Lean Canvas: what it is and how to use it when launching new products

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There are many approaches and models that allow you to think through the stages of creating and launching new products. One of these is the Lean Canvas.

In this article I will talk about what this model is and how to use it.

What is Lean Canvas?

It is a tool that can be used to describe a business model. With it, you can collect basic information about a future startup or product on one page, and then supplement it if necessary. Works great with flexible processes where predicting the outcome is very difficult.

Lean Canvas is based on the philosophy of lean production and is part of the Lean Startup concept. In both cases, the emphasis is on reducing costs and achieving better results while saving resources. Today, this approach is most often used at the initial stages of IT product development and to assess its development potential.

Information is collected in blocks, 9 in total, an example is shown in the image below. Thanks to this solution, all available information can be structured, and this will enable developers and managers to understand the product from all sides and explain its essence to others.

Lean Canvas template for gathering information about blocks

Why is this necessary?

Lean Canvas is necessary both for structuring information and understanding business processes. This model can be used to determine the requirements for launching a viable product. That is, such a table allows you to consider all current problems and gather a complete, realistic picture of the current project.

Benefits

Some of the main advantages of this model are:

  1. Quick filling of the template – on average 20 minutes are spent on it.
  2. Visual demonstration of collected information.
  3. Placement of accents exclusively on important points.
  4. Using a non-standard approach during planning.
  5. Prompt identification of problems and their resolution.
  6. Collection of important information in one place.
  7. Ability to communicate your opinion to others without difficulty.

Using such a template, you simply list all the important points – without water and other excesses. Keeping such a scheme and, if necessary, supplementing it, you will be able to adhere to a clear single concept.

Disadvantages

The Lean Canvas is not a final business plan, so this template will need to be updated on an ongoing basis as the product evolves. Because of this, it will be more suitable for the implementation of startups than for some global idea. That is, you take a simple strategy, then gradually complicate and develop it. As far as startups are concerned, this is probably a plus, but for giants, this option is not quite suitable.

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How to use this model

Everything is simple here – take the aforementioned template and fill it out, answering questions about the product, service or application (see what you produce). But we will talk about which questions belong to which block later.

UNIT 1. Target audience. The first consumers

Here, first determine who is your customer? Exactly what kind of people buy your product and use it. Perhaps you have primary and secondary audiences, for example, when a manager purchases a service and employees already use it. You can also create a portrait of the target audience with basic characteristics.

It is important to define yours the first consumers. They will help in the development and launch process. For example, with their help, you can test some theories, test new functions, and also get feedback on all the necessary points.

UNIT 2. The problem and existing alternatives

It is very important to define the problem, relevant to your target audience This is a need that your product solves, closes. You can focus on Maslow’s pyramid.

Then search alternative solutions, which already exist on the market. Moreover, they can be not only direct, but also adjacent. For example, online stores and marketplaces are almost the same thing. Only the online store belongs to one seller or brand, and anyone can be placed on the marketplace.

Here, by the way, the concept of Jobs To Be Done will also help, which allows you to determine the factors that stimulate people to buy.

UNIT 3. Unique value

Just specify here unique sales offer (USP), What sets your offer apart from others. Think about how your proposed option is better than others, why people will want to pay for it.

UNIT 4. Solution

In this block you show how your development solves the problem of consumers. The block can be constantly supplemented by conducting research, surveys and interviews with representatives of the target audience. Test results will also be useful. And remember – not all hypotheses pass the time test, but there is nothing wrong with that.

UNIT 5. Channels

Here we will talk about where and how you will promote the finished products. Namely, on which platforms to sell and advertise, which tools to use. Choose such channels where your audience “stays” more and more often. Well, you should choose the most acceptable method.

UNIT 6. Income streams

Next, see how you will make profit from its development: whether the product will be paid or free, distributed by subscription, as a free version with limited functionality, and so on. A frequent phenomenon is that the application, which is free for the first few months, becomes paid over time, as soon as it gains the required number of customers. And if you can’t make up your own mind, look at how your competitors are doing.

The most important thing here is that your technology has value that people will be willing to pay for.

How to fill out the Lean Canvas block on sources of income

UNIT 7. Cost structure

You are in this block calculate the amount you need to spend on startup. At the same time, include fixed and variable costs. Based on the calculations and estimating the future cost of services, you will be able to understand how many customers you will need to attract in order to break even.

UNIT 8. Key metrics

Let’s not forget about KPIs! With their help, you will monitor the effectiveness of the results achieved. The choice of certain indicators depends on the specifics of your business. But in any case, they should help evaluate the success of the product, identify the break-even point, and monitor how changes made in the process affect the final sales results. And you can determine the main performance indicators for your business, for example, with the help of the AAARRR marketing pitch.

UNIT 9. Hidden advantage

This is the quality that sets your development apart from others and which is difficult or impossible to copy. For example, a small detail that is not found in other analogues. It can be used in the promotion process.

How to populate the Lean Canvas template

Sequentially, that is, according to the block numbering. Do not pay attention to the chaotic arrangement of them, just do everything in turn. This way, it will be faster and easier for you to see the complete picture of the project.

Such a table is filled quite quickly, so you won’t have to sit over it with a watch. But later it will be necessary to supplement it as you think through the idea and its essence in more detail. It may not be possible to immediately describe some points such as UTP, profit, costs or hidden benefits, so gradually fill in the blocks in which you are more confident.

You can keep such a table both on paper and in electronic format. You can fill it out yourself or with the help of partners, colleagues or friends with whom you plan to implement the idea.

Common mistakes when filling out the Lean Canvas

In the process of filling out the Lean Canvas template, people can make mistakes, mainly due to ignorance of the essence of this approach. The following difficulties often arise:

  • The model is perceived as a business plan. With the help of such a template, it is possible to collect the main hypotheses, which should later be tested and confirmed. This is not a clear plan of action that must be followed.
  • The developer fills out the template independently, alone. It should not be forgotten that any Lean tools are designed to be implemented in a team. They must go through all stages of discussions and statements. And, besides, others have a few relevant ideas or a fresh perspective on the situation.
  • The table lists all possible hypotheses instead of the key ones. It is not necessary to indiscriminately list everything that comes to mind in this scheme. If you want, write these ideas down elsewhere, and then filter them after consulting with partners or colleagues. This is a saving concept, save resources 🙂

What mistakes should not be made when compiling a Lean Canvas

Always rely on facts, verified figures and sources, calculate and recalculate numbers several times if necessary.

Conclusion

So you’ve stopped filling out the Lean Canvas template, now what? Start working on an MVP, that is, create a minimum viable product. This is the version with the most necessary set of functions, in which UTP is implemented and the hidden advantage that you indicated in the table. And then improve your design, adding to the scheme and moving towards the realization of your ideal vision.

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