Lean Canvas Definition
Using a business model framework is critical to creating an organization’s strategy, but it can also be tweaked to help solve important problems within a business. The Lean Canvas helps teams solve complex problems by finding solutions through a modified business model canvas.
The Lean Canvas template allows you to frame your business model as a problem-solving strategy to help deliver value to customers. Using this template helps clarify the value proposition behind your vision and makes creating and communicating your business plan easier compared to a traditional business model. By deconstructing conventional business plans into their most essential assumptions & values, the Lean Canvas takes a direct approach to diagraming a solution.
Although they address a similar situation, the Lean Canvas template differs from a business model canvas. We will elaborate on this later in the article, but the main difference is a Lean Canvas is focused on problem-solving, while the business model canvas helps plan the logistics behind a business’s success.
The Lean Canvas template was developed by Ash Mayura to help startups target broad problems and find valuable solutions. In its creation, it’s easy to see how it might take a different angle on business planning than a business model canvas, which was created to help translate a traditional business model.
Lean Canvas Template
The Lean Canvas helps identify your business model’s biggest strengths and weaknesses and breaks down how your specific solution meets customer needs. Here is a breakdown of how to use the template.
Problem
Questions to ask: What is the problem you’re looking to address? How big of an issue is it, and who does it affect? Are people currently paying to find a solution?
The first step in creating a Lean Canvas template is diagramming the problem you’re solving. Think about the root issue customers face and why it continues to be a pain point in their lives. Having a shared understanding of the problem is a key step to developing a sustainable solution.
Solution
Questions to ask: What does your product/service do? How does it provide a unique solution to the customer’s issue? What specific features contribute to reaching the customer’s goals?
When brainstorming the solution to the customer’s problem, think about how your solution helps them reach their goals more efficiently. Try framing your solution in terms of the customer’s goals rather than their problems to see how your solution differs from the competition.
Value Proposition
Questions to ask: What is your unique value proposition? How do you stand out? What makes your solution special relative to the competitive ecosystem?
The value proposition is slightly different than the solution and should focus on why your solution is important rather than what your solution does. Think about how you separate yourself from the competition by providing unique value to the customer.
Advantage
Questions to ask: What is your competitive advantage? Why are you uniquely equipped to tackle the problem? How can you maintain your competitive advantage in the future?
This section forces you to think about the reasons your solution is better than one that currently exists. You can approach this section from multiple angles by discussing why your business is special, why your solution is special, or why the gap in the market is unique. All of these things can contribute to your competitive advantage.
Segments
Questions to ask: Who is your ideal customer? What groups of people does your solution benefit? How do these people connect to the problem?
Understanding your customer segments is crucial to developing a targeted business model. This section allows you to expand on your target market to better understand who benefits most from your solution. If you need more context into who your specific users are, try using a persona map to diagram your ideal customers.
Metrics
Questions to ask: What are the key metrics to your success? How will you measure your progress?
Defining metrics is important to help understand what’s working and what’s not. This section provides space to diagram what statistics, touchpoints, or responses dictate the success and direction of your solution.
Channels
Questions to ask: How will you get people’s attention? How can you get in the ear of your customer segments? How will customers hear about you?
This section directly relates to your customer segments and focuses on how you will consistently reach and convert potential users. Understanding where your target market is and how to get their attention is crucial to converting them. Whether this is physical advertising, digital promotion, or search engine visibility, you need to know how to get in front of your customers effectively.
Cost Structure
Questions to ask: What is the operational cost of the business? What needs funding in order to succeed?
This section is identical to the business model canvas and focuses on the internal cost structure of your business. Whether you’re diagramming a complete business model or an individual solution, think about the internal operations and how the solution will need to be funded. Where possible, try to identify the partners that make this solution possible to understand exactly what it would cost to get it off the ground.
Revenue Stream
Questions to ask: How will your company create revenue and drive a profit? What’s the pricing structure of your solution?
The revenue stream section focuses on how you will create a sustainable flow of money into the business. It’s important to think about more than one-time payments and focus on how to leverage your solution to create long-term success.
Benefits of Using a Lean Canvas
Using a Lean Canvas for mapping a business model or problem-solving makes communicating and collaborating on your plan extremely easy. Here are some of the advantages of utilizing this template.
Simple to use
One of the biggest advantages of using the Lean Canvas template is it’s incredibly straightforward and easy to use. Unlike a traditional business model or a more complex algorithm, the organization of the template makes it so anyone can quickly pick it up and use it effectively. Additionally, you can easily take advice on filling out the template from this guide or the help sections within Fresco’s board.
The ability to organize and quickly use the Lean Canvas makes it super powerful and gives it the advantage over more traditional formats.
Easy to communicate
While the Lean Canvas template is straightforward, it’s equally effective as a communication tool. This template makes communicating solutions and intent extremely easy, as anyone can pick it up and immediately understand the context of your solution. This makes visual collaboration incredibly easy and allows you to communicate solutions outside your immediate team. Communication is a key part in the success of integrated solutions, and the Lean Canvas template makes sharing your model incredibly easy.
Provides a holistic overview
Instead of focusing on a small aspect of your business, the Lean Canvas template carefully selects elements that build a cohesive picture of your business model, customer segments, and financial plan. With these sections, you can gain a quick overview of your business plan and what the first steps of action might be. This template helps incorporate your vision, goals, and value all into one board.
Focuses on the key problem
Something that other business models miss is a focus on the key problem. The Lean Canvas template focuses on the problem at the center of your customer’s journey and prioritizes solutions that address this issue. By doing this, you can ensure that the solutions you ideate will have a tangible impact on the user’s experience.
Lean Canvas vs. Business Model Canvas
Understanding the difference between the Lean Canvas and business model canvas is quite simple. These two templates are both very effective at planning a business model, but they focus on slightly different areas and provide different advantages. Here is a quick overview of the similarities and differences between the two.
Similarities
The biggest similarity between the two templates is they are meant to plan a business model. They both organize a template into a simple flow that walks you through the necessary elements for creating your business plan. Additionally, they share some of the same sections, including the value proposition, channels, cost structure, revenue stream, and customer segments. These make the templates somewhat similar in direction, but the differences give them slightly different use cases.
Differences
The most significant difference between the two templates is a business model canvas focuses on capturing the elements of a traditional business model on a single board, while the Lean Canvas focuses more on problem-solving. This shift in focus allows for a different emphasis in the collaboration process, which can be seen in the different sections.
The Lean Canvas template replaces the “key partners,” “key activities,” “key resources,” and “customer relationships” sections with “problem,” “solution,” key metrics,” and “competitive advantage.” By doing this, the Lean Canvas template shifts its focus from business infrastructure to problem-solving. This opens up new opportunities to utilize the Lean Canvas template that might not exist for the BMC.
Lean Canvas Example
The example at the top of the page shows how a Lean Canvas template might be filled out for a new platform offering an innovative way to video chat online. Here is how it’s broken down.
The problem customers are facing is their video chats are boring, monotonous, and feel outdated. This leads to them having a worse experience when using traditional chat apps and overall working online.
This problem is remedied by a solution that integrates video calling into the regular everyday environment rather than just for specific events. This makes the interactions more diverse and allows people to collaborate in different ways than before. The value proposition behind this solution is grounded in providing something completely different than anything else on the market and allowing people to explore new ways to communicate online.
This product’s user pool is any remote teams that collaborate frequently, and they’ll reach them through platforms like ProductHunt and social media outreach. They use a traditional SaaS model to drive revenue, and in order to track their success, they will use a couple of key KPIs, including call length, accounts created, and the number of teams using it daily.
We can see that through the Lean Canvas, you can easily map out a business model or any solution to a key customer problem. Use the link above to try this template for yourself!
