Business ModellingFinish your Lean Canvas already

When I talk to founders and product people, I see packed Lean Canvases all the time. When I ask how much time went into it, they say proudly weeks, even months. But also, that they aren’t really satisfied with it and have the feeling, that “it’s not a good plan yet”. They want more focus, it’s not coherent enough or not clear and precise enough. They aren’t ready to move on and don’t have the confidence in this business model to continue with the process.

What a pity! The fastest path to a neat Lean Canvas is to start.

In this article, you’ll learn what the actual purpose of a Lean Canvas is. So you'll know what you need on it to move on, so you could take the next steps.

The purpose of a Lean Canvas

To know when your Lean Canvas is ready, you have to know what it is for. An obvious feature of a Lean Canvas is to neatly and concisely communicate your business model on one page. And that is the reason, why you don’t have the feeling of being finished. It’s so easy! You simply don’t start with a neat business model. It’s a vague guess. You have to develop it. So when you start out, the Lean Canvas has two purposes:

Identifying the riskiest assumptions in your business model

Checking for plausibility

So have a look at your Lean Canvas. And if you don’t have one at the moment, pause here and give yourself 20 minutes to draft one.

I bet it’s messy.

There might be blank fields.

I bet you’re feeling a little bit embarrassed, that this is your current state. And don’t feel bad if you have already been working on your start-up for some while. I’ve worked for two years for a start-up. When I look at the business model today, I can’t believe how little progress we’ve made. We were so busy developing software instead of the business model.

That’s ok. Let’s change it. But not by thinking, but by gathering data! You are going to learn so much and so much faster than by thought experiments.

How much time should you take to fill the Lean Canvas?

20 minutes! Why so little you might think. Because we are entrepreneurs and not scientists. We can’t afford to spend 3 years thinking about our business model. The world is moving too fast and we don’t want to wait 3 years until we try being successful.

So the fastest way to make progress and tangible results is by moving on and gathering data to iterate on your business model. Your lean canvas will become more beautiful and complete in each iteration.

What is the minimum goal?

We’ve identified, that you want to do some experiments to develop your business model / Lean Canvas. What is the prerequisite of doing so? Every successful business model is based on creating, delivering, and capturing value. That means, that you have to create something that is so useful to somebody, that they are willing to pay for it.

The first goal in business model development is always to identify a problem worth solving. So people are willing to pay for your solution. The bare minimum needed to do that is to know who you want to do research about. And that is a quite tricky question. Because you want to identify a customer segment, which has a uniform problem. This is often not the case for a group defined solely by demographics like age or gender. Instead, you want to find some psychographic. Psychographics are characteristics like subconscious or conscious beliefs, motivations, and priorities.

If you don’t know any psychographics do a thought experiment. First brainstorm 2-3 problems you want to dig deeper into. Then try to identify a subgroup by asking the following questions:

• Within this group, which type of person has this problem the most?
• Is everyone within this group really trying to solve this problem?
• Why does this sub-set have this problem more? Is there another more specific problem?
• What is the motivation to solve this problem? Does everybody in the whole group has this motivation? Why not?
• What additional motivations are there?

If you want to do quantitative experiments like prototypes (aka Fake Door MVP), you have to have a specific solution and value proposition as well. Check if they really fit with the problems. Do a marketing one-liner for a sanity check:

Have you had <PROBLEM>? I do <MY SOLUTION> to solve it.
This results in <SUCCESS THE CUSTOMER WANTS>.

Check if the success is really linked to the problem.

Conclusion

To sum it up real quick: You should invest 20-60 minutes max in the first version of your Lean Canvas. This version of the Lean Canvas is just a starting point for conducting experiments. To do them efficiently you need to know how you reach your customers. So the customer segment has to be specific enough for that. Additionally, you should have an idea of 2-3 top problems you want to investigate.

If you aren’t familiar with this customer segment, don’t worry: It’s just a starting point and you’ll get there. If you worry about missing a much more viable problem, remember that you want to act fast and don’t want to end up in analysis paralysis. If you can't get rid of the feeling, that you are missing a more valuable problem, do the following. Draft multiple narrow Lean Canvases with all problems you could think of. Focus on the fields customers, problem and solution. Then you could prioritize these Lean Canvases and start with the first one.

Get my next article by subscribing to my mailing list: Define your first experiment for finding the customers to your solution.