business model canvas key metrics

Business Model Canvas: Explained with Examples

Got a new business idea, but don’t know how to put it to work? Want to improve your existing business model? Overwhelmed by writing your business plan? There is a one-page technique that can provide you the solution you are looking for, and that’s the business model canvas.

In this guide, you’ll have the Business Model Canvas explained, along with steps on how to create one. All business model canvas examples in the post can be edited online.

What is a Business Model Canvas

A business model is simply a plan describing how a business intends to make money. It explains who your customer base is and how you deliver value to them and the related details of financing. And the business model canvas lets you define these different components on a single page.

The Business Model Canvas is a strategic management tool that lets you visualize and assess your business idea or concept. It’s a one-page document containing nine boxes that represent different fundamental elements of a business.

The business model canvas beats the traditional business plan that spans across several pages, by offering a much easier way to understand the different core elements of a business.

The right side of the canvas focuses on the customer or the market (external factors that are not under your control) while the left side of the canvas focuses on the business (internal factors that are mostly under your control). In the middle, you get the value propositions that represent the exchange of value between your business and your customers.

The business model canvas was originally developed by Alex Osterwalder and Yves Pigneur and introduced in their book ‘ Business Model Generation ’ as a visual framework for planning, developing and testing the business model(s) of an organization.

What Are the Benefits of Using a Business Model Canvas

Why do you need a business model canvas? The answer is simple. The business model canvas offers several benefits for businesses and entrepreneurs. It is a valuable tool and provides a visual and structured approach to designing, analyzing, optimizing, and communicating your business model.

The business model canvas provides a comprehensive overview of a business model’s essential aspects. The BMC provides a quick outline of the business model and is devoid of unnecessary details compared to the traditional business plan.
The comprehensive overview also ensures that the team considers all required components of their business model and can identify gaps or areas for improvement.
The BMC allows the team to have a holistic and shared understanding of the business model while enabling them to align and collaborate effectively.
The visual nature of the business model canvas makes it easier to refer to and understand by anyone. The business model canvas combines all vital business model elements in a single, easy-to-understand canvas.
The BMC can be considered a strategic analysis tool as it enables you to examine a business model’s strengths, weaknesses, opportunities, and challenges.
It’s easier to edit and can be easily shared with employees and stakeholders.
The BMC is a flexible and adaptable tool that can be updated and revised as the business evolves. Keep your business agile and responsive to market changes and customer needs.
The business model canvas can be used by large corporations and startups with just a few employees.
The business model canvas effectively facilitates discussions among team members, investors, partners, customers, and other stakeholders. It clarifies how different aspects of the business are related and ensures a shared understanding of the business model.
You can use a BMC template to facilitate discussions and guide brainstorming brainstorming sessions to generate insights and ideas to refine the business model and make strategic decisions.
The BMC is action-oriented, encouraging businesses to identify activities and initiatives to improve their business model to drive business growth.
A business model canvas provides a structured approach for businesses to explore possibilities and experiment with new ideas. This encourages creativity and innovation, which in turn encourages team members to think outside the box.

How to Make a Business Model Canvas

Here’s a step-by-step guide on how to create a business canvas model.

Step 1: Gather your team and the required material Bring a team or a group of people from your company together to collaborate. It is better to bring in a diverse group to cover all aspects.

While you can create a business model canvas with whiteboards, sticky notes, and markers, using an online platform like Creately will ensure that your work can be accessed from anywhere, anytime. Create a workspace in Creately and provide editing/reviewing permission to start.

Step 2: Set the context Clearly define the purpose and the scope of what you want to map out and visualize in the business model canvas. Narrow down the business or idea you want to analyze with the team and its context.

Step 3: Draw the canvas Divide the workspace into nine equal sections to represent the nine building blocks of the business model canvas.

Step 4: Identify the key building blocks Label each section as customer segment, value proposition, channels, customer relationships, revenue streams, key resources, key activities, and cost structure.

Step 5: Fill in the canvas Work with your team to fill in each section of the canvas with relevant information. You can use data, keywords, diagrams, and more to represent ideas and concepts.

Step 6: Analyze and iterate Once your team has filled in the business model canvas, analyze the relationships to identify strengths, weaknesses, opportunities, and challenges. Discuss improvements and make adjustments as necessary.

Step 7: Finalize Finalize and use the model as a visual reference to communicate and align your business model with stakeholders. You can also use the model to make informed and strategic decisions and guide your business.

What are the Key Building Blocks of the Business Model Canvas?

There are nine building blocks in the business model canvas and they are:

Customer Segments

Customer relationships, revenue streams, key activities, key resources, key partners, cost structure.

Value Proposition

When filling out a Business Model Canvas, you will brainstorm and conduct research on each of these elements. The data you collect can be placed in each relevant section of the canvas. So have a business model canvas ready when you start the exercise.

Let’s look into what the 9 components of the BMC are in more detail.

These are the groups of people or companies that you are trying to target and sell your product or service to.

Segmenting your customers based on similarities such as geographical area, gender, age, behaviors, interests, etc. gives you the opportunity to better serve their needs, specifically by customizing the solution you are providing them.

After a thorough analysis of your customer segments, you can determine who you should serve and ignore. Then create customer personas for each of the selected customer segments.

Customer Persona Template for Business Model Canvas Explained

There are different customer segments a business model can target and they are;

Mass market: A business model that focuses on mass markets doesn’t group its customers into segments. Instead, it focuses on the general population or a large group of people with similar needs. For example, a product like a phone.
Niche market: Here the focus is centered on a specific group of people with unique needs and traits. Here the value propositions, distribution channels, and customer relationships should be customized to meet their specific requirements. An example would be buyers of sports shoes.
Segmented: Based on slightly different needs, there could be different groups within the main customer segment. Accordingly, you can create different value propositions, distribution channels, etc. to meet the different needs of these segments.
Diversified: A diversified market segment includes customers with very different needs.
Multi-sided markets: this includes interdependent customer segments. For example, a credit card company caters to both their credit card holders as well as merchants who accept those cards.

Use STP Model templates for segmenting your market and developing ideal marketing campaigns

Visualize, assess, and update your business model. Collaborate on brainstorming with your team on your next business model innovation.

In this section, you need to establish the type of relationship you will have with each of your customer segments or how you will interact with them throughout their journey with your company.

There are several types of customer relationships

Personal assistance: you interact with the customer in person or by email, through phone call or other means.
Dedicated personal assistance: you assign a dedicated customer representative to an individual customer.
Self-service: here you maintain no relationship with the customer, but provides what the customer needs to help themselves.
Automated services: this includes automated processes or machinery that helps customers perform services themselves.
Communities: these include online communities where customers can help each other solve their own problems with regard to the product or service.
Co-creation: here the company allows the customer to get involved in the designing or development of the product. For example, YouTube has given its users the opportunity to create content for its audience.

You can understand the kind of relationship your customer has with your company through a customer journey map . It will help you identify the different stages your customers go through when interacting with your company. And it will help you make sense of how to acquire, retain and grow your customers.

This block is to describe how your company will communicate with and reach out to your customers. Channels are the touchpoints that let your customers connect with your company.

Channels play a role in raising awareness of your product or service among customers and delivering your value propositions to them. Channels can also be used to allow customers the avenue to buy products or services and offer post-purchase support.

There are two types of channels

Owned channels: company website, social media sites, in-house sales, etc.
Partner channels: partner-owned websites, wholesale distribution, retail, etc.

Revenues streams are the sources from which a company generates money by selling their product or service to the customers. And in this block, you should describe how you will earn revenue from your value propositions.

A revenue stream can belong to one of the following revenue models,

Transaction-based revenue: made from customers who make a one-time payment
Recurring revenue: made from ongoing payments for continuing services or post-sale services

There are several ways you can generate revenue from

Asset sales: by selling the rights of ownership for a product to a buyer
Usage fee: by charging the customer for the use of its product or service
Subscription fee: by charging the customer for using its product regularly and consistently
Lending/ leasing/ renting: the customer pays to get exclusive rights to use an asset for a fixed period of time
Licensing: customer pays to get permission to use the company’s intellectual property
Brokerage fees: revenue generated by acting as an intermediary between two or more parties
Advertising: by charging the customer to advertise a product, service or brand using company platforms

What are the activities/ tasks that need to be completed to fulfill your business purpose? In this section, you should list down all the key activities you need to do to make your business model work.

These key activities should focus on fulfilling its value proposition, reaching customer segments and maintaining customer relationships, and generating revenue.

There are 3 categories of key activities;

Production: designing, manufacturing and delivering a product in significant quantities and/ or of superior quality.
Problem-solving: finding new solutions to individual problems faced by customers.
Platform/ network: Creating and maintaining platforms. For example, Microsoft provides a reliable operating system to support third-party software products.

This is where you list down which key resources or the main inputs you need to carry out your key activities in order to create your value proposition.

There are several types of key resources and they are

Human (employees)
Financial (cash, lines of credit, etc.)
Intellectual (brand, patents, IP, copyright)
Physical (equipment, inventory, buildings)

Key partners are the external companies or suppliers that will help you carry out your key activities. These partnerships are forged in oder to reduce risks and acquire resources.

Types of partnerships are

Strategic alliance: partnership between non-competitors
Coopetition: strategic partnership between partners
Joint ventures: partners developing a new business
Buyer-supplier relationships: ensure reliable supplies

In this block, you identify all the costs associated with operating your business model.

You’ll need to focus on evaluating the cost of creating and delivering your value propositions, creating revenue streams, and maintaining customer relationships. And this will be easier to do so once you have defined your key resources, activities, and partners.

Businesses can either be cost-driven (focuses on minimizing costs whenever possible) and value-driven (focuses on providing maximum value to the customer).

Value Propositions

This is the building block that is at the heart of the business model canvas. And it represents your unique solution (product or service) for a problem faced by a customer segment, or that creates value for the customer segment.

A value proposition should be unique or should be different from that of your competitors. If you are offering a new product, it should be innovative and disruptive. And if you are offering a product that already exists in the market, it should stand out with new features and attributes.

Value propositions can be either quantitative (price and speed of service) or qualitative (customer experience or design).

What to Avoid When Creating a Business Model Canvas

One thing to remember when creating a business model canvas is that it is a concise and focused document. It is designed to capture key elements of a business model and, as such, should not include detailed information. Some of the items to avoid include,

Detailed financial projections such as revenue forecasts, cost breakdowns, and financial ratios. Revenue streams and cost structure should be represented at a high level, providing an overview rather than detailed projections.
Detailed operational processes such as standard operating procedures of a business. The BMC focuses on the strategic and conceptual aspects.
Comprehensive marketing or sales strategies. The business model canvas does not provide space for comprehensive marketing or sales strategies. These should be included in marketing or sales plans, which allow you to expand into more details.
Legal or regulatory details such as intellectual property, licensing agreements, or compliance requirements. As these require more detailed and specialized attention, they are better suited to be addressed in separate legal or regulatory documents.
Long-term strategic goals or vision statements. While the canvas helps to align the business model with the overall strategy, it should focus on the immediate and tangible aspects.
Irrelevant or unnecessary information that does not directly relate to the business model. Including extra or unnecessary information can clutter the BMC and make it less effective in communicating the core elements.

What Are Your Thoughts on the Business Model Canvas?

Once you have completed your business model canvas, you can share it with your organization and stakeholders and get their feedback as well. The business model canvas is a living document, therefore after completing it you need to revisit and ensure that it is relevant, updated and accurate.

What best practices do you follow when creating a business model canvas? Do share your tips with us in the comments section below.

Join over thousands of organizations that use Creately to brainstorm, plan, analyze, and execute their projects successfully.

FAQs About the Business Model Canvas

Use clear and concise language
Use visual-aids
Customize for your audience
Highlight key insights
Be open to feedback and discussion

How To Use the Lean Canvas Template for Business Model Development

As mentioned above, the Lean Canvas is a strategic management tool that helps startups and entrepreneurs develop a concise and actionable business plan. It is divided into several blocks, each focusing on crucial aspects of a business model.

Let’s take a look at each block:

Identifies the top 3 problems and pain points that your target audience experience. The end goal is to understand their problems better and identify how your solution solves their problems / and alleviates the pain.

Clearly outline your business solution and/or product offering that solves the problems your customers are experiencing. Describes how your solution effectively meets the market’s demands.

Learn More: Lean Canvas Model: Crafting Solutions and Prioritizing Features

Key Metrics

Determines the key performance indicators to help you measure your business’s performance and progress. These metrics inform your business development.

Unique Value Proposition (UVP)

Define what sets your business apart from competitors and why potential customers will choose your product or service.

Read More: What Is Unfair Advantage in Lean Canvas?

Highlights the channels you intend to reach and engage your customers. This may include online platforms, partnerships, or direct sales channels.

Customer Segments

Specifies the different market segments you plan to target. This block helps you understand your primary audience, which is critical for tailoring your offering. Learn how ‘ customer segment s’ can impact your business success and optimize your strategy accordingly.

Cost Structure

This breaks down the expenses involved in operating your business. This includes production costs, marketing expenses, and other relevant financials.

Read More: The Cost Structure Lean Canvas

Revenue Streams

Outline the sources of revenue for your business . This may include sales, subscriptions, licensing fees, or any other means through which your business generates income.

What are the benefits of using the Lean Canvas?

Ash Maurya pioneered the Lean Canvas model as an invaluable tool for startups using the Lean Startup methodology. By filling out the one-page lean canvas, you can clearly define your business model and identify any weaknesses or gaps in your strategy.

Read More: Startup Project Management: The Key to Success

The main benefit of the lean canvas is that it forces you to synthesize your business idea down to its core components. This includes identifying your target customers, the problem you are solving for them, your unique value proposition, the channels you will use to reach customers, and your revenue streams. Going through this exercise early on ensures your entire team has alignment on the fundamentals of your business.

Another advantage is that the lean canvas lends itself well to experimentation and iteration. As you test parts of your business model and gain new customer insights, you can quickly update your canvas to reflect pivot decisions. This builds momentum by keeping your team focused on the right metrics and priorities.

Tools to create a Lean Startup model

The advice has been, traditionally, to print out a lean canvas and post it somewhere to fill with sticky notes. This can often be challenging as teams are frequently remote and may need access to the information outside the office because the lean canvas should be tracked alongside progress.

Tools to create a Lean canvas online include project management tools like Leantime and tools like Leanstack.

Leantime Features Include

Task Management
Idea Management
Goals Tracking
SWOT Analysis, Empathy Maps, Project Briefs
Time tracking
AI Task Prioritization
Strategy Management
Program Plan management
And much more

Being able to map out your initial business model and then immediately connect it to a growing business is a unique value proposition of using a tool like Leantime. It’s an ideal companion to both growing and developing your business ideas simultaneously. Quickly see the progress and keep the growth on track with our features .

In Summary – Optimize Business Development with the Lean Canvas

Overall, the lean canvas model perfectly complements the Lean Startup approach. Enabling fast learning and adaptation increases your chances of finding product-market fit and launching a sustainable, scalable business.

Completing the Lean Canvas template helps create a comprehensive understanding of your business model and guides strategic decision-making. Regularly revisiting and revising (also known as iterating), the canvas keeps your business strategies aligned with market dynamics and ensures that you’re on the path to scale and grow.

Using the Lean Canvas framework is a proactive way to advance your business model, sets the stage for informed decision-making, and helps define an adaptable business model that stands the test of time.

Explore More About Lean Startup Philosophy — we’re passionate about helping you navigate the world of entrepreneurship and innovation through the lens of the Lean Startup methodology.

Frequently Asked Questions

The 9 sections are Customer Segments, Problem, Unique Value Proposition, Solution, Channels, Revenue Streams, Cost Structure, Key Metrics, and Unfair Advantage.

It’s best to complete your initial lean canvas during customer discovery and before building your minimum viable product (MVP). Revisit and iterate on it throughout product development.

The goal is to summarize your business model at a high level on one page. Capture the essential elements without going into too much depth.

The lean canvas is meant to complement a business plan, not serve as a comprehensive plan itself. Use it to align your team and identify gaps before creating your full plan.

Yes, the canvas should evolve as you learn from experiments and make pivots. Review and update it frequently to stay on track.

Here are some other links you may be interested in…

Lean Business Solutions
Understanding the Lean Canvas: The Blueprint of Modern Lean Innovation
Creating a successful startup: Business development tools to prevent failure
Crafting Solutions and Prioritizing Features with the Lean Canvas Model for Effective Business Development
Communicating Business Development with the Lean Canvas

Jenny Jackson

Jenny Jackson, a seasoned Entrepreneur-in-Residence (EIR), brings a wealth of expertise in innovation process, design thinking, and research & development. Since 2019, she has demonstrated her commitment to fostering business growth as a dedicated Business Mentor for Charlotte Launch (formerly Ventureprise Launch) and as a leader guiding two research teams in the prestigious National Science Foundation’s (NSF) iCorps program.Jenny's journey in entrepreneurship and innovation has been marked by a series of impactful roles. Prior to joining the dynamic team at the Center for Entrepreneurship and Innovation at UNC Charlotte, she provided invaluable support to startups, labs, and incubators, showcasing her dedication to fostering emerging ventures.Jenny holds a Master's in Organization Development from Queens University of Charlotte and a Bachelor’s in Industrial Technology with a concentration in Graphic Communications from North Carolina A&T State University.Beyond her professional achievements, Jenny is an advocate for children's rights and autism acceptance, reflecting her dedication to making a positive impact in the world. She is also a member of Delta Sigma Theta Sorority, Inc. she continues to champion causes that align with her values.#InnovationExpert #DesignThinking #StartupMentor #BusinessGrowth #ResearchandDevelopment

Support Leantime

Leantime is an open source project and lives and breathes through its community.

If you like Leantime and want to support us you can start by giving us a Star on Github or through a sponsorship.

How to Fill In Lean Canvas Template: the Guide to Shaping Your Startup Idea into Product

Your startup idea could get into Fortune 500 or out-hype any product in a selected niche, if you put your product development on the right track. In this post, you’ll find a brief explanation on how to create a visual one-page business model in no time using Lean Canvas model. Get the hints and fill in Fulcrum’s interactive online template.

When you’re a startup, you know for a fact that your idea will turn into a great product only if it is well executed. Prior to starting a project, Fulcrum team always shares the Lean Canvas template with each of our clients. This simple but effective practice allows business owners to shape a business model for their new product execution. Then, it’s also a great starting point for successful product development.

What is Lean Canvas?

Initially, the Lean Canvas template is an adapted version of the brilliant Business Canvas model invented by entrepreneur, consultant, and expert in business modeling Alex Osterwalder. It consists of 9 blocks essential for building a business:

Key partners
Key activities
Key resources
Value propositions
Customer relationships
Customer segments
Cost Structure
Revenue streams

This strategic management model is being used by all kinds of organizations worldwide to form a successful business blueprint. Still, to comply with the specific startup needs, it had to be slightly modified.

So, Ash Maurya created an adaptation of the Business Canvas model. Using lean methodology (built around the idea of waste elimination and resources optimization to create high-value products or services), he redesigned Osterwalder’s model into a startup-oriented Lean Canvas template.

Why Lean Canvas is Essential for Any Startup?

The number one reason why startups fail is creating a product that nobody needs. It’s called a market-fit failure. To avoid that, we advice using the Lean Canvas model to assure your product has a clear roadmap and a business plan to follow. It’s an excellent business solution that includes all fundamental key points to define before developing and launching a product.

Structured business model of your business and understanding of the current state of affairs.
Identifying what is a demand for your product in a specific market niche and what problems it solves for customers.
Your target audience defined & channels to reach your TA elaborated.

Lean Canvas Template [available online + Lean Canvas PDF]

At Fulcrum, we’ve created our own Lean Canvas tool . It’s an online instrument, free to use, where you can collaborate with your co-workers by simply sharing a link. You can also export your Business Model in a Lean Canvas PDF and receive it directly to your inbox.

The Ultimate Guide to Fill in Lean Canvas in 20 Minutes

1. start with the ‘customer segments’.

Your target audience pre-defines your business model. Therefore, it makes sense to start comleting your product’s Lean Canvas model with the customer segments. Keep in mind, there’s a common stumbling block — people tend to define their audience too broadly. The golden rule states:

When you’re trying to build a product for everyone, you’ll end up selling it to noone.

If you have many different audience segments, create a separate Lean Canvas for each of them.

Let’s take Uber as an example. What is Uber’s target audience?

Taxi drivers (as potential partners).
City dwellers without a car.

Now, try to narrow it down even more and identify your early adopters. Who is most likely to start using your app? These people have ‘above average’ needs for your product.

If we talk about Uber, we can add the geography factor here. Early adopters might be the San Francisco IT folk (San Francisco is where Uber started out). Their phone is their life. They never have cash and use credit cards, typically. They could be the most interested in ordering a taxi through the app and paying by card instead of cash.

2. Define the Problem Your Product Solves

If there’s no problem — there’s no product to solve it, simple as that. Each customer segment has distinct pains and problems. So, create a list of 1–3 pain points for each segment and be as specific as possible.

LeanStack recommends using the ‘5 -Whys technique’ invented in Toyota, which helps you to find the root of the problem. Start with a general pain point and then continue asking WHY 5 times in a row.

For instance, let’s take our client Scoob-e, an e-bike renting app in Vienna. We might start with some general statement: it’s hard to move around in Vienna. But if we continue using the ‘Why?’ technique we might get to the following problems:

There are traffic jams if you use a car. People don’t want to stay in traffic jams.
It’s not easy to park your car in the city center. Finding a parking spot is a nuisance.
Public transport picks you up at certain spots, at certain times. Who wants to wait?
Most cars aren’t eco-friendly.

In the end, you’ll get the core problems that your prospects face.

In the same section, you will see the ‘Existing Alternatives’ subcategory. Try to describe how your target audience is solving these problems at the moment. What are the alternative solutions?

Remember, you don’t describe your competitors here. This box needs to be filled with alternative ways to solve the problem. For instance, instead of using cars, people in Vienna can walk on foot or use a simple bicycle.

3. Decide on Revenue Streams

The next thing on the list is to fill in Lean Canvas with revenue streams. Why is this important? If you don’t see how you can monetize your solution then it’s not a viable business idea. So think it through before you jump into creating your MVP.

If it’s hard to determine your business model at first, start with defining the customer in your business model. Customers and target audiences aren’t always the same. For instance, in the Uber business model, taxi drivers are not the customers, yet they are also a target audience.

Next step — think through your pricing model. The pricing model is a very complicated topic itself. Do you plan on using a monthly subscription, one-time fee, or something else? Definitely document this in your Lean Canvas model.

4. Provide Solution

Take a close look at your ‘Problems’ column on the left. What is the most obvious, first-comes-to-your-head solution to the problem outlined? If you’re having doubts, sharing your Lean Canvas PDF with teammates might be a reasonable solution. What’s more, you can do a double duty, interview your stakeholders and find out their take.

5. Write down Unique Value Proposition

Lean Canvas Template has a Unique Value proposition section (also known as USP, Unique Selling Proposition). It gives you a clear understanding of who your product is for and why users should choose your company instead of your competitors.

The word ‘unique’ is here for a reason. Your value proposition needs to stand out. There are so many companies on the market, you either get noticed or go home. UVP has three components, which you can define by answering these questions:

Who is this product for?
What is the clear benefit?
Why should they choose you instead of the others?

Here is an example of Uber’s UVP:

You can also use Instant Clarity Headline. It includes the end result that your customer wants, addresses the objections they have, and reveals a specific time frame.

In the same field, you can add a ‘high-level concept’. It’s a quick catchphrase that describes your business best. It’s perfect to get the idea across & make sure potential investors understand your startup idea. For example, when YouTube just started out, its high-level concept was ‘Flickr for videos’.

6. Find Effective Channels

Just think about your perfect customers. Where does they consume the content so that you can offer your product at the right place and time?

While filling in your Lean Canvas model, consider all offline & online channels to reach your audience: word of mouth, offline events, social media platforms, emails, Facebook & Google ads, etc. Try to divide your channels into ‘Before purchase’, ‘During Purchase’ and ‘After Purchase’:

Before Purchase: word of mouth, social media, CPC, PR articles, promo emails, etc.
During Purchase: your website, catalogs, communication with sales managers, etc.
After Purchase: email updates, customer feedback survey, social media, etc.

7. List Key Metrics

Key metrics in the Lean Canvas model is your business bottom line. These are numbers such as downloads, MQLs, SQLs, sales, and other indicators your business requires to prosper. These should be tracked on a regular basis.

But don’t stop there, always go the extra mile! Estimate your Minimum Success Criteria. It’s a breakpoint or the result your company should achieve to become successful. Think in terms of revenue: what revenue should your company have to be profitable?

8. Estimate Cost Structure

What does it take to create an ideal product? How many resources and investments are needed before it’s alive and kicking? Make sure to outline both fixed & variable costs in your Lean Canvas model.

Fixed costs are the rent, taxes, interest expenses. They are less likely to fluctuate over time in comparison to variable costs.

Variable costs are direct material costs, labor costs, marketing expenses.

Most likely, your cost structure will change over time. The good thing is — you can always come back to your lean canvas & update it.

9. Create Unfair Advantage

Your unfair advantage in Lean Canvas model for product could be something like fantastic experts on your team (which is not always the case for many companies) or cutting-edge technologies that you have.

Keep in mind that Ash Maurya warns not to list ‘first to the market’ as your Lean Canvas unfair advantage. Most profitable companies nowadays weren’t the first to the market. They were second, third, or tenth. Say Apple or Facebook. They improved and perfected technologies that were already present.

Bottom Line: Get Structured

The startup world is fast and furious…

So as the Lean Canvas model: strategic, fast, and straight to the point. Yet, to succeed in this fast-changing startup world, you always need to stay updated, structured and envision your next steps.

That is what Lean Canvas helps you with. You can see what weak and strong sides of your business idea are. Most amazing – it would take you less than 30 mins to fill it in.

To get competitive, you, first of all, need to find our what your competition is and, secondly, identify your secret weapons.

FAQ: Lean Canvas Template

What is a Lean Canvas? The Lean Canvas is a single-page business plan template designed for startups. It is an alternative solution to a regular lengthy business plan created by Ash Maurya.
What are key metrics in Lean Canvas? The key metrics in Lean Canvas depend on your business goals and KPIs. These can be downloads, conversion rates, MQLs, SQLs, sales, in-app purchases, etc.
What is a Lean Canvas business model? Lean Canvas business model is a visual and short business plan with 9 essential blocks that describe your business model on a single page.
What is a high-level concept in a Lean Canvas? The high-level concept in Lean Canvas is a one-sentence pitch characterizing your product with reference to others recognized on the market.

Million Dollar Journey

Lean Canvas (2024): How-to & Examples [+ Template]

Home » Lean Canvas | 🕑

Gust de Backer

November 7, 2023.

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 | Business Strategy | Lean Canvas | Marketing and Sales | Pricing Strategy | Problem-solution Fit | Product-market Fit | Revenue Models | TAM SAM SOM Model | Treacy and Wiersema | Value Proposition Canvas

Gust’s Must-Reads 👇🏼

TAM SAM SOM
Value Proposition
Brainstorming
Decision Making Unit
Product-Market Fit
North Star Metric
Market Research
Customer Development
Growth Hacking
Brand Identity
Customer Journey
Account-Based Marketing

OGSM Model (2024): How-to & Examples [+ Template]

OGSM Model: a solution that helps with strategic planning and goal setting. You know where you want to go, but you don't have a clear picture of how you're going to get there. Ideas and goals are often not realized because there is no clear planning associated with...

Rapid Experimentation: The Road To Innovation (Complete Guide)

You read it left and right, companies that owe much of their success to experimentation.... Of course, experimentation can be understood in a hugely broad way, so in this article I'm going to get you started with: Understanding why experimentation is important...

Cognitive Biases (2024): Complete List of 151 Biases [Psychology]

Cognitive biases, there are so many of them... Decisions we make based on emotion, cognitive biases are irrational 'errors' that are programmed into people's brains and affect the decision-making process. Plenty of different articles have been written and an entire...

diagram of customer segment

Hi Obumu, could you maybe further elaborate on that?

Submit a Comment Cancel reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Submit Comment

You have Successfully Subscribed!

Advisory boards aren’t only for executives. Join the LogRocket Content Advisory Board today →

Product Management
Solve User-Reported Issues
Find Issues Faster
Optimize Conversion and Adoption

How to create a Lean Canvas (with template)

When I worked as a business analyst, crafting and adhering to a business plan used to drive me nuts. I’d spend hours thinking over every aspect of our product, only to feel overwhelmed by the volume of information I collected.

How To Create A Lean Canvas (With Template)

A business plan aims to foster a shared understanding of your product so that your team knows how to prioritize their time. However, I found this extremely difficult when working out of a 30 page document littered with advanced spreadsheets. Often, it was so complicated that it created more waste than value.

Thankfully, Ash Maurya , founder of LEANSTACK , came up with the Lean Canvas, a product management template that enables you to develop a new business and understand its essential aspects.

In this article, you will learn what a Lean Canvas is, how to use it, and how it differs from traditional business model canvases.

What is a Lean Canvas?

A Lean Canvas is a single, visual document that outlines all the critical aspects you need to consider when moving from a potential idea to a mature business.

Constructing a Lean Canvas is more than just a simple brainstorm. During the process, you make decisions on business fundamentals by iterating, learning, and adapting.

You can easily create a Lean Canvas, as long as you think strategically about your prospective product. Gathering all the blocks together can be time consuming, but a well crafted Lean Canvas will accelerate your decision-making and allow you to focus on what matters most.

When crafting a Lean Canvas, you need to follow a specific order that lets you develop a clear story for your product. A Lean Canvas looks like:

You can download a copy of this template for yourself here.

Within the template, there are nine distinct boxes to fill:

Customer segments
Unique value proposition
Revenue streams
Cost structure
Key metrics
Unfair advantage

1 . Customer segments

First comes your customers. Without them, you have nothing.

Define the target audience you aim to serve as precisely as possible. You can have different levels. Make them clear and start by focusing on the earliest adopters.

For example, Tesla initially targeted sports car lovers because it wanted to create a fancy electric car. As early adopters, they got Martin Eberhard, an American inventor, and Marc Tarpenning , an American engineer. Although they co-founded Tesla, they started using cars so others could become interested in them.

2 . Problem

Name the problems your target audience faces. Make the problems brief and easy to understand. Mention the available alternatives to the identified problems.

Going back to our example, Tesla visualized the problem of high fuel consumption and wanted to foster an alternative to it. The current options were other car brands, such as General Motors.

Over 200k developers and product managers use LogRocket to create better digital experiences

3 . Unique value proposition

Define why customers would come to you. In other words, make it clear how you create value by addressing the problems of your customer segments.

Tesla revolutionized the electric vehicle movement by introducing high efficiency batteries that stood up against their gas counterparts. Because Tesla produced a product that no one else had, it was able to carve out a unique market niche and present consumers with value.

4. Solution

Reflect on how you solved the problem by describing your solution in a high-level way. It might help if you focus on the top three features that you want your product to deliver. Products succeed when they target a problem and then introduce a novel solution to the market.

For instance, Tesla aimed to develop electric cars with high performance. That decision pushed Tesla towards a particular type of consumer aimed at true car enthusiasts.

5 . Channels

When designing any product, it’s important that you anticipate how and where your customers will interact with your solution. This is where channels come into play. You might want to sell directly to customers in retail stores, distribute online, or work through wholesale agreements.

Tesla opened direct-to-consumer retail stores to build a closer relationship with its customers. You can do the same, or explore different options like affiliates, sales force, etc.

6 . Revenue streams

Think about where your income will come from. Most successful products find more than one revenue stream. These might be from subscriptions, premium subscribers, ads, commission, etc.

Tesla initially didn’t have a revenue stream, but it had venture capital funds. As the company matured, it found additional ways to generate consistent revenue and moved away from its reliance on outside funding.

7 . Cost structure

Now comes the critical aspect. You have to understand how to organize your cost structure so that you can deliver on your promises.

What do you need to keep delivering your solutions? Some examples are development, marketing, and payroll costs.

Tesla’s top priorities were car production costs, research and development, and technology.

8 . Key metrics

New ideas are fragile and you will run into some obstacles. Because of this, it’s important to know how you measure success.

Set three to five key metrics to ensure your business is booming.

Tesla’s initial goal was to have people buy its cars. It strived to prove a market fit.

9 . Unfair advantage

Protect your unfair advantage at all costs. For example, Google has the most advanced web search and has protected it for so long that the company’s name became a verb.

The unfair advantage reflects what you have that others cannot easily copy. The more complicated it is to copy, the stronger your unfair advantage is.

Tesla had the unfair advantage of pioneering electric sports cars, putting it ahead of their competitors.

The following image represents Tesla’s Lean Canvas:

Identify your assumptions

You probably won’t get a Lean Canvas right from the beginning. On the way, you’ll learn and need to adapt.

I recommend going block-by-block and asking what your assumptions are. Let’s continue using Tesla as an example:

Sports cars fans are open to having an electric sport car
The high-efficiency battery will trigger customers to buy
Customers care about saving fuel costs

These represent some of the assumptions of the business model. The key is to test the most critical ones. Categorize assumptions based on evidence and how critical they are. Then focus on testing the most critical ones where you lack supporting evidence:

You can download this template here.

It’s normal to pivot solutions, audiences, and problems. Continuously iterate until you have solid evidence supporting your business model. Remember that Netflix started by renting DVDs per post, then moved to streaming, and now it has advertisements.

Successful business models adapt to present realities.

Business model canvas vs. Lean Canvas

You may stumble upon the business model canvas and find yourself confused whether to use it or move onto a Lean Canvas. These aren’t mutually exclusive, but they have a few core differences.

The business model canvas focuses on the business aspects. It shows you the fundamental parts of keeping your business running. For example, it addresses the key activities, partners, and resources. Such elements relate to running a business and not bringing an idea to life.

A Lean Canvas focuses on an idea and its characteristics. It helps you understand the vital aspects behind the idea — the problem it solves, how you differentiate, how to measure success, and your unfair advantage.

Combining the business model canvas and a Lean Canvas can be powerful, but first you should decide on what you’re trying to achieve, then pick the most appropriate option or join both.

Here’s an example of what a business model canvas would look like for Tesla:

Final thoughts

The Lean Canvas isn’t a template to fill and forget about. Instead, it’s a tool to foster collaboration and clarify the essential aspects of your idea. Your first model probably won’t be right; keep iterating until you identify a direction worth pursuing.

These are the key takeaways:

LogRocket generates product insights that lead to meaningful action

Get your teams on the same page — try LogRocket today.

Lean Canvas isn’t a template, but a strategic method to move ideas from draft to life
Business model canvas is better suited for products that are already running
Lean Canvas is better before going to market or in the early stage of the market
Business model canvas and Lean Canvas are powerful when combined
Collaboration is critical to succeeding with either Lean Canvas or business model canvas

Stop guessing about your digital experience with LogRocket

Leader Spotlight: Prioritization strategies in veterinary software, with Ian Evans

Ian Evans talks about building a SaaS org from the ground up and how prioritization is one of the hardest components to address.

An overview of feature parity

Feature parity occurs when the features between two versions of a product remain balanced so that the customer experience isn’t impacted.

Leader Spotlight: Solving for everyday moments, with Shira Gershoni

Shira Gershoni talks about how her team thinks about real-life moments or frustrations that impact the customer’s overall experience.

Creating a consumer behavior playbook for your product

Consumer behavior is complex, but you can break down key elements or levers to give you insights.

How to Make a Lean Canvas Model

Lucid Content

Reading time: about 8 min

Is your company getting ready to start a new project? Have you decided to start your own business? Are you developing a new product?

Whatever you’re thinking of doing, you are going to need some kind of business plan. And the type of plan you need will depend on what your goal is, what type of activity you are planning, and what level of detail you’ll need to present to stakeholders.

A traditional business plan, a lengthy document that includes detailed information such as a market analysis, marketing plan, etc., may be more than you need at this time. Writing a traditional business plan can take several weeks or months to complete. Fortunately, there are alternatives to business planning that don’t involve writing a book.

In 2008, Alex Osterwalder, a Swiss business theorist, developed the Business Model Canvas as a way for businesses to quickly visualize and map out a business model using a one-page document. A few years later, an entrepreneur named Ash Maurya adapted the Business Model Canvas to focus on addressing customer problems and solutions.

In this article, we will discuss the Lean Canvas model and how to use it. But first, we’ll explain what the original Business Model Canvas to help you understand the differences.

What is the Business Model Canvas?

This document is designed to be a visual representation of what you need to make or keep a business successful. It lets you quickly summarize how your business should work based on the information you have. The Business Model Canvas is intended to be a living document that you can easily update on the fly as you test theories and assumptions.

The Business Model Canvas contains the following categories to help you answer important questions about your business:

Value proposition: What value does your product or service bring to the customer?
Key partners: Who are your suppliers and partners?
Key activities: What do you need to do to make this business model work?
Key resources: Who or what are the most important assets that you will need to make this model a success?
Customer relationships: What will your relationship with customers and potential customers be?
Customer segments: Who will buy your product?
Channels: How will you reach your chosen customer segments?
Cost structure: What costs will you incur to operate your business model?
Revenue streams: How will you generate revenue from each customer segment?

When would you use a Business Model Canvas?

The Business Model Canvas is useful for strategic planning and can be used to visually focus on the most important elements of your business.

You also may want to use this model to understand your competition. Make a sketch of your competitor’s business plan and examine their strengths, weaknesses, and limitations. This practice allows you to build a model that addresses the areas where the competition is lacking.

What is a Lean Canvas?

A Lean Business Model Canvas, or Lean Canvas, is based on the Business Model Canvas. When Maurya adapted the Lean Canvas, he was looking for a better, faster way to develop and build successful products that address and solve customer problems. The Lean Canvas is more focused on entrepreneurs who are starting a new business.

Like the Business Model Canvas, the Lean Canvas includes nine boxes on a one-page template. At first glance, the Business Model Canvas and the Lean Canvas look exactly alike, but there are key differences, noted below:

This box replaces the key partners section in the Business Model Canvas.

Identify what the problem is. Many businesses fail because they spend too much time, money, and resources on building the wrong product. You need to understand the customer’s problem first. To get started, list your customers’ top three problems and then list alternatives that may already exist that these customers use to solve these problems today.

This box replaces the key activities section in the Business Model Canvas.

After you have identified each problem, outline possible solutions you can use to solve them. These solutions can include new products/services and improvements to existing products.

Unique value proposition

Develop a message that is compelling, clear, and concise. This message should be able to turn unaware visitors into interested prospects.

Use this box to list what you propose to offer customers, and the value that this offering will provide. Think about what makes your offering different from others who are trying to solve the same problems.

Unfair advantage

This box replaces the customer relationships section in the Business Model Canvas.

This is where you identify your competitive advantage, the differentiator that makes your product or business unique and that is not easily copied.

Customer segments

You must understand who your customers are. You can’t know what they need or what their problems are if you don’t know who they are.

Describe your target audience and define what your relationship will be with them. You may have many customer segments, and you need to realize that they are tied together with their problems. You may need to think of problems and customers at the same time.

Key metrics

This box replaces the key resources section in the Business Model Canvas.

Metrics are a way to measure performance and to monitor progress toward achieving your business goals. List current numbers that describe how your business is doing today.

In addition, you may want to define the key metrics that you will use as indicators to measure future success. For example, how many units of a product need to be sold in order to earn a profit?

What channels will you use to reach your customers? List the marketing and advertising methods that you will use, such as print, radio, SEO, TV, and so on.

Cost structure

You have to spend money to make money. This section is where you list the costs that your business will have in order to develop and market your product, including research, technology, human resources, and so on. Be sure to include one-time and recurring costs.

Revenue streams

In this box, you will list where your money is going to come from. How are you going to price your product or service to ensure that you make a profit? You need to consider how much people are willing to pay and what the minimum is that you can charge in order to make a profit.

When would you use a Lean Canvas model?

The Business Model Canvas approaches business planning from a strategic angle. The Lean Canvas shifts to a problem/solution paradigm, which allows you to focus more on addressing customer needs. This is a good tool for startup businesses and entrepreneurs to use. Once you identify your customers and their problems, you can find solutions, describe value propositions, define your revenue streams, and so on.

How do you make a Lean Canvas model?

The best place to start working on a Lean Canvas is Lucidchart, where you can find a template to meet your needs. After you’ve opened a blank canvas, how do you fill it out? What is the correct order to use when filling in the boxes?

Ash Maurya, the person who developed the Lean Canvas, says that people frequently ask him, “Why isn’t the Lean Canvas laid out more logically?” According to Maurya, the main reason for the Lean Canvas layout was legacy. Instead of completely changing the layout of the original Business Model Canvas, Maurya chose to adopt a self-imposed design constraint where he replaced existing boxes with new boxes (for example, Problems replaced Key Partners).

If you have never filled out a Lean Canvas before, you might think that you should fill out the canvas from left to right. However, Maurya has suggested the following order:

Over the years, Maurya has tweaked his suggested fill order in an effort to get a better flow. When asked which fill order is correct, his answer is simple: There isn’t one.

You may want to start with a suggested fill order until you have a better idea of what works best for you and your company. For some plans, it may make more sense to start with identifying your customer segments and then moving on to your customer’s problems. Other times, it may be more appropriate to start with the problem that needs to be addressed.

However you decide is the best way to fill out your Lean Canvas model, be sure you work with Lucidchart. Start out with one of our templates to flesh out your ideas and to collaborate with team members.

About Lucidchart

Lucidchart, a cloud-based intelligent diagramming application, is a core component of Lucid Software's Visual Collaboration Suite. This intuitive, cloud-based solution empowers teams to collaborate in real-time to build flowcharts, mockups, UML diagrams, customer journey maps, and more. Lucidchart propels teams forward to build the future faster. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit lucidchart.com.

Define your business with a strategy mapping template.

Learn how you can use a strategy map to turn your organization’s mission and vision into actionable objectives. Includes a free template!

A quick and dirty guide to the Business Model Canvas

Interested in starting a business? Use our Business Model Canvas template to create a visual of how your business should work.

Bring your bright ideas to life.

or continue with

By registering, you agree to our Terms of Service and you acknowledge that you have read and understand our Privacy Policy .

Upmetrics AI Assistant: Simplifying Business Planning through AI-Powered Insights. Learn How

AI ASSISTANTS

Upmetrics AI Your go-to AI-powered business assistant

AI Writing Assist Write, translate, and refine your text with AI

AI Financial Assist Automated forecasts and AI recommendations

TOP FEATURES

AI Business Plan Generator Create business plans faster with AI

Financial Forecasting Make accurate financial forecasts faster

Strategic Planning Develop actionable strategic plans on-the-go

AI Pitch Deck Generator Use AI to generate your investor deck

See how it works →

AI-powered business planning software

Very useful business plan software connected to AI. Saved a lot of time, money and energy. Their team is highly skilled and always here to help.

- Julien López

BY USE CASE

Starting & Launching a Business Plan your business for launch and success

Validate Your Business Idea Discover the potential of your business idea

Secure Funding, Loans, Grants Create plans that get you funded

Business Consultant & Advisors Plan seamlessly with your team members and clients

Business Schools & Educators Simplify business plan education for students

Students & Learners Your e-tutor for business planning

Sample Plans
WHY UPMETRICS?

Reviews See why customers love Upmetrics

Customer Success Stories Read our customer success stories

Blogs Latest business planning tips and strategies

Strategic Planning Templates Ready-to-use strategic plan templates

Business Plan Course A step-by-step business planning course

Ebooks & Guides A free resource hub on business planning

Business Tools Free business tools to help you grow

Lean Canvas

The Lean Canvas is a version of the Business Model Canvas and it is specially designed for StartUps and Entrepreneurs. The Lean Canvas focuses on addressing broad customer problems, solutions, key metrics, competitive advantages and delivering them to customer segments through a unique value proposition .

It is also called a one-page business plan template. It was adapted from Alex Osterwalder’s Business Model Canvas by Ash Maurya and optimized for the Lean Startup methodology with an emphasis on finding customer problems worth solving — specifically by building a solid foundation on the customer, problem, and solution assumptions before anything else. Lean Canvas promises an actionable and entrepreneur-focused business plan. It focuses on problems, solutions, key metrics, and competitive advantages.

How to use this canvas?

Ash Maurya has explained the customer-centric approach about using the Lean Canvas as follow (You need to follow sequence) :

1. Customer Segment

As this canvas is targeted at StartUps and the early adopters that first need to be reached, you have to outline an identifiable early adopter group that is part of the overall customer segment you think you should be targeting. This is in all canvases, but in this variant narrowed down. While writing this section you also have to consider writing the Problem section, because the “Problem-Customer” pair usually drives the rest of the canvas which is why you should tackle them together.

Along with the Customer-Segment section you need to describe the Problem section. The focus in Lean StartUps and in this canvas is identifying problems worth solving. In this section, you list the three main problems you intend to solve. This element was added to address the nature of startups; ‘ most startups fail , not because they fail to build what they set out to build, but because they waste time, money, and effort building the wrong product.’

2. Unique Value Proposition

Dead-center in the Lean Canvas is a box for your Unique Value Proposition (UVP). This is one of the most important boxes on the canvas and also the hardest to get right. Your compelling promise or offer that is solving the number 1 problem, includes a finished story benefit value after a job done. This element is included in all canvases.

3. Solution

This is how you intend to deliver value. The solution is what most entrepreneurs and product developers are most passionate about. You are now ready to tackle solution possibilities. As all you have are untested hypotheses, I don’t recommend getting carried away with fully defining a solution just yet. Rather simply sketch out the top features or capabilities next to each problem. Bind a solution to your problem as late as possible.

4. Channels

The good news is that following a “Customer Discovery/Interview” process forces you to build a path to customers early. Unfortunately, unless you are in a direct sales business, that path may not scale beyond Problem/Solution Fit. In short describe your Marketing Strategies, Pricing Strategies , and any other strategy that leads you towards your customers.

5. Cost Structure

Describe fixed, variable , and direct costs associated with your StartUp. You can also Calculate your BreakEven point put it here.

6. Revenue Streams

How do you make money? List your sources of revenue.

7. Key Metrics

Find the key number that tells you how your business is doing in real-time before you get the sales report.

8. Unfair Advantage

This is usually the hardest section to fill which is why I leave it for last. Most founders list things as competitive advantages that really aren’t. A real unfair advantage is something that cannot be easily copied or bought. You may initially have to leave this box blank but it’s here to have you really think about how you can make yourself different and make your difference matter.

The Lean Canvas is a version of the business model canvas and it is specially designed for StartUps and Entrepreneurs. The Lean Canvas focuses on addressing broad customer problems, solutions, key metrics, competitive advantages and delivering them to customer segments through a unique value proposition .

View All Canvas Templates

Write your business plans 2x faster & simpler!

15 Day Money Back Guarantee

Capture Your Business Model on One Page

Popular templates.

An Introduction To Lean Canvas – Business Model Design

Words by: Steve Mullen | Filed under: Attract , Build Authority , business model design

Introduction to Lean Canvas - Lead Flow Method - Business Model Design

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. Having the Lean Canvas as a visual guide made this part “communicating the model/idea” so much more effective — and I think the most valuable function of the tool.

The problem with business plans for startups & entrepreneurs are that they’re a waste of time, don’t get me wrong a well-researched business plan is important but only at the right stage of your business (usually when you’re in growth/investment).

This quote from Steve Blank sums up this point in case: “Business Plan: a document investors make you write, that they don’t read”.

The key fundamental to Lean methodology is the elimination of waste — this includes time, processes, inventory and more. So as a lean startup you need a quicker way to get ideas out of your head, you need to stay lean & avoid waste — so, it’s time to introduce Lean Canvas.

Before we jump into the Lean Canvas it’s important to point out that Lean Canvas has been adapted by Ash Maurya from the very popular Business Model Canvas by Alexander Osterwalder.

Lean Canvas by Ash Mauyra

https://www.youtube.com/watch?v=7o8uYdUaFR4

Lean Canvas uses the same 9 blocks concept except they’ve been modified slightly to suit the needs/purposes/requirements of a Lean Startup. The Lean Canvas is the perfect one-page format for brainstorming possible business models, the blocks guide you through logical steps starting with your customer problems right through to your unfair advantage (often the hardest block to answer).

Blank Lean Canvas:

Source: Running Lean

Here is a quick explainer of each Lean Canvas block (and in the order to go through them):

Each customer segment (CS) you are thinking to work with will have a set of problems that they need solving. In this box try listing the one to three high priority problems that you CS has. Without a problem to solve, you don’t have a product/service to offer.

2. Customer Segments

The problem and Customer Segments can be viewed as intrinsically connected — without a CS in mind you can’t think of their problems, and visa versa.

3. Unique Value Proposition

In the middle of the canvas is the UVP. A value proposition is a promise of value to be delivered. It’s the primary reason a prospect should buy from you. A way to get your head around this is to think about why are you different and why should your CS buy/invest time in you.

Further reading: Useful Value Proposition Examples (and How to Create a Good One)

4. Solution

Finding a solution to the problem is the golden egg! You’re not going to get this right off the first bat — it’s OK, as that’s what Lean is all about. What you need to do is Get Out The Building — a phrase coined by the godfather of Lean Startup, Steve Blanks. And what Blank’s here is that the solution is not in your office, it’s out there in the streets. So go interview your customer segment, ask them questions, and take those learnings. Remember the Lean Startup is validated learning through a continual Build — Measure — Learn feedback loop.

5. Channels

Channels are ways for you to reach your CS. And remember that in the initial stages it’s important not to think about scale but to focus on learning. With that in mind try to think about which channels will give you enough access to your CS at the same time give you enough learning. Channels can be email, social, CPC ads, blogs, articles, trade shows, radio & TV, webinars etc. and BTW you don’t have to be on all of them, just where your CS is.

6. Revenue Streams

How you price your business will depend on the type of model it is, however, it’s quite common for startups to lower their cost, even offer it for free to gain traction, however, this can pose a few problems. The key being it actually delays/avoids validation. Getting people to sign up for something for free is a lot different than asking them to pay. There is also the idea of perceived value.

Further reading: Simple pricing strategies for your products or services, the lean way!

7. Cost Structure

Here you should list all the operational costs for taking this business to market. How much will it cost to build / landing page? What is your burn rate — your total monthly running costs? How much will it cost to interview your customer segment? How much do market research papers cost? etc. You can then use these costs and potential revenue streams to calculate a rough break-even point.

8. Key Metrics

Every business, no matter what industry or size, will have some key metrics that are used to monitor performance. The best way to help with this is to visualise a funnel top down that flows from the large open top, through multiple stages to the narrow end. A good model to help with this is Dave McClure’s ARRRR (aka Pirate Metrics) .

Further reading: Startup Metrics for Pirates

9. Unfair Advantage

This is the most difficult to block to answer. However, do try to think about this as having an unfair advantage can help when it comes seeking partners & investors. Here is a great definition of unfair advantage : “The only real competitive advantage is that which cannot be copied and cannot be bought.” — Jason Cohen. Unfair advantage can be insider information, a dream team, getting expert endorsements, existing customers etc. So rather than think about adding something like “commitment and passion” as an unfair advantage (because it is not), think about what you have that no one else can buy.

Completed Lean Canvas:

Lean Canvas - Leadify - Digital Marketing Training

[image source: Ian Fitzpatrick ]

The idea here is to spend around 15–20 minutes to get that idea down on to paper. Some people prefer to project the PDF onto a wall and use sticky notes to add their ideas into the boxes. But I’ve become so used to Lean Canvas that I sketch my business model ideas directly into my notebook.

Now that you have your first Lean Canvas, the key is to test. Ash encourages you to try as many iterations of the first canvas as possible and to test each one after which a winning business model will emerge. Sounds like hard work? Well yes, it is. But going through this process will save you time, energy and money. Think about it: the worst possible outcome for any entrepreneur is to build something that no one wants!!

The Lean Canvas

As a business entrepreneur, it’s your duty to get ideas out of your head onto paper so that others can see and help build the problem solution. Traditional business plans are not relevant in the ideation stage, they take too much time and are usually created without any validated learning. Business plans are more suited to once you have a business running and are looking to scale.

During the ideation stage try to stay lean, use the Lean Canvas to get your ideas down and use lean principles to test your hypothesis by getting out the building.

It is my wish that this introduction to Lean Canvas has helped spark an idea, or given some inspiration to startup. I have linked to all sources — I follow these blogs and I recommend you do too. If this post has got your Lean on 🙂 I’d welcome comments below or you can reach out to me through my Twitter @leadflowmethod

I’d like to close off by thanking Ash Maurya for his excellent thinking behind Lean principles and I would highly recommend you visit his LeanStack blog and buy his Running Lean & Lean Analytics books – both are excellent.

As always, to your success.

Steve Mullen Digital Marketing Training

8 thoughts on “An Introduction To Lean Canvas – Business Model Design”

What page is the “Business Canvas Model” on? The image that is in color.

Hey DG, if you look under the image there’s an image source credit: startitup.co but in responding to you, I thought I’d check the link again and it seems the page is no longer active.

I was going to remove the link but then I recalled a comment posted on Medium where I first published this post. It was from the creator of that completed Lean Canvas, Ian Fitzpatrick (who’s gone on to create giftster.com an awesome start up).

Thanks DG, for your comment!

Thank you for being clean and to the point . Simple with purpose!

You’re welcome, Amanda, and thank you for the comment… glad you enjoyed the post!

hey, how can I help?

You’re welcome Esther… happy planning!!

Lean Canvas

Tools and Methods

Social Business Model Canvas

Submit a Comment Cancel reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Why Lean Canvas versus Business Model Canvas

I cut my teeth on the Business Model Canvas but found it too company-centric versus customer-centric. So I tweaked a few boxes and came up with the Lean Canvas and it took off...

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 the time to outline the thought process that went into creating Lean Canvas.

First, a quick timeline.

May 2010 I was first exposed to the Business Model Canvas through Alex Osterwalder’s book: “Business Model Generation.” While I found the book beautifully illustrated, I originally dismissed the canvas approach as “too simple.” Many of the examples in the book illustrated the business models of well-known companies like Apple and Skype — after they were successful. I was more interested in the “learning” that got them there.

Jun 2010 It was not until I saw fellow entrepreneur Rob Fitzpatrick’s variation ( Startup Toolkit ) that incorporated Steve Blank’s worksheets from “The Four Steps to the Epiphany” that I took a more serious look at the canvas. I had been using Steve Blank’s worksheets and struggled to keep them updated. The thought of capturing business model hypotheses on a single page seemed killer. I modeled my existing products at the time using both canvases, which prompted me to do some tinkering of my own that I’ll describe below.

Aug 2010 I shared my adaptation (Lean Canvas) in a post I published: “ How I Document My Business Model Hypotheses .” This post quickly became one of my top posts of all time. I started using and testing Lean Canvas with other startups in my workshops and was particularly encouraged by its ability to enable more learning versus pitching conversations.

Sep 2010 I recruited the help of other entrepreneurs to start building an online version of Lean Canvas with the initial goal of facilitating more of these learning conversations in my workshops and subsequently opening it up to everyone.

Feb 2011 Lean Canvas also became a critical part of the methodology described in my book: Running Lean — first self-published as an ebook in February 2010, now being republished as a second edition O’Reilly title in March 2012.

Design Goals

My main objective with Lean Canvas was to make it as actionable as possible while staying entrepreneur-focused . The metaphor I had in mind was that of a ground-up tactical plan or blueprint that guided the entrepreneur as they navigated their way from ideation to building a successful startup.

I had already been working with Lean Startup principles, which had a big influence on the design.

“Startups operate under conditions of extreme uncertainty.” - Eric Ries

My approach to making the canvas actionable was capturing that which was most uncertain, or more accurately, that which was most risky .

Uncertainty The lack of complete certainty, that is, the existence of more than one possibility.

Risk A state of uncertainty where some of the possibilities involve a loss, catastrophe, or other undesirable outcome.

- Douglas Hubbard

I found the initial Business Model Canvases I created back in August 2009 missing things I’d consider very high risk, while other things on the canvas didn’t register as high enough risk. Because the canvas is already quite space-constrained, it was important to maximize the signal-to-noise ratio. So I started trading boxes.

Here’s what I added:

Problem Most startups fail, not because they fail to build what they set out to build but because they waste time, money, and effort in building the wrong product. I attribute a significant contributor to this failure to a lack of proper “problem understanding” from the start.

“A problem well stated is a problem half-solved.” - Charles Kettering

That is why I chose to make the “Problem” box explicit and not a derivative of something else like Value Proposition.

Solution Once you understand the problem, you are then in the best position to define a possible solution. That said, I purposefully wanted to constrain entrepreneurs (through the use of a small box on the canvas) because the solution is what we are most passionate about. Left unchecked, we often fall in love with our first solution and corner ourselves into legacy. Keeping the solution box small also aligns well with a “Minimum Viable Product” (MVP) concept.

Key Metrics Startups often drown in a sea of numbers in an attempt to bring order to the chaos of uncertainty. At any given point in time, though, there are only a few key actions (or key macro metrics) that matter.

“A startup can only focus on one metric. So you have to decide what that is and ignore everything else.” - Noah Kagan

How is this a risk? Failure to identify the right key metric can be catastrophic — leading to wasteful activities like premature optimization or running out of resources while chasing the wrong goal. Initially, these key metrics should center around your value metrics, and later they shift toward your key engines of growth.

Unfair Advantage This is another name for competitive advantage or barriers to entry often found in a business plan. I was cognizant of the fact that few startups have a true unfair advantage on day one, which means this box would be blank.

“A true unfair advantage is something that cannot be easily copied or bought.” - Jason Cohen

This box wasn’t intended to discourage you from moving forward on your vision but rather to continually encourage you to work towards finding/building your unfair advantage. Once a startup achieves some level of initial success, competitors and copy-cats will inevitably enter the market. If you don’t have a defense against them, you stand a real risk of being made extinct by these fast-followers.

Adding four new boxes meant I needed to take out four other boxes.

why lean canvas vs business model canvas

“Perfection is achieved, not when you have nothing left to add, but nothing left to take away”. - Antoine de Saint-Exupery

Here is what I took out:

Key Activities and Key Resources I felt both these boxes were more “outside-in” (versus entrepreneur) focussed, i.e., they helped outsiders looking in to understand what the startup did. I found myself listing things here like “Customer Development,” “Software Development,” “Developers,” etc., that didn’t register high enough on risk to warrant keeping them.

I also found some overlap with the boxes I already added:

I believe Key Activities can and should be derived from the Solution box after the MVP has undergone some initial testing/validation.
Building products today aren’t as (physically) resource-intensive as they used to be. With the advent of the Internet, Open Source, Cloud computing, and globalization, we need fewer resources than ever to get a product to market — making Key Resources align more closely with Unfair Advantage. But while a Key Resource can be an Unfair Advantage, not all Unfair Advantages are Key Resources.

Customer Relationships I advocate starting every product (no matter what you are building) with a direct customer relationship (through customer interviews/observation) and then identifying the appropriate path to customers given your Solution and Customer Segment. This seemed better captured by the existing Channels box.

Key Partners I’ll admit this was the hardest one to remove and the one that created the most discussion. Yes, success for some types of products is predicated on first establishing the right key partners. For example, building a global solar energy grid (platform) that has huge capital and regulatory requirements would probably require establishing key partnerships in place first. But I’d argue that most products do not fall into this category.

When you are an unknown startup with an untested product, pursuing key partnerships from day one can be a form of waste.

Over time, partners can become critical to optimizing your business model . Still, the risk here isn’t the lack of partners but can rather be traced back to inefficiencies in Cost Structure and distribution Channels for which those two boxes fit the bill.

SHARE THIS ARTICLE ON:

CONTINUOUS INNOVATION FOUNDATIONS

You'll receive one short email every three days for a month and get access to the online Lean Canvas tool. You can unsubscribe anytime.

The Key Business Model Canvas Metrics To Track

by Travelpreneur Tribe | Aug 16, 2022 | 0 comments

Business model canvas. You surely have heard that one before. You probably know how to use one, but how do you manage the business model canvas metrics? How can they help your business? Well, in this article, we’ll talk about the business model canvas key metrics, for different types of businesses. Are you ready? Let’s go then.

What is the business model canvas?

Before we get to the metrics, let’s explain more about the business model canvas. As we mentioned in our previous blog , the Business Model Canvas (BMC) is a tool that enables you to visualize, design, and update your business model as you go. It helps you identify key elements of your business to develop a clear view of your value proposition. You can also get a clear picture of your operations, customers, and finances. The BMC will help you decide where to focus your time and attention as you start your online business.

Plus, is it only one page long, so you can easily share it with others to get feedback and update as you go? And on top of that, you won’t lose your nerves or hair while doing it.

How to Set the Right Metrics?

Usually, entrepreneurs rely on the industry vertical they are in, like Healthcare, FinTech, BioTech, etc. But this approach is wrong!

How you plan to charge your users is the right way to think of metrics. Depending on your business idea, there is 99% that your product will fit in one of these models.

There are a lot of business models, and metrics entrepreneurs should pay attention to. In this article, we will analyze the seven main types of business models. So, let’s discuss these business models and define what metrics you should use in each case.

1. Enterprise-Based Business

An enterprise company sells software or services to other large businesses like Facebook, Google, etc. When you work with enterprises, it means you work in terms of contracts. This means it’s your predominant focus from which you can frame your metrics. Some examples include: Docker, Cloudera, and FireEye

What are the key metrics to track?

Number of bookings

meaning the total number of contracts/commitments your company has;

Total customers,

The total number of unique customers that you get;

Revenue, A value that you get after you provide the required services.

Common mistakes for Enterprise model:

Confusing “Bookings” with “Revenues” and implementing contracts when working with the enterprises. The thing is, startups haven’t delivered any services unless the contract is fulfilled. So, you cannot report the revenue since you haven’t provided any service.

2. Saas (Software as a service) Based Business

The business under this category sells subscription-based licenses for a cloud-hosted software solution. This model will charge users monthly for the provided software.

Examples: Mailchimp, Salesforce, Sendbird.

Key metrics to tracκ:

Monthly Recurring Revenue (MRR), meaning that people like the product and agree to pay for the subscription every month;
Annual Recurring Revenue (ARR) shows the pace of revenue growth compared to the absolute revenue number. It would be best if you tracked this metric in comparison with MRR to conduct the annual situation of the business when it comes to subscribers;
Gross Monthly Recurring Revenue Churn (Gross MRR Churn) — pay attention to this metric if you are at the early stage of your business development and don’t have a large group of customers yet;
Paid Cost to Acquire Customers (Paid CAC) — this metric is for cases when you decide to experiment with advertising and are ready to pay to acquire users.

Common Mistakes for the SaaS model:

It would be best if you did not confuse ARR and ARRR and primarily use them interchangeably. In this case, you won’t have a recurring revenue business if the users do not like the product and are unwilling to pay for a subscription.

3. Subscription-Based Business

A business model similar to a SaaS model but usually has a lower revenue per customer. Examples of companies are Linkedin, Netflix, and any other company generally targeting B2C and offering a cheaper monthly subscription affordable for every customer. The metrics are pretty much the same here in a SaaS model.

Examples: The Athletic, Dollar Shave Club, Netflix

Key metrics to track:

Monthly Recurring Revenue (MRR) — users who are willing to pay to receive the complete set of features of your product;
Compound Monthly Growth Rate (CMGR) — pay attention to this metric since, quite often in a subscription-based company, the subscription revenue is smaller;
MRR Churn — just like at a SaaS company, this metric is essential when you’re in the early stage and have only a few customers. Losing even one or two has a real impact on your revenues;
Paid CAC — this metric is for cases when you decide to experiment with advertising and are ready to pay to acquire users.

Common Mistakes for Subscription model:

Don’t measure CMGR as a simple average, instead use discrete monthly growth rates.

4. Transactional-Based Business

The type of business model that will charge a fee for each transaction.

Examples: Stripe, PayPal, Coinbase, Brex — since these companies use a fee from the user every time they use the product.

Gross Transaction Volume (GTV), Meaning that people like the product and agree to pay for the subscription every month;
Annual Recurring Revenue (ARR): It shows the pace of revenue growth compared to the absolute revenue number. You should track this metric in comparison with MRR to offer the annual situation of the business when it comes to subscribers;
Gross Monthly Recurring Revenue Churn (Gross MRR Churn): You should pay attention to this metric if you are at the early stage of your business development and don’t have a large group of customers yet;
Paid Cost to Acquire Customers (Paid CAC) This metric is for cases when you decide to experiment with advertising and are ready to pay to acquire users.

5. Marketplace-Based Business

A company that acts as an intermediary between two consumers, connecting them to buy or sell a good or service. Examples of companies here include Airbnb, eBay, and Booking.com. Marketplaces connect sellers and buyers to exchange a good or service.

Gross Merchandise Value (GMV) For example, if the user sets a price for a good he wants to rent or sell, from that price, a percentage will go to the marketplace company.
Net Revenue This is the percentage of the GMV that a marketplace company gets in its bank account.
Net Revenue Compound Monthly Growth Rate (Net Revenue CMGR). Since Marketplaces are typically B2C companies, the volume of users matters. That’s why you should always check User Retention because a consumer that only uses the platform once and doesn’t return won’t help your Revenue and your company grow.

Common Mistakes for Marketplace model:

A common mistake for a marketplace business model is blending paid user acquisition with organic user acquisition. If you don’t separate the two metrics, you won’t have a good sense if your growth will be sustainable.

6. E-Commerce Based Business

An E-commerce based business is a company that sells physical goods online. Generally, they manufacture and inventory those goods (an excellent example of this business model is Amazon). In e-commerce, you may make the products, but you can also source them — Amazon does that with some of their effects on the platform.

Monthly Revenue

Since there are no recurring purchases, you only need to track the monthly Revenue.

7. Advertising-Based Business,

An advertising company offers a free service and derives revenue from selling advertisements in the free service. Examples of companies that work on that model are Snapchat, Twitter, and Reddit — platforms that an increased number of users use. They are essential to your company — especially if you are early.

Daily Active Users (DAU) This is the number of unique active users in a 24-hour day, averaged over some time. The users who do not return to your platform are not helping. You need to know how to keep them there.
Monthly Active Users (MAU) is the number of unique active users in one month. How many kept using your platform after day one.
Percentage logged in — users with registered account login and logged out over the same 30-day period.

Common Mistakes for Advertising model:

A common mistake for an advertising company is calculating the retention of their users. Some founders even forget to consider that at some point and regret it.

Focusing on the precise metrics for your business model is critical. These metrics should give you a clear picture of your business structure and goals to achieve. Focus on what metrics you think will be the best option for your business and go for them. I’m curious. Have you ever taken a look at some metrics from your business model canvas? Were you aware of what the business canvas is? Let me know in the comments below and as always, feel free to contact me for any questions you may have.

Grab A Copy of The Business Model Canvas Now

Transform Your Business Operations with These Must-Have Free AI Tools

Mar 18, 2024 | AI Tools , Business , Business Tools , Digital Career , Entrepreneurship , Online Business , online business coach , Service-Based Business , Technology

In today's fast-paced world, staying ahead of the competition is crucial. But how can you do that without breaking the bank? Enter free AI tools, the game-changers that can revolutionize your business without costing a dime. From chatbots that enhance customer service...

From Passion to Profit: 5 Lifestyle Business Ideas You Need to Try

Mar 11, 2024 | Business , business coaching , Digital Career , Digital Nomad , Entrepreneurship , Online Business , online business coach , Service-Based Business , Social Media , Startups , Travelpreneur

Are you tired of the daily grind? Ready to turn your passion into profit? Look no further than the world of lifestyle businesses. In this blog post, we'll explore five innovative ideas that can transform your life and your bank account. From creating bespoke jewelry...

Unlocking the Power: Exploring the Best AI Tools for Upgrading Your Business

Mar 4, 2024 | AI Tools , Business , Business Tools , Digital Career , Entrepreneurship , Online Business , Service-Based Business , Technology

In a world driven by innovation, taking advantage of the potential of AI is no longer a luxury, but a necessity. The right tools can propel your business to new heights, revolutionizing processes and unlocking new opportunities. From intelligent chatbots to predictive...

Submit a Comment Cancel reply

Your email address will not be published. Required fields are marked *

Submit Comment

Business Model Canvas

The Lean Business Model Canvas is a strategic tool that helps entrepreneurs and startups design, analyze, and iterate their business models. It is based on the original Business Model Canvas but incorporates the principles of lean startup methodology, which emphasizes rapid experimentation and continuous improvement.

The Lean Business Model Canvas consists of nine quadrants, each representing a critical aspect of the business model. Let's explore each quadrant:

Problem: This quadrant focuses on identifying the core problems or challenges faced by your target customers. By understanding their pain points, you can develop products or services that effectively address their needs.

Solution: Here, you outline the unique solutions or value propositions that your business offers to solve the identified problems. It involves defining the key features, benefits, or advantages your product or service provides to customers.

Key Metrics: This quadrant highlights the key performance indicators (KPIs) that you will track to measure the success and progress of your business. It helps you identify the most critical metrics that align with your business goals.

Unique Value Proposition (UVP): In this section, you articulate the compelling reasons why customers should choose your offering over competitors. It highlights the unique features, benefits, or value that differentiates your product or service in the market.

Unfair Advantage: Here, you identify the distinctive advantages or resources that give your business a competitive edge. It could include intellectual property, strategic partnerships, access to key distribution channels, or unique expertise.

Channels: This quadrant focuses on the various channels or touchpoints through which you will reach and engage with your target customers. It includes both online and offline channels, such as websites, social media platforms, physical stores, or distribution partners.

Customer Segments: Here, you define the specific customer groups or segments that your business targets. It involves understanding the characteristics, needs, behaviors, and preferences of your ideal customers to tailor your products or services accordingly.

Cost Structure: In this section, you outline the costs associated with operating your business. It includes both fixed and variable costs, such as production expenses, marketing and advertising costs, employee salaries, and other operational expenses.

Revenue Streams: The final quadrant focuses on how your business generates revenue. It involves identifying the different sources of income, pricing models, revenue streams, and potential monetization strategies for your products or services.

Product Management
Meetings & Workshops
Agile Workflows
Team Building

Submit your template →

Do you have a great board to share with the world? We' ll help you turn it into a template to share with the community.

Similar templates

End of the Year Team Retro

Empathy Map

Scrum Accountabilities Game

Lean Startup Canvas

What is a Lean Startup Canvas?

The Lean Startup Canvas (or Lean Canvas) adapts the Business Model Canvas to the Lean Startup method. Created by author Ash Maurya, it’s an ideal tool for entrepreneurs or intrapreneurs looking to formalize a new business idea and iterate on it.

The canvas is made up of nine sections to be completed in the following order:

Identify your target customers
Call out the user problems your product will address
Hone in on your product’s unique value proposition
Illustrate how your product’s features will solve user problems (from Step 2)
Highlight the marketing channels you’ll use to promote your product
Establish your product’s potential revenue streams
Develop your product’s suggested cost structure
Select the key metrics you’ll use to measure success
Identify the unfair advantage your product has against the competition

The Lean Startup Canvas methodology is perfect for launching new and innovative products. It creates a simple, yet comprehensive framework for building a clear vision, establishing a problem-solution hypothesis, and identifying the key metrics that will ultimately be used to measure a product’s long-term success.

It’s important to note that this technique is 100% iterative. Your Lean Startup Canvas should be updated regularly throughout the product development process to ensure that the product hypothesis takes into account everything you’ve learned in between iterations.

What does the Lean Startup method entail?

First introduced by Eric Ries in his best-seller, “The Lean Startup” this methodology was designed specifically to help entrepreneurs avoid wasting time building products that nobody wants. The primary goal of this framework is “to figure out the right thing to build—the thing customers want and will pay for—as quickly as possible.”

The Lean Startup method is built on a feedback loop designed to systematically test your plan, starting with the riskiest hypothesis. This is how this feedback loop works :

Build: This step is about building a basic product that allows you to test various business hypotheses. This product is also called the MVP (minimum viable product) .
Measure: This step is dedicated to gathering and measuring customer feedback to understand how real customers are actually using your product (you built in the previous step).
Learn: In this step, you learn from the data collected and apply those learnings to future iterations of your product. If the data you gathered are not conclusive, you need to pivot.

As a final thought on how to leverage the Build-Measure-Learn feedback look, Ries explains:

“Although we write the feedback loop as Build-Measure-Learn because the activities happen in that order, our planning really works in the reverse order: We figure out what we need to learn, use innovation accounting to figure out what we need to measure—to know if we are gaining validated learning—and then figure out what product we need to build to run that experiment and get that measurement.”

This feedback loop allows you to systematically check and learn the validity of your strategy by taking the riskiest part of your project and testing it against reality. David Bland’s Assumption Mapping framework is an effective way to identify your plan's riskiest assumptions.

The faster you learn about the validity of your idea, the sooner you can adapt it, maximizing your chances to find the right customer segment, problem to solve, and revenue model. "The only way to win is to learn faster than anyone else," wraps up Ries.

As with most frameworks, what matters is how you use it and the actions you take after you fill the canvas. That’s why, among key priorities, you should consider testing the very existence of the customer’s problems for the customer segment you have specified as early adopters. You can rely on proven customer discovery interview techniques to avoid missing far-reaching information.

Some tips from an expert in innovation and entrepreneurship

Franck Debane is an expert in innovation and entrepreneurship. He founded Tango Start , a consulting agency, and recently published Passez en mode startup (translated as Innovate like a startup ). The Lean Canvas is an essential part of his consulting method. Below are his key tips to help you use this tool successfully:

Don’t spend too much time filling in the canvas; 30 minutes to 1 hour should be enough. Keep in mind that what you write is probably false; they are just hypotheses, i.e., what you think it’s true at one point. In any case, you need to test those hypotheses as part of the Build-Measure-Learn feedback look.
The Lean Canvas is a living document that you update according to the project advancement. When you pivot, it means that you change your plan’s hypotheses; therefore, you have to update your canvas.

Suggested resources to learn more about the Lean Startup Canvas

An Introduction to Lean Canvas by Steven Mullen, Sales & Marketing specialist.
Ash Maurya’s detailed ebook How to create your Lean Canvas .
5 Lean Canvas Examples of Multi-Billion Startups by Shymansky Stanislav, seasoned Product Manager at Railsware.
A YouTube video from ChannelX detailing how to fill in the Lean Canvas for a new business idea .

IMAGES

Business Models 101: Canvas and the Metrics Investors Want
What is a Lean Canvas Methodology? » Startup Gippsland
Business Model Canvas: Definition, Benefits, and Examples
Overview of the Business Model Canvas with Templates and Examples
Editable online Lean Canvas examples
Business Model Canvas Explained: Examples And Structure

VIDEO

08 Business Model Canvas Key Resources quicktime
Open Data Business Model Canvas Key Partners
Writing a Business Plan (Lesson 10): Business Model Canvas Overview
Key resources
BMC Part 3
Step 1 for New Business

COMMENTS

What Are Lean Canvas Key Metrics? (And How to Fill the Canvas)
Learn how to fill in Lean Canvas templates with our comprehensive guide to the Lean Canvas key metrics any entrepreneur needs to know about.
Key Metrics Lean Canvas: Understanding the Impact
Incorporating Key Metrics in the Lean Canvas Model is an acknowledgment of the model's adaptability and responsiveness, as startups can promptly adjust their course by interpreting process metrics like lead conversion rates or production throughput. Moreover, key metrics play a pivotal role in demonstrating a startup's potential to investors.
Business Model Canvas: Explained with Examples
Here's a step-by-step guide on how to create a business canvas model. Step 1: Gather your team and the required material Bring a team or a group of people from your company together to collaborate. It is better to bring in a diverse group to cover all aspects.
How To Create A Lean Canvas (With Template and Examples)
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. Explore this template.
Design Your Lean Canvas Model: A Step-by-Step Guide
Estimated reading time: 6 minutes. In the ever-changing world of innovation, a well-defined roadmap is essential to steer a startup towards financial sustainability. The Lean Canvas model does just that - it is a valuable one-page template for brainstorming early-stage business models. It's designed to be an ever-evolving blueprint that ...
Your guide to the Lean Business Model Canvas
Grab our lean business model canvas template and create a new Miro board. You can put as many canvases on one board as you need. Define the product or business idea you're working on, and then fill in the blocks with different types of content. You don't just have to use text — you can also use pictures, videos, and more.
How to Fill In Lean Canvas Template: the Guide to Shaping ...
7. List Key Metrics. Key metrics in the Lean Canvas model is your business bottom line. These are numbers such as downloads, MQLs, SQLs, sales, and other indicators your business requires to prosper. These should be tracked on a regular basis. But don't stop there, always go the extra mile! Estimate your Minimum Success Criteria.
Lean Canvas (2024): How-to & Examples [+ Template]
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.
How to create a Lean Canvas (with template)
The business model canvas focuses on the business aspects. It shows you the fundamental parts of keeping your business running. For example, it addresses the key activities, partners, and resources. Such elements relate to running a business and not bringing an idea to life. A Lean Canvas focuses on an idea and its characteristics.
What is Lean Canvas?
Lean Canvas is a one-page business model developed by Ash Maurya. It is designed to replace the traditional and often complex business plan with a more concise and focused approach. ... The key metrics component of Lean Canvas emphasizes the identification of crucial data points that are essential for measuring progress. By tracking and ...
What is a Lean Canvas? Definition, Methodology, Examples and Use Guide
The Lean Canvas is an adaptation of the business model canvas that is optimized for the "lean startup methodology", a technique that is crucial in understanding the possibilities of the Lean Canvas. The Lean Canvas typically consists of nine key elements: 1. Problem: This section outlines the specific problem or pain point that your product ...
How to Make a Lean Canvas Model
Like the Business Model Canvas, the Lean Canvas includes nine boxes on a one-page template. At first glance, the Business Model Canvas and the Lean Canvas look exactly alike, but there are key differences, noted below: Problem. This box replaces the key partners section in the Business Model Canvas. Identify what the problem is.
What is a Lean Business Model Canvas? Definition and Its Benefits
The Lean Business Model Canvas, also known as the Lean Canvas, was created by Ash Maurya as a more streamlined and focused version of the original canvas. It is particularly well-suited for startups and early-stage businesses aiming to iterate and validate their business ideas and strategies quickly. The Lean Canvas emphasizes the key ...
Lean Canvas
The Lean Canvas allows you to map out the key foundations of your startup. It prompts you to analyze and prioritize your goals during the early stages of your business. From the problem to key metrics, the Lean Business Model helps you build the logic that will help your business foundations be stronger. 2.
The Lean Canvas
The Lean Canvas is a version of the business model canvas and it is specially designed for StartUps and Entrepreneurs. The Lean Canvas focuses on addressing broad customer problems, solutions, key metrics, competitive advantages and delivering them to customer segments through a unique value proposition. It is also called a one-page business ...
An Introduction To Lean Canvas
8. Key Metrics. Every business, no matter what industry or size, will have some key metrics that are used to monitor performance. The best way to help with this is to visualise a funnel top down that flows from the large open top, through multiple stages to the narrow end. A good model to help with this is Dave McClure's ARRRR (aka Pirate ...
Lean Canvas
When the Business Model Canvas was introduced, all examples shown were business models from existing and mature businesses. Therefore Ash Maurya redesigned it and created the Lean Canvas that is more actionable and entrepreneur-focused.. The Lean Canvas includes aspects for startups to deal with uncertainty and risk. He added the elements Problem and Solution as well as Key Metrics and Unfair ...
How to Test and Track Your Business Model Canvas
1 Lean Canvas. One of the first steps to measure and track your BMC is to convert it into a lean canvas, a variation of the BMC that focuses on the problem-solution fit and the product-market fit ...
Business Model Metrics and KPIs
Cost Of Cash And Product. Profitability. Contract Status. Conclusion. Read an excerpt from this Business Model Metrics and KPIs Super Guide: "To conduct an accurate analysis of the success of your business, you will need to put into place a set of indicators that can be quantified. And that's what business metrics are: They are quantifiable ...
Why Lean Canvas versus Business Model Canvas
ASH MAURYA. BUSINESS-MODELING. 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 the time to outline the thought process that went into creating Lean Canvas. First, a quick timeline.
The Key Business Model Canvas Metrics To Track
As we mentioned in our previous blog, the Business Model Canvas (BMC) is a tool that enables you to visualize, design, and update your business model as you go. It helps you identify key elements of your business to develop a clear view of your value proposition. You can also get a clear picture of your operations, customers, and finances.
Business Model Canvas Template
The Lean Business Model Canvas is a strategic tool that helps entrepreneurs and startups design, analyze, and iterate their business models. It is based on the original Business Model Canvas but incorporates the principles of lean startup methodology, which emphasizes rapid experimentation and continuous improvement. ... Key Metrics: This ...
Lean Startup Canvas
The Lean Startup Canvas (or Lean Canvas) adapts the Business Model Canvas to the Lean Startup method. Created by author Ash Maurya, it's an ideal tool for entrepreneurs or intrapreneurs looking to formalize a new business idea and iterate on it. The canvas is made up of nine sections to be completed in the following order: The Lean Startup ...
What Is a Successful Business Model? Exploration and Measurement of Key
Metrics and citations; ... Identifying five key business model attributes managers believe are the most important and can bring competitive advantage and excellent performance to enterprises. ... Reconstruction of the "new retail" business model under the modern value chain—The nine elements canvas based on "Hema Fresh". Enterprise ...

Business Model Canvas: Explained with Examples

What is a Business Model Canvas

What Are the Benefits of Using a Business Model Canvas

How to Make a Business Model Canvas

What are the Key Building Blocks of the Business Model Canvas?

Customer Segments

Value Propositions

What to Avoid When Creating a Business Model Canvas

What Are Your Thoughts on the Business Model Canvas?

FAQs About the Business Model Canvas

More Related Articles

How To Use the Lean Canvas Template for Business Model Development

Key Metrics

Unique Value Proposition (UVP)

Customer Segments

Cost Structure

Revenue Streams

What are the benefits of using the Lean Canvas?

Tools to create a Lean Startup model

Leantime Features Include

In Summary – Optimize Business Development with the Lean Canvas

Frequently Asked Questions

Jenny Jackson

Support Leantime

How to Fill In Lean Canvas Template: the Guide to Shaping Your Startup Idea into Product

What is Lean Canvas?

Why Lean Canvas is Essential for Any Startup?

Lean Canvas Template [available online + Lean Canvas PDF]

The Ultimate Guide to Fill in Lean Canvas in 20 Minutes

2. Define the Problem Your Product Solves

3. Decide on Revenue Streams

4. Provide Solution

5. Write down Unique Value Proposition

6. Find Effective Channels

7. List Key Metrics

8. Estimate Cost Structure

9. Create Unfair Advantage

Bottom Line: Get Structured

FAQ: Lean Canvas Template

Million Dollar Journey

Lean Canvas (2024): How-to & Examples [+ Template]

Gust de Backer

What is a Lean Canvas

Why use the Lean Canvas?

1. Customer Segments.

Early Adopters

Existing Alternatives

3. Unique Value Proposition

High-Level Concept

4. Solution

5. Channels

6. Revenue Streams

7. Cost Structure

8. Key Metrics

9. Unfair Advantage

Good choice! Check your e-mail for the resources...

Lean Canvas example

Now it’s your turn…

Frequently Asked Questions

Business Model Canvas | Business Strategy | Lean Canvas | Marketing and Sales | Pricing Strategy | Problem-solution Fit | Product-market Fit | Revenue Models | TAM SAM SOM Model | Treacy and Wiersema | Value Proposition Canvas

OGSM Model (2024): How-to & Examples [+ Template]

Rapid Experimentation: The Road To Innovation (Complete Guide)

Cognitive Biases (2024): Complete List of 151 Biases [Psychology]

Submit a Comment Cancel reply

You have Successfully Subscribed!

Advisory boards aren’t only for executives. Join the LogRocket Content Advisory Board today →

How to create a Lean Canvas (with template)

What is a Lean Canvas?

1 . Customer segments

2 . Problem

Over 200k developers and product managers use LogRocket to create better digital experiences

3 . Unique value proposition

4. Solution

5 . Channels

6 . Revenue streams

More great articles from LogRocket:

7 . Cost structure

8 . Key metrics

9 . Unfair advantage

Identify your assumptions