What is a Lean Startup Canvas?
The Lean Startup Canvas (or Lean Canvas) adapts the Business Model Canvas to the Lean Startup method. Ideal for entrepreneurs or intrapreneurs, the technique is an iterative and learning way of formalizing a new business idea. This canvas includes nine sections that should be filled in the following order:
- Targeted customer segments;
- Problems that your product should resolve for your customers;
- The unique value proposition your offer to your customers;
- The solution you provide to the world (high-level features);
- Communication and distribution channels;
- Revenue streams;
- Cost structure;
- Key metrics to measure success;
- The unfair advantage you have against your competitors.
The Lean Startup Canvas methodology is well suited for entrepreneurs who consider launching an innovative product. It will help them state the hypotheses that underpin their vision and force them to select the key performance indicators that will mean the project has reached success.
As stated at the beginning of the article, this technique is iterative, meaning that The Lean Startup Canvas must be regularly updated to take full advantage of it. As you iterate, you will capitalize on what you have learned between two iterations and get the right information to adjust your hypotheses wisely.
What is the Lean Startup method about?
Introduced by Eric Ries in the best-seller The Lean Startup, this methodology aims to help entrepreneurs not waste their time building products nobody wants. The author aspires to give them a framework “to figure out the right thing to build—the thing customers want and will pay for—as quickly as possible.”
The Lean Startup states that product development should get into a feedback loop with three stages: Build, Measure, and Learn.
- The first stage lies in building a sufficient product that will enable you to test your fundamental business hypotheses. This product is called the MVP (minimum viable product, more about this concept on the User Story Mapping example).
- The second stage is about measuring real data based on the use of your product by real customers.
- The third stage focuses on revealing learnings from the data.
In addition to this three-stage feedback loop, Eric Ries introduces two new complementary concepts:
- A validated learning is a hypothesis that has been validated by the data collected and analyzed between two iterations.
- Innovation accounting is a way to measure how a startup progresses rationally. First, a startup builds an MVP to measure relevant metrics. Then, the product is incrementally upgraded to improve indicators. Up to a few iterations, the startup should reach a critical decision point: pivot, meaning changing strategy, or persevere in the same direction.
To conclude about how to leverage the Build-Measure-Learn feedback look, Eric Ries shares a wise piece of advice: “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.”
Suggested resources to go further
- A great Introduction to Lean Canvas by Steven Mullen, Sales & Marketing specialist
- 5 Lean Canvas Examples of Multi-Billion Startups by Shymansky Stanislav, seasoned Product Manager at Railsware
- A video from ChannelX YouTube Channel presenting a Practical example of filling in the Lean Canvas for a new business idea