How You Can Use the Lean Canvas When Starting a business

How can you transform your idea into an actual business? Going from idea to business is a challenge and honestly is what differentiates a wantrepreneur from an entrepreneur. One of the first steps for transforming your idea into a business is to be able to articulate your business model. This is where the Lean Canvas comes into play. The Lean Canvas is derived from the Business Model Canvas. The Lean Canvas is a 1-page business plan template created by Ash Maurya that helps you deconstruct your idea into its key assumptions. I use the Lean Canvas in two ways: the first one is to help me answer questions and see things that I don’t know or understand yet; the second way is to be able to put in writing my assumptions so I can communicate them with my team and/or test them down the road. Below I’ll go into more detail about how to use this tool to your advantage.

Know what you don’t know

I believe that what kills businesses is not knowing what they don’t know. How can that be? Simple. If you’re preparing to launch a business and know that your competitors are spending $200 per day in your target market, you may be prepared to invest $300 per day until you get enough traction. However, if you are not aware of that fact and do not invest enough, you will not see any traction on your new product and your business may perish. In my experience, when I’m thinking about a business and I don’t have enough background information on that industry, while filling out the Lean Canvas I get several questions that I cannot answer. Answering these questions is going to be crucial if I want to have a successful business. Once I can answer all my questions, I am going to be able to articulate the plan to future stakeholders.

Prevent Business Failure

Your business will fail if any of the following is true: you have a great product that no one wants to buy (no clear customer segment), you have a product that addresses a problem but doesn’t fix it (badly articulated problem), and/or you have a product that solves a problem and people want to buy but can’t articulate the benefits to the customer (value proposition). The Lean Canvas allows you to articulate, identify, test, and change these questions upfront before investing a penny into the business. When I was teaching entrepreneurship, most people could easily answer the solution box on the Lean Canvas but had a really hard time explaining the problem, identifying the customer segment, and articulating the value proposition. Answering these three boxes, I consider, are the most important part of the Lean Canvas. 

As a side note, a customer is someone that pays money for a product, not someone that likes a product. There’s a big difference! 

Articulate Your Mission

Having a clear compelling vision is going to be key to your success. You will need to sell your idea to future team members, investors, and (of course) customers. Having answers to all possible questions will allow you to be confident about your idea but, more importantly, show others that you have thought about everything and allow them to believe in your vision with the same passion that you do. 

The Lean Canvas helps you articulate your mission. After filling out the Lean Canvas, you will realize that you can see who your customers are, what problem they have, how will your product or service impact their lives, how your solution will look like, the ways in which you will make money, how you will measure that you’re on the right track, how you will reach your customers, and your costs along the way. These answers become the basis of your strategic plan.  

Next Steps

Like any plan, the Lean Canvas should be an evolving document. You start with what you know about the market, then you go and test your assumptions and modify the canvas based on what you learn. If you have read The Lean Startup, you will recognize the build-measure-learn cycle in action in this process. The idea is to be certain you know your risks, have validated your assumptions, and can confidently move forward when starting a business.

Entrepreneurial Journey Books

Entrepreneurship is a lifestyle and to excel on it you need to learn and unlearn many things. Below is a list of books that have helped me understand this lifestyle and how to make the most of it. I hope they can help you in your entrepreneurial journey.

Think and Grow Rich by Napoleon Hill

Think and Grow rich was originally published in 1937. Due to this, I originally thought the book was not going to be relevant when I first started reading it. However, after a few pages, you are going to understand why this book is so powerful. To me, it has two main takeaways: the first one is that you can train your mind to think about and attract success. The second, is that you are always going to be right about your entrepreneurial journey; that is, if you think you will succeed or fail, more than likely you will be correct in the outcome. 

The Lean Startup by Eric Ries 

Most people think about building something and people will come. Create a product and people will automatically come and use your product. That is far from the truth. Eric Ries does a great job in explaining the approach he used in creating a successful technology product. The main takeaway from this book is the build-measure-learn loop. Simply put, you can’t improve what you don’t measure. 

The E-Myth Revisited by Michael Gerber

My original thought about this book was that it was not good. One time talking with someone about why they shouldn’t read it, it hit me; it is actually a very good book. The main thing you will learn from this book is to work on the business not in the business. To create a business is to create processes that others can follow and help you achieve your bigger mission.

The 4-Hour Workweek by Tim Ferriss

While I’m not a fan of everything that Tim Ferriss says, once you read The E-Myth, you may be wondering how to make it happen. The 4-Hour Workweek has plenty of examples on how to make this happen. It opens your eyes to the gig economy, how you can participate in it and how to leverage your skills to take your business to the next level. 

The Hard Thing About Hard Things by Ben Horowitz

Once you have a business going. You’re going to find that you have to make many hard, sometimes impossible, decisions. The Hard Things About Hard Things draws from many years of experience to bring a collection of essays that can be exactly what you need to read/understand when facing tough times. 

One last thing, check out this video by Steve Jobs. You probably already know the lesson if you’re reading this post but it’s a short and very important reminder. 

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