like completing the brand positioning canvas to help define your solution.
Key Metrics
- Measure your progress
What activities drive your product usage and help you build strong customer relationships? Which statistics indicate how well your company is doing? What numbers best underline the opportunity for development?
Your Lean Canvas should outline how you will measure success. Key Metrics allow you to track and evaluate the success of a specific business process . A Key Metric could be daily visitors to your site, the number of company emails opened by consumers per hour or the monthly sales of a specific feature. Every sector of a business has specific metrics that should be monitored. Fill in this section of your lean canvas with the metrics that are most critical to the problems you’re trying to solve.
Pro Tip: The most useful metrics provide a great deal of insight and spur short-term, low-cost action.
Customer Segments
Determine your user base
Who do you want to reach out to? What type of person do you think will get the most benefit from your product? Is there a certain set of people you expect to be eager to use your service? Perform a more in-depth examination of your target audience before moving on to this phase.
Define 3 to 4 specific user personas from your early adopter groups. Xtensio’s User Persona Creator will help you paint a clear picture of who your potential customers are as people.
Who are your early adopters?
Who will be first in line to try your product? Why will this group want first dibs? Early adopters are essential to identify for a few reasons:
1. If you’re looking to test a new feature with a small, private group, you can turn to early adopters for feedback. This way you can make necessary revisions before launching to a larger, public audience.
2. If their voices are heard and changes are made that push your product from good to great, early adopters will stand behind your company. They will return as consumers time and time again and encourage others to check out your product.
Unfair Advantage
What makes you stand out?
Your competitive advantage should be clearly highlighted in this section of the Learn Canvas. What distinguishes you from your competitors? What are some assets you have those other businesses can’t easily copy or acquire? Here are some instances of Unfair Advantages to help you consider what makes you unique:
Inside Information: In-depth knowledge or skills that are critical to the problem domain. Basically, this means being well positioned to understand a problem, create a solution, and continue to innovate faster than others.
Personal Authority: If you’re a scholar in a specific field, an award-winning builder of a certain product, or an expert on given services, you hold sway over competitors.
Community: If you have a vast network of customers and partners at your fingertips, you’re in a good position to make big strides.
Internal Team. Do you have a dream team? If your office is loaded with unique talent, you’re set to compete.
Reputation. Have you built up a following, a name that people instantly associate with proven success? A proven and popular brand reputation is a major advantage.
Communicate with your customers
How will consumers come into contact with your brand? Where will they first learn about your company? Will it be through social media? If so, which sites? Will it be through advertising? If so, where will these ads exist? And how will you build customer relationships once they’ve found your product? You can use the ecosystem mapping template and create a strong content strategy to help you define what channels you’ll reach customers at different times.
Channels to consumers are also known as “touchpoints” — the points or places where users encounter your brand . Identifying consumer channels is crucial, as you want to ensure potential users are hooked on what you’re offering and satisfied with your service through every step of their experience. There are three time periods when consumers will come into contact with your company; within each of these are a range of ways in which users will encounter your brand:
Before Purchase:
- Social media platforms
- Advertising
- Word of mouth
During Purchase:
- Main website
- Conversations with sales or other team members
After Purchase:
- Follow-up “Thank you” notes
- Email updates on new products or features
- Customer feedback surveys
Careful! The bullets above are meant to spark your thinking about possible channels. However, when you fill in this section be specific about your consumer touchpoints.
Unique Value Proposition
Describe your product
The main point of completing the Lean Canvas is to discover and define your product’s core value. The Unique Value Proposition (UVP) should be a single clear compelling message that captures the essence of your product and the solutions it offers your target audience with respect to the problems you are trying to solve.
A UVP should:
- Be easy to understand in about five seconds.
- Communicate the benefit a customer receives from using your products and/or services.
- Explain how your offering is different from and better than competitors’.
Careful! A UVP is not a slogan. Melts in your mouth not in your hand (M&M), Just Do It (Nike), Belong Anywhere (Airbnb) — these are slogans, not Value Propositions. Don’t be unique for the sake of being unique. Adding a quirky flaw (a specific colored product, a cookie with every purchase!) to differentiate your company is useless. If you want to stand out in your field, your company must have something notable that sets it apart. Avoid hype (never seen before amazing miracle product!), superlatives (best, most-powerful!) and jargon (value-added interactions and top-notch assets) when writing your UVP.
How does your product fit into the bigger picture?
A High-Level Concept is a one-sentence pitch , describing your product in terms of others in existence that is widely known and well-established. Here are examples: “Friendster for dogs.” (Dogster) “Flickr for video.” (YouTube)
High-Level Concepts are perfect for investors describing your company to key partners, fans spreading the word about what you’re up to, and the press covering your business in an article.
Careful! People should be familiar with the companies and or analogies used in your Concept. If you refer to your business as the love child of an obscure corporation and off-brand mythical creature, it will mean nothing to no one.
Cost Structure
Map out your expenses
Try to consider all your costs of doing business (ie. customer acquisition, distribution, etc.), and make sure your customer lifetime value exceeds your acquisition cost.
90% of new businesses fail because they do not properly consider the cost of launching and running their businesses.
Revenue Streams
Identify sources of income
Revenue streams are the lifeblood of companies. What sources of income keep your business churning?
Look at similar products to identify a pricing model that appeals to your customers. Be sure to avoid overcomplicating your pricing model. Here are five potential inlets to get you thinking about your company-specific revenue streams, of course, there are plenty more outside of the ones below:
1. Asset Sales: Customers pay to purchase ownership of your product, be it a book, camera or coffee mug.
2. Usage Fees: Payment for the number of uses of your product such as the number of minutes spent on a phone or nights in a hotel room.
3. Subscription Fees: Consumers pay for unlimited usage of a product for a given time period like a monthly gym membership or a yearly newspaper subscription.
4. Delivery or Installation Fees: Consumers pay for the installation and/or delivery of your product or service.
Final Thoughts
The Lean Startup Canvas template is not set in stone. Like other Xtensio tools , it should be repurposed, revisited, and revised to suit your specific needs. Many companies revisit Lean Business Models every time they prepare to release a new feature or tool. This helps internal teams understand and hone in on the central customer problem their updates are resolving. The Lean Startup Summary exercise helps drive organizational focus down to the right feature-set (solution), metrics, and customer segments which in turn aligns sales, marketing, design and development efforts.
- The Problem: Pain points and alternatives
- Who do you want to reach out to?
- What makes you stand-out?
- How will consumers contact with your brand?
- Your Unique Value Proposition
- Final Thougths
- Five Variations of Lean Canvas Template
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How to Create a Lean Canvas for Your Business Idea or Startup
Lean Canvas is a 1-page business plan template that documents the key assumptions of your business model, and works as a visual guide for communicating it effectively.
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What is lean canvas
Lean Canvas was created by Ash Maurya as an adaptation of Business Model Canvas by Alex Osterwalder. The tool follows Eric Rise's Lean Startup methodology. Compared to writing a business plan for your startup, which can take weeks or months, you can use Lean Canvas to create a snapshot of your business idea in one afternoon.
1. Sign in to Infolio or create a new account .
How to use this template?
2. Create a new project. Learn more in our quick start guide .
3. Add a space to the project via the panel on the left and select the particular template.
Like a business plan, Lean Canvas utilizes a 9 blocks concept, however, is modified to best suit the needs and requirements of a Lean Startup. It's perfect for brainstorming a potential business model, and guides you through its building blocks logically, starting with customer problem right through your unfair advantage.
When to use lean canvas
Business Model Canvas and Lean Canvas may look similar at first glance - both of them are visual and allow seeing the big picture.
Lean canvas, however, is entrepreneur-focused and designed for emerging businesses: it takes only minutes to create, lets you focus on building your business faster, by capturing your idea, collecting feedback, and iterating on it dynamically.
How to use lean canvas
Start with an empty Lean Canvas template and fill all 9 blocks in the set order with notes, links, images, documents or any other related information. Collaborate with your team to find the best way to explain your idea in a concise way.
Make sure your statements are specific and concise. No "but", "however", keep everything simple, straight to the point.
After you have prepared a draft, go through each step, telling this story to yourself: we will help these people (customer segments) to solve (problem) by providing them (solution). They will know about us through (channels) and they will be convinced to join us because (value proposition) and because we already (unfair advantage). We will charge them by (revenue) and we believe this will cover our (costs). We will measure our performance by tracking (key metrics). It should all flow and make sense, like a story where everything is linked. If it doesn't, the Lean Canvas needs more work.
Prepare a Lean Canvas for each customer segment of your idea. This is because each customer segment may have different problems, solutions, channels, revenue, costs, etc.
http://getproductmarketfit.com/how-to-compile-lean-canvas-business-plan-one-page/
How to create a Lean Canvas
In infolio: uber london example.
Lets assume you have a business idea that you want to capture, using Lean Canvas in Infolio, to brainstorm with the team and polish it, as well as to iterate on it after the validation stage.
1. Open lean canvas template
Start by creating a blank space and select "Lean Canvas" from the templates list. Once on the Lean Canvas template, fill in the blocks in the suggested order, starting with the problem definition.
2. Fill in problem & customers
Brainstorm on your target customers' problem and document each problem as a note, by either dragging the note button from the top toolbar (zoom in first) or by right-clicking and selecting "create new note". Put yourself in your customers' shoes and capture their 3 key frustrations related to the need you intend to serve.
Using the same note feature, list the existing alternatives to your offering (per each problem nailed down above) that customers may utilize to meet their needs.
Document your target customer segments with the notes of a different colour. Note that customers are not necessarily the users of your product (e.g. users of dog food are dogs, however, these are dog owners who buy stuff for the pets).
Think of the potential early adopters of your product, and nail them down (yes, handy notes).
3. Formulate your unique value proposition.
Use notes to document your UVP and High-Level Pitch, and Unfair Advantage. Make use of colour coding to distinguish between information groups.
UVP is a curt and precise statement that refelcts the promise of value your product delivers. It explains how it solves your customer's problems (relevancy), outlines specific benefits (quantified value), and tells what makes your product better than the competitors' one (unique differentiation).
Get inspired by UVP's of admired brands and come up with a unique UVP that helps you differentiate meaningfully, targeting your early adopters, and keeping their key problem in mind. Also, focus on "finished story benefits", e.g. resume optimization service doesn't actually "sell" a well-drafted CV, but rather - a good job offer.
Complement your UVP with a concise High-level concept. It is an effective brief pitch used to quickly get your idea across and make it easy to spread. Its your UVP distilled to a memorable sound bite.
Example: YouTube — "Flickr for video", Aliens (movie) — "Jaws in space".
Pin down your unfair advantage, drafting a note.
An unfair advantage is something that cannot easily be copied or bought by your competition and is compelling enough - for your target customers to choose your product over the existing alternatives.
It can come from a number of sources, be it in-depth knowledge of a specific domain (e.g. multiyear expertise in a given industry), intense focus on one domain (e.g. Google's focus on search engine), the community behind your brand (think of Facebook or Apple ecosystem users), etc.
4. Envision your Solution
Shift to the Solution section within the Template and add notes, reflecting your product vision, its possible details and features.
Ideally, do this in a team workshop, be open-minded and collect various ideas, however, nailing down the ones that can be grounded with some figures/evidence.
5. Think of promotion channels
Using the notes, capture all the possible channels you can utilize to promote your offering: group apart the free ones (like social media, SEO, blogging, etc.) and the paid ones (Facebook ads, Google ads, LinkedIn ads, directories listings, trade fairs, etc).
Try to center your efforts around inbound marketing tools that use "pull messaging" to let customers find you organically.
Automate activities, where possible and efficient. Also, think of retention first, rather than of referral. Its crucial to have a product worth spreading first, and then attempt to go viral.
6. Plan your revenue streams and cost structure
Pin down your intended revenue streams, dragging notes to the dedicated template section. To make things simple, start with a single and simple pricing plan first. It can be tested and got back to at later stages.
You may want to consider the Freemium model. Also, free trial is a good option to test the demand.
7. Write down your key metrics
Set up the clear metrics that can be easily measured regularly, in order to tell you how your business is doing. Post notes to the respective part of the template - to visually track your performance weekly/monthly.
You may think of metrics reflecting new users acquisition (e.g. No of app downloads, or user registrations), users engagement (No of interactions with your brand in SM - likes/reposts, followers base growth, referrals), user retention figures (e.g. No of active product/service users monthly), your expenses (e.g. funds spent on travel, or ads costs), etc.
Lean Canvas is a simple yet powerful tool that allows you to capture the essence of your business idea within 30 min, to get back to it repeatedly and iterate on it dynamically as the new data comes in.
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