Excursion 29

The Lean Startup and Canvas

In its simplest form, the lean startup encourages entrepreneurs to get early products into customers’ hands and to use the feedback to drive product development. Although some aspects of the framework were specifically intended for software and online products/services, the broad principles are applicable to any entrepreneurial context. The Principles of The Lean Startup are summarized in Excursion 29 for your reference.

The Lean Startup Principles

Eliminate uncertainty. “It is about putting a process, a methodology around the development of a product.”

Work smarter, not harder. “Every startup is a grand experiment that attempts to answer... "Should this product be built?" and "Can we build a sustainable business around this set of products and services?"

Develop a minimum viable product (MVP). “The first step is figuring out the problem that needs to be solved and then developing a minimum viable product (MVP) to begin the process of learning as quickly as possible.”

Validated learning. “When you focus on figuring the right thing to build-the thing customers want and will pay for-you need not spend months waiting for a product beta launch to change the company's direction. Instead, entrepreneurs can adapt their plans incrementally, inch by inch, minute by minute.”

Source: www.theleanstartup.com

Then Lean Canvas can be tied back to the RTV model.

As we explore the Lean Canvas, we will address Resources through the elements on the upper left part of the Canvas: “Problems,” “Solutions,” and “Key Metrics.”

The Transactions dimension will be straightforward, consisting of the elements on the upper right side of the Canvas: “Channels,” “Customer Segments,” and “Unfair Advantage.”

The Value dimension, the core of both the Lean Canvas and the OBMC, includes “Unique Value Proposition,” “Costs,” and “Revenues.”

excurtionPart29a

Why Lean Canvas vs Business Model Canvas?

I often get asked why I created a different adaptation from the original Business Model Canvas by Alex Osterwalder. Lately, this question has bubbled up in frequency which is why I decided to take…

You might be asking, at this point, why I’ve suggested that problems, solutions, and key activities are the “Resources” component of the Lean Canvas business model. As I already noted, the connection is imperfect, but worth briefly discussing.

As you remember from Chapter 4, resources are the various assets, capabilities, and information that the organizations leverages to generate value. Some may be unique, some will be relatively common. In the Lean Canvas, we assume that the organization is not fully-formed. As such, many (if not all) of the key resources are highly fungible. In other words, until a business model is more clear, it is likely that key resources could be swapped out or modified as needed. Consider the AEB model for a moment. Is the right information access platform a website or a mobile app? Should the venture hire developers to create and manage the platform, or should the key resource be a contract with a third-party developer and hosting company?

Sometimes the key resources will be obvious; sometimes less so. Thinking about key resources is absolutely worth your time, as noted in Chapter 4. The Lean Canvas, however, focuses primarily on the problem to be solved. The clear identification of the problem and the solution provides direction about the type of resources that will be required. Combined with the set of key activities that need to be performed, the entrepreneur should have a starting point for evaluating which bundle of resources provides the best option for business model viability.