Lean Canvas: Definition, History, Function, Examples and Components
Ever heard of lean canvas? One of the biggest challenges for business owners is to change your idea into a plan. You might think that you have a strong idea, but writing and doing your thoughts can be much more complicated.
From ideas for new businesses to concepts for new products and services, making coherent plans can take weeks or months.
Lean Canvas is a planning method that helps you reach the core of your idea. It puts everyone on the one page, helps you set the main information you need, without unnecessary details.
Here is a complete discussion of lean canvas that you can learn to grow your business even better:
What is Lean Canvas?
Lean Canvas is a one-page business plan method made by Ash Maurya, which is adapted from the Canvas Business model by Alexander Osterwalder.
This sheet displays a number of blocks to help you map some important points that will help you change business ideas into something more concrete.
Lean Canvas is made specifically for entrepreneurs to make it easier for them to get clear and simple ideas about what they do.
Lean Canvas History
The Lean Canvas is adapted from the Canvas business model that uses similar principles. However, Lean Canvas aims to cut more unnecessary information and time consuming tasks.
Lean Canvas was first made by Ash Maurya, the author of the Running Lean book, in 2010. Maurya is an advocate for a slim and founder of the company and the CEO of Leanstack.
Although business planning methods have not yet been there, many entrepreneurs and business fans lean, have used it. It is also used by universities, accelerators, and various groups which are part of large organizations.
Even the concept of Lean Startup has long been in a great scheme, so Lean Canvas is a relatively established tool.
Lean Canvas and Business Model Canvas
The Lean Canvas sheet was adapted from the Canvas business model. Business the Canvas model was proposed by Alexander Osterwalder in 2008 and has since been adapted for various fields.
There are some main differences between Canvas and Lean Canvas business models, although both are intended to assist Lean business planning.
Canvas business models have sections for major partners, such as suppliers, main activities, main resources, and customer relationships. Leans like Lean Canvas, Canvas business models also have parts for customer segments, channels, income streams, and cost structures.
Ash Maurya said that when making Lean Canvas, the focus was to make it acquired by identifying what was most at risk for business.
After contemplating the Canvas business model he had made before, he realized that he had left several high-risk problems, while some of the things he had put on the canvas did not seem to be quite high at high risk.
Maurya got rid of several of the main boxes on the canvas business model and add a problem box, solution, unfair benefits, and the main metric.
He deleted the main activity box and the main resource because he felt that it was more useful to help others understand business, and not for entrepreneurs to understand what they did.
Because he thinks that former customers can enter the channel box, this box is also removed. Maurya wasn’t sure about removing the box for the main partner but finally decided that any risk associated with partners would enter into the cost structure and channel box.
Additional boxes are intended to make it easier to identify problems and find solutions, leaving only a little room to compact your idea.
This was done intentionally so that entrepreneurs were not too deep and lost in detail that was not important. The main metric box forces employers to find the most important actions or metrics that they need to monitor and measure.
Lean Canvas function
There are various benefits of using the Lean Canvas model to plan business ideas, both based on their own excellence and when compared to the canvas business model.
First, this method is designed for all entrepreneurs. Like other versions of the Canvas business model that has been adapted for a different niche, this has been mapped by considering entrepreneurs. The example used for the Canvas model business when released is all existing and successful businesses, making it difficult to apply to new business ideas.
With Lean Canvas, entrepreneurs can focus on identifying problems and solutions. It is designed to work for beginner’s mindset and help entrepreneurs build their ideas.
Making Unfair Advantage or as part of the canvas allows entrepreneurs to make sure they have something that will help them stand out.
They will not only have a unique value proposition, but they will identify one thing that other brands cannot be done in a way exactly the same as they do.
Sheets and limited boxes of Lean Canvas are easy to understand, and encourage entrepreneurs to think carefully.
There is only so much space to use, which means it is very important to summarize the main points into the most important information.
It acknowledges that business plans are for entrepreneurs and are rarely displayed to others. No need to be too detailed when the point is to discuss the main things that are important when making a business plan.
Example and komoponen in lean canvas
1. Problem (Problem)
Every customer segment (CS) you want to handle will have a series of problems they need to solve. In this box try listing one to three high priority problems that your customer’s segment has. Without problems to solve, you don’t have products / services to offer.
2. Customer segment (Customer Segments)
Customer problems and segments can be seen as connected intrinsically – without the customer segment in mind you cannot think of their problems, and vice versa.
3. Unique value proposition (Unique Value Proposition)
In the middle of the canvas is UVP. Value proposition is the promise of the value to be delivered. That’s the main reason for the prospect must buy from you.
The way to understand this is to think of why you are different and why your customer segment must buy / invest time for you – Further reading: Examples of useful value propositions (and how to make good).
4. Solution (Solution)
Finding a solution to this problem is the point! You won’t get this from the start, but that’s okay.
All you need to do is get out the building – expression created by, Steve Blanks. The solution is not in your office, but on the streets. So, interviewing your customer segment, ask questions to them, and accept the learning. Remember, Lean Startup is validated by learning through a sustainable building – Measure – Learn cycles.
5. Channels (Channels)
Channels are the way you reach your customer segment. And remember that at the initial stage, it is important not to think about the scale, but focus on learning.
By remembering that, try to think of which channel will give you enough access to your customer segment while giving you enough learning.
Channels can be email, social, advertising, blogs, articles, trade shows, radio & TV, webinars etc. And your BTW doesn’t have to be in all, only in the place where your customer’s segment is.
6. Revenue Flow (Revenue Streams)
How you determine the price of your business will depend on the type of model, however, it is very common for stub companies to reduce costs, even offer it for free to get attraction, however, this can cause some problems.
The key is actually delaying / avoiding validation. Encouraging people to register something for free is much different from asking them to pay. There are also ideas about felt values.
7. Cost Structure (Cost Structure)
Here you have to list all operational costs to bring this business to the market. How much does it cost to build / landing page? What is your combustion rate – total monthly operating costs? How much does it cost to interview your customer segment? What is the cost of market research papers? etc.
You can then use this fee and a potential revenue stream to calculate the crude or BEP break.
8. Main Metric (Key Metrics)
Every business, whatever industry or size, will have several major metrics used to monitor performance.
The best way to help this is to visualize the upper part of the funnel that flows from the top of the large open, through several stages to the narrow end.
A good model to help in this case is Dave McClure’s Arrrr (aka Pirate Metrics)
9. unfair advantage (unfair advantage)
This point is the most difficult to answer. However, try to think about this because it has unfair benefits can help when looking for partners & investors.
Here are a good definition of unfair benefits:
“The only real competitive advantage is that cannot be imitated and cannot be purchased.”
Unfair Advantage can be in the form of insider information, dream team, get expert support, existing customers, etc. So, rather than thinking about adding something like “commitment and desires” as an unfair advantage (because it’s actually not), think about what you don’t have. Other people can buy.
As a business owner, it is your job to pour the idea of your head on paper so that other people can see and help build a problem solution.
Traditional business plans are irrelevant in the ideation stage, they take a lot of time and are usually made without validated learning. Business plans are more suitable for after you run a business and want to increase the scale.
During the manufacturing stage, try to stay slim, use Lean Canvas to convey your ideas and use the principles of lean to test your hypothesis by getting out of the building.
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