Lean Canvas Process and Examples

Lean Startup Essentials #1

Part 1:
Why? & Lean Canvas

Lean Startup Essentials #1: Lean Startup

Most startups fail from a lack of
(paying) customers.


Startup:
Temporary organization used to
search for a repeatable and scalable
business model.
As deﬁned by Steve Blank.


Your initial Goal:
Improve likely success rate of your venture,
and reduce risk of failure.

Enable yourself to actually
make the jump into a full-time entrepreneur.


Your Process:
Likely entirely chaotic.

No one implements the lean startup
as a strict process.

Similar to agile adoption (e.g. Kan-ban)
you need to make a slow transition
into more structured thinking.

Lean Startup Essentials #1: The Canvas

Product is only 1 of the 9
critical aspects that make your
company work.

Lean Startup Essentials #1: The BM Canvas

The Business Model
Canvas

Lean Startup Essentials #1: The BM Canvas

Day Month Year

No.

Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value?
Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers?
Which Key Resources are we acquiring from partners? Customer Relationships? What bundles of products and services are we offering to each Customer Segment? Which ones have we established?
Which Key Activities do partners perform? Revenue streams? Which customer needs are we satisfying? How are they integrated with the rest of our business model?
How costly are they?

What Key Resources do our Value Propositions require? Through which Channels do our Customer Segments
Our Distribution Channels? Customer Relationships? want to be reached?
Revenue Streams? How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?

What are the most important costs inherent in our business model? For what value are our customers really willing to pay?
Which Key Resources are most expensive? For what do they currently pay?
Which Key Activities are most expensive? How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?

This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
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The Business Model Canvas - Example

KP KA VP CR CS
LEGO has to LEGO Factory
provide and builds a Long Tail Thousands of new,
manage the LEGO Factory community around customer designed
platform/ logistics substantially customers who are kits perfectly
Customers who expands the scope truly interested in complement LEGO’s
that allow
build new LEGO of the off-the-shelf niche content and standard sets of
packaging/ delivery
designs and post kit offering by giving want to go beyond blocks. LEGO
of customer made
them online LEGO fans the tools off-the-shelf kits Factory connects
sets
become key to build, showcase, customers who
partners generating and sell their own create customised
content and value KR custom designed CH designs with other
LEGO has not yet kits customers, thus
fully adapted its LEGO Factory’s becoming a
resources and existence depends customer match-
activities, which are heavily on the Web making platform and
optimised primarily channel increasing sales
for the mass market
LEGO Factory aims to generate
C$ R$ small revenues from a large number
The Factory leverages production of customer designed items. This
and logistics costs already incurred represents a valuable addition to
by its traditional retail mode traditional high-volume retail
revenues.

Lean Startup Essentials #1: The Lean Canvas

The Lean Canvas


Focused on Early-Stage
integrates Problem/Solution
ﬁelds


Problem Solution Unique Value Unfair Customer
Proposition Advantage Segments
Top 3 problems Top 3 features
Single, clear, Can’t be easily Target customers
compelling copied or bought
message that
states why you
are different and
Key Metrics worth buying Channels

Key activities you Path to
measure customers

Cost Structure Revenue Streams

Customer Acquisition Costs Revenue Model
Distribution Costs Life Time Value
Hosting Revenue
People, etc. Gross Margin

Lean Canvas is adapted from The Business Model Canvas (http://www.businessmodelgeneration.com) and is licensed under the
Creative Commons Attribution-Share Alike 3.0 Un-ported License.


Product

• Solution
• Cost Structure
• Unfair Advantage


Market

• Customer Segments
• Problem
• Revenue Streams (Pricing)

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Market <=> Product

• Unique Value Proposition
• Distribution & Marketing Channels
• Key Metrics

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Example: Tupalo
#1 Finding Business DB
information, Yellowpages Herold / ED #1 9-to-5 folks
quality & location #1 Search online. Partnership looking for lunch
of a business function, Sitemap options, etc.
#2 Business CP Find the best SEO Know-How
#2 Promoting a restaurant/etc. #1 Long-tail
business, Key Metrics near you. Channels mainstream
providing correct
information to #1 Avg. Reviews #1 Long-tail SEO #2 Business
customers per user owners
#2 European (restaurants, etc.)
#2 Avg. Revenue Directories (B2B
per business Sales)


Software Development #1 Free
SEO
Partnership Deals #2 Hundreds/Thousands of EUR (recurring)


Example: Freckle
Tracking time Time tracking
precisely without with superb UX, Time tracking Existing Freelancers
effort no unnecessary software that audience:
fuss you’ll actually Mailinglists, Agencies
Easily invoice use. Twitter, etc.
clients with good
report on Key Metrics Channels
performed work
Hours tracked - Word of mouth
- Cross-sales
Rev. per user - Freebies
- Existing
audience


Software Development 12-50 USD / month (dep. on company size)
Marketing/Copywriting
CC fees
Hosting


Example: Garmz
#1 Mass- No-barriers
producing a fashion #1 Make your Team with #1 Fashion
fashion garment production, design talent industry designers
chosen by the visible experience
#1 Marketing & community #2 Trend-chasing
sales #2 Find the latest hipsters
Key Metrics fashion trend & Channels
#2 Buy trendy be unique
clothes #1 New designs Fashion blogs
Partnerships
uploaded #1 Fashion schools
#1 Fashion events
#2 Conv. rate to #2 Word of mouth /
actual sale strong brand


Production! (super expensive) #2 100 EUR / piece
Prototyping
Payout to designer
Marketing, Biz Dev, Software Dev

Lean Startup Essentials #2: Customer Discovery

Part 2:
Customer Discovery


Customer Interviews

30 min in-person with
your prototypical customer

People like talking about their ﬁeld -
explore their worldview.


How to conduct an interview

1. Set context & tell your story
2. Tell your problem hypothesis
3. Listen to their worldview
4. Ask for follow up / references


Online Market Tests:

Google Adwords
Fake Landing Page with
“Signup to be notiﬁed when we launch”
“Can we call you to ask a couple of Qs?”


User Groups & Conferences:

Hand out cards with invite codes -
landing page with “join our soon-to-
launch beta programme”

SolidRails
European VPS cloud. Fully-integrated Rails hosting.

Your private beta access code: OEWO8C


Amy Hoy’s
Sales Safari:

Lurk in online forums of your
customer segment, learn how they
talk about products & beneﬁts

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