Lean Canvas

To breakaway from this deadlock situation, we can take a more practical approach: test the idea incrementally and progressively. All we need to do is to structure the key aspects of running a business into a small, manageable, testable, iterable, and scalable idea segments and execute them in a specific period. Not only we can test the idea, we lose less. This is why practicality is far better when it comes to testing unpredictability.

We will run through each of them in detailed manners.

There are a LOT of ways to fill the canvas but let's keep some habits and practices to ensure the it can helps us greatly. Among the best practices are:

• Do it at the very first step when designing a product
• Iterate for each product features (first enables the core features customers identified for you, then improve it accordingly).
• Make sure you have open-mind. The whole point is to question the status quo and seek changes.
• Avoid refilling.
• It's a tool not just for business idea; but everything. It's a practice.

The objective is simple: to find a big enough market you can reach with customers who need your product that will pay a price you can build a business around.

The very first 2 aspects to fill in is very likely the problems and the potential customers. This is where you identify the "supply and demand" of your particular business.

Usually, you would have a long list of problems that you identified. However, to keep things manageable and small, you need to screen through the list of the problems and select on the top-3 problems highly demanded by the customers.

The next thing to do is to find out any other existing alternatives or existing products that are fulfilling these top 3 problems. Unless the problems are so novel that is so brand new (very unlikely), there must be an existing solution. It can be customers rolling the own patchy workarounds. Also, you must keep in mind that many times, the solution are not obvious. Example, an online collaboration tool may not be a tool but email.

Once done, you might want to segment the corresponding customers (demand). There are various customer profiles to begin with and what you're looking for are those early adopters for the listed problems, not the mainstream customers.

1. Top 3 Problems:
   • Business needs more portability - business plan is too complicated and static, usually getting skipped.
   • Measuring progress is hard work - a lot work to build qualitative data analysis for usable insight.
   • Communicative learning is critical - always stay on objective and keep every stakeholders informed.
2. Existing Alternatives:
   • Intuition
   • Business plan
   • Worksheet

• Users:
  • Creators - startup founders.
  • Collaborators- advisors, investors.

Once you have the supplies and demands identified, the next thing to do is draft up a simple solution with its unique value proposition (UVP). However, you must keep in mind that the solution at this stage is "draft", not "conclude" since we still have other aspects to consider.

UVP should have the following patterns based on Leanstack recommendations:

1. Differentiate your solution from the competitor (but still relevant)
   • Best indicator is the UVP is already self-explanatory (if you can write something here, your UVP is not that unique yet)
2. Target early adopters
   • Clear, bold, and specific messaging, not mainstream customers yet.
3. Focusing on finishing story benefits
   • feature is: "professionally designed resume template"
   • benefit is: "eye-catching resume that stands out"
   • but a "finishing story benefit" is: "landing you dream job"
4. Branded keyword
   • Performance: "BMW"
   • Design: "Audi"
   • Prestige: "Mercedes"
5. Can answer WHAT, WHO, and WHY
   • CloudFire: "Photo and Video Sharing for Busy Parents"
   • USERcycle: "Lifecycle Marketing Software"
6. Usable as high-concept pitch
   • Youtube: "Flickr for Video"
   • Ailen in Movie: "Jaws in Space"
   • Dogster: "Friendster for Dogs"

With business problems, customer segments, and strong UVP setup, you can now setup the solution and delivery channels. This would not be a problem for anyone. (Otherwise, are you serious in product/business design?!)

Channels in this context has a LOT of definitions. You should consider thinking:

1. FREE vs PAID channels
   • No such thing as FREE now a days. Just SEO alone you need to spend of SEM and SMO to out-spend or out-wit keyword competitions from competitors.
   • Case study:
     1. LEAN CANVAS Content Marketing - Although it boosts SEO, one still need time to write, optimize, and market it out. Given enough effort, it can be a very strong unfair advantage.
2. Inbound vs Outbound
   • Inbound uses "pull effect" like letting customers to organically find you
   • Outbound uses "push effect" like blogs, SEO, e-Books, white papers, webinars, etc.
   1. For untested and risky idea, it's best to build "Inbound" first.
3. Direct vs Automated
   • Direct - Like B2B large and fat contract.
   • Automated - Like setting up user experience for customer self-help or self-discovery.
   1. Depends on the potentials and customers, use either strategically.
4. Direct vs Indirect
   • Direct - Sell the product directly to customers
   • Indirect - Partners with strategic counterparts like large company
   1. For untested and risky idea, it's best to go with direct selling instead of partner with anyone. Between proven and unproven products, who want to choose the latter as KPI? ("First sell yourself, then let others do it")
5. Retention before Referral
   • Focus on retaining customers before actively building virality and referral. You need a product worth spreading first.

The next thing to complete is the cost structure and revenue streams. This is where the assumed pricing is tested alongside with the product.

Before proceeding, you must be clear that minimal viable product (MVP) is NOT experimental product (Beta). Hence, there is no excuse not to do cost structuring and making revenues. MVP must deliver values worth charging and pricing is part of the product.

Once you have all the cost accounted and calculated for, it's best to calculate the value of it with a factor of THREE. At early point where the idea is untested and risky, you pick the price and test it out again and again until you found your break-even point.

For untested and risky idea, don't mess with free stuff (with the exception of testing out with single free-trial pricing plan).

Alternatively, one can also start with the premium part of the freemium strategy first. Since the idea is untested and risky, you do not want the "free" part that is highly attractive for its zero-cost to distort your experimentation (they are noises since the free-customers are an expense and you're not doing charity). Once enough user-base is established, the business idea is thoroughly tested and proven after many iterative cycles, you then consider offering "free" part as a strategy.

NOTE: you must be able to measure something at some point in a manageable in order to run the experimentation.

The hardest to fill in. Sometimes, you can leave it blank. The values here must be so strong that:

• In the event where your co-founder stole the business cores, setup shop somewhere oversea, and slashes price against you (common betrayal effect, the unfair advantage retains the value here to the point where it kills your co-founder.
• In short, "an unfair advantage is something that cannot be easily copied or bought" — Jason Cohen

When the business idea is untested and risky, this field can be left blank. However, you should consider filling this field based on the early risk assessment that you identified.

The value here can be as dark as "having the relationship with the right 'expert' for endorsements or take down, personal authority, insider information sources, and etc."

That's all for Lean Canvas.

• https://developerexperience.io/practices/lean-canvas
• https://blog.leanstack.com/what-is-the-right-fill-order-for-a-lean-canvas-f8071d0c6c8c
• https://leanstack.com/leancanvas
• https://leanstack.com/LeanCanvas.pdf
• https://fourweekmba.com/pirate-metrics/