What is a Lean Canvas?
Lean Canvas is a 1-page business plan template created by Ash Maurya that helps you deconstruct your idea into its key assumptions. It is adapted from Alex Osterwalder's Business Model Canvas and optimized for Lean Startups. It replaces elaborate business plans with a single page business model.
- Fast
- Compared to writing a business plan which can take several weeks or months, you can outline multiple possible business models on a canvas in one afternoon.
- Portable
- A single page business model is much easier to share with others which means it will be read by more people and also more frequently updated.
- Concise
- Lean Canvas forces you to distill the essence of your product. You have 30 seconds to grab the attention of an investor over a metaphorical elevator ride, and 8 seconds to grab the attention of a customer on your landing page.
- Effective
- Whether you're pitching investors or giving an update to your team or board, our built-in presenter tools allow you to effectively document and communicate your progress.
What is the Right Fill Order for a Lean Canvas?
A question I get a lot is: Why isn’t the Lean Canvas laid out more logically? Anyone that has attempted to fill one can relate. You have to jump around from box to box in a seemingly random order.
The main reason for this particular layout was legacy. Lean Canvas was derived from the Business Model Canvas. And instead of changing the canvas layout, I chose to adopt a self-imposed design constraint: Every time I added a new box (like Problem), I’d remove an old box (like Key Partners).
To compensate for usability, I published a suggested fill order in my first book: Running Lean.
Over the years, however, I found myself tweaking this fill order for better flow. While starting with customers and problems was always the common thread, the ordering of the other boxes changed ever so slightly.
The original question then morphed into: Why is there a different suggested fill order across your books and the online app? Which is the right order?
After years of coaching and reviewing of thousands of Lean Canvases, I have finally uncovered the right fill order and I’m ready to reveal it.
Are you ready? Wait for it…
There is none.
Good ideas can come from anywhere
I made a short list of idea sources recently:
1. Scratch your own itch
2. R&D/Invention
3. Analogs
4. Accidental discovery
5. Customer requests
6. External changes
7. Growth Directive
8. Exploit an Unfair Advantage
9. Innovation Theory
As you can see from this list, ideas (yes, even good ones) can come from anywhere. The best way to find a good idea is to have lots of them.
Idea generation doesn’t have to start with customers and problems.
The real challenge, however, isn’t with idea generation, but idea validation.
While idea generation shouldn’t be constrained with a fill order, there is an optimal ideal validation order.
An effective validation plan prioritizes the testing of your riskiest assumptions first. How do you uncover your riskiest assumptions? This is where a Lean Canvas, properly used, can help.
Ideas are jigsaw puzzles
As with jigsaw puzzles, ideas can have many different starting points. Irrespective of where you start though, you still need to end up with a picture that comes together (business model story).
The goal of sketching a Lean Canvas is deconstructing an idea so that you see it more clearly. While imposing a starting point (like customer and problems) was well-intentioned (because they tend to the riskier boxes), I found that too many people would often fake these boxes anyway. They would write problem statements to justify a solution that they already wanted to build. And, in the process, gave themselves a false sense of comfort.
When you’ve already decided to build a hammer, everything looks like a nail.
Yes, this is the Innovator’s Bias. The most amazing part is that people don’t even realize they are doing this. So now I take a different approach.
Before you can confront your Innovator’s Bias, you have to be able to see it.
Instead of imposing a specific order, I now direct people to fill out their canvas by starting with their idea backstory. These triggers reveal a lot about the situation, context, biases, and pitfalls that often also come along for the ride.
Here’s how I do this:
How to Deconstruct an Idea
1. Take a quick snapshot of an idea
The goal of a first Lean canvas isn’t achieving perfection, but taking a snapshot. I recommend setting a timer for 20 minutes and filling out as many boxes as you can within that time limit. It’s okay to leave boxes blank.
Start with your idea backstory. Even though your idea may have felt like a flash of inspiration, ideas can always be traced back to one or more specific events or triggers that caused you to take action.
The Uber founders, for instance, supposedly got the idea after they were unable to find a taxi after an event in Paris. They encountered a problem and decided to do something about it (scratch your own itch). If I were sketching that canvas, I’d start with the problem box.
If you’re a researcher with a discovery or invention that you’re commercializing, you’re starting with the solution box. Might as well make that explicit on the Lean Canvas.
If you’re being asked to find a new market revenue stream by management, make that your explicit starting constraint.
If you want to give it a go, you can get started with a blank Lean Canvas template at http://leancanvas.com.
2. Study your chain of beliefs
What were the first three boxes you filled? Where you start is quite telling.
Filling out a Lean Canvas is essentially stacking a chain of beliefs that build on each other. The early links in the chain constrain and shape your idea. Also, any faulty or weak assumptions early in the chain have a ripple effect. This is why it’s particularly insightful to introspectively study and be critical of the early links in your chain of beliefs — your idea backstory.
What’s interesting to note here is that the seemingly random order of the Lean Canvas is actually a gift in disguise. Had the Lean Canvas been organized more logically, people might be led to fill it in that order and miss following their own more natural thinking order.
Not surprisingly, the solution box often makes the top starting point for most ideas. Next in line are probably revenue/growth directives and exploiting a preexisting unfair advantage.
As you work through your chain of beliefs, categorize each one into on these buckets:
- a leap of faith (gut instinct),
- an anecdotal observation, or
- a fact (based on empirical data).
This will help you take stock of just how grounded your idea is currently.
3. Reorder your chain of beliefs
The point of this exercise isn’t to fault your idea generation method. Remember that “good ideas” can come from anywhere. But how you act on your idea is a much greater determinant of success, than the source of the idea itself.
For an idea to be successful, it needs to simultaneously address three types of risks: customer risk, market risk, and technical risk. We can also show this as the intersection of IDEO’s three circles:
Make sure the starting links in your chain cover all three risks and that they are ideally grounded in factual data. If not, you know what to do next. Get some answers by running some learning experiments.
The Universal Starting Point
For most products, feasibility isn’t what’s riskiest but desirability, then viability. In other words, getting your customer’s attention is the first battle — more so today, than ever before.
To help you home in on your desirability story, I created a Lean(er) Canvas which lets you focus on this almost universal starting risk. https://bit.ly/3WjIVlZ
Reorder your Chain of Beliefs with a leaner Lean Canvas
In my last post, I described how sketching an idea on a Lean Canvas is akin to stacking a chain of beliefs. Later links rely on earlier links, and cracks in your early links have a ripple effect. This is why it’s particularly important to confront your chain of belief and focus on your weakest links first — your riskiest assumptions.
The real challenge isn’t idea generation, but idea validation.
For an idea to be successful, it needs to constantly balance three types of risks: customer risk, market risk, and technical risk and I described the sweet spot of an idea being at the intersection of desirability, viability, and feasibility.
But tackling all three risks at once can be overwhelming. How far do you go on each one and where do you start?
Meet the Lean(er) Canvas
While sketching out a complete Lean Canvas is a great exercise for baselining an idea and internalizing the “business model as the product” mindset, at the earliest stages, however, it helps to more narrowly focus attention on just the two outer boxes of the canvas: Customer segment and Problem.
If you get these assumptions wrong, it’s easy to see how everything else in your business model falls apart. You end up describing a solution that no one wants (not desirable). Even if you manage to build this solution (feasible), no one buys it (not viable). Your channels and unfair advantages don’t offer any respite. Your business model is doomed.
You can also use this customer/problem quadrant to test your desirability, viability, and feasibility risks.
Desirability
Grabbing your customer’s attention with a compelling unique value proposition (UVP) is the first battle. A good UVP is narrow (targets early adopters) and specific (nails a problem).
If you can describe your customer’s problems better than they can, there is an automatic transfer of expertise — your customers start believing that you must also have the right solution for them.
You’ve probably experienced this at your doctor’s office. After receiving a successful diagnosis, you probably believed your doctor had figured out your ailment, and you rushed to fill out their prescription — even though your doctor was simply following a systematic process of elimination by unpacking your symptoms (educated guessing). Marketer, Jay Abraham, calls this phenomenon the Strategy of Pre-eminence.
Describing problems better than your customers grants you super-powers.
Viability
The mistake a lot of innovators make is setting their pricing model relative to their solution. This is cost-based pricing and it’s sub-optimal.
Customers don’t care what it costs to build your product, they want to buy a solution to their problems in order to achieve a desirable outcome. It follows then that pricing should be set relative to problems and outcomes — not your solution.
The best initial evidence of viability or monetizable pain is a check being written.
If your customers are currently spending money (or a proxy for money, like time) on solving a problem with an existing alternative, that’s often a good enough proxy signal for a problem worth solving at this stage.
If on the other hand, you can’t list any existing alternatives, that’s a red flag.
Feasibility
What about feasibility? Problems and solutions are two sides of the same coin. Most people start with a solution and then search for problems. But in a world where the biggest risk is building something nobody wants, it’s more effective to reverse this order.
If your customer and problems assumptions are not yet grounded in empirical learning, it’s prudent to first get them in order.
Be Wary of Your Innovator Bias
When refining your customer/problem quadrant, it’s tempting to do so with respect to your envisioned solution by asking:
- Who is the ideal customer (early adopter) for my solution, or
- What specific problems can I solve with my solution?
But notice that there is no solution box in this quadrant.
This is by design.
Like a prosecutor in court, you need to be able to make the case for the problems listed in this quadrant without relying on your solution. How do you that? By describing problems with respect to your customer’s existing alternatives instead. This is the essence of the Innovator’s Gift — my new project focused on finding better problem discovery techniques. Check it out here.
In other words, don’t focus on problems you can solve with your solution. Rather focus on problems your customers encounter when using existing alternatives. Anchoring your unique value proposition, pricing, and solution against these problems is the secret to crafting an effective UVP that grabs attention and causes a switch — because it’s specific, familiar, and compelling.
This subtle change in perspective is often the difference between inventing fake problems to justify your solution, and uncovering real problems worth solving.
Want to give it a go?
You can create a Lean(er) Canvas at LeanCanvas.com.
And remember:
Make your case for problems without relying on your solution.
