When working with students as a UX Design Mentor at CareerFoundry, one of their early assignments is to create a Lean Canvas, which is basically a one page business plan. It’s a great tool to test multiple product ideas quickly and effectively before settling in on the best option. It’s also very useful for aligning user needs with business goals since it helps everyone focus on desired outcomes at the start of a project.
High Level Overview
The Lean Canvas methodology was created by Ash Maurya, who adapted it from Alex Osterwalder’s original Business Canvas. Espoused by the Lean Startup community, it provides a logical flow to think through all aspects of a business model without creating excessive documentation or waste.
The idea is to get your thoughts down on paper as quickly as possible (about 20 minutes or less). Your goal is to clearly focus on your product’s mission and vision at a high level without getting caught up in the details.
Six Questions
During my college journalism classes our professor wanted only the facts. The way we got them was by answering six key questions – Who, What, Where, When, Why and How. The Lean Canvas essentially gives you a convenient way to collect and organize your answers on one page.
Take a few moments to consider each of these questions before filling out your Lean Canvas:
1. Who
Who are your customers? Be as specific as possible.
2. What
What pains or problems do your customers have that your solution solves?
3. Where
Where does the problem occur? Is it on a regional, national or global scale?
4. When
When does the problem occur? Is it an ongoing problem, or does it just happen once to derail a critical process?
5. Why
This is perhaps the most important question of all to get clear on. Why is your customer experiencing the pain or problem? Why would they be interested in your solution? Why now? How many “whys” can you come up with?
6. How?
How does your solution solve the problem? How long does it take? How much does it cost your customer? How much does it cost you? How will you be profitable? How long will it take to become profitable? How will you measure success?
Lean Canvas In Context
As you fill out your document, it’s helpful to complete it in the context of the problem space. In other words, take a look at how your product fits within the overall market. Let’s start with the problem.
Problem
What exactly is the problem? Try to summarize it using no more than 3 bullet points. There’s a reason there isn’t much room to write. You want to intentionally keep your answers short and to the point. Also describe how the customer is solving the problem today without your solution. Are there any current alternatives?
Customer Segments
Now look across the document to the customer segments column on the right hand side.
Who has the problem? Customers do. Who are these people? How specifically can you describe them? What profession or industry are they in? What would make them an ideal customer? Be sure to include any champions or early adopters.
Channels
Now that you know who your customers are, think about how you will reach them. What communication channels will you use? It could be email, social media, website, video, advertising, etc. Keep this list short. It’s far better to succeed with just a few marketing channels vs. being too overwhelmed to deal with any of them.
Solution
Now let’s move on to your solution. What does your solution do better than your competition? How does it solve the customer’s problem? Why do they care? What will make them gladly pull out their wallets and pay you to help them?
Key Metrics
How do you know your solution works? How will you measure customer success? You need to come up with a few KPIs that clearly demonstrate your solution’s success. Some example metrics might be number of downloads over a given time period, reduction in cart abandonment, number of email signups, etc. The goal is to come up with a set clearly defined metrics that will demonstrate success or failure.
Unique Value Proposition
Next, let’s take a look at your UVP. What is it that you do better than your competitors? What do you do better than what your customers are doing now to handle the problem?
Unfair Advantage
This column is often challenging for clients and students. I like to explain it in terms of what is your secret sauce, or the “ninja quality” that only you possess?
For example, when the Apple MacIntosh was released, I believe the unfair advantage was Steve Jobs’ passion for excellent typography and commitment to design. I often wonder how Apple products would be different if Jobs hadn’t taken a calligraphy class as a college drop-out.
Cost Structure
What’s it going to cost to run your operation? Are you a virtual company or do you have to pay rent and insurance on physical office space? Will you have to meet payroll or incur other employee costs such as healthcare and retirement benefits? What infrastructure costs will there be? Think in terms of monthly cash outlay for all of your expenses.
Revenue Streams
Now it’s time to think about not only where the money comes from, but how you achieve profitability. Take a look at your cost structure on the left and add everything up. What can you sell your product for that will turn a profit? How much profit margin is acceptable? For digital products, aim for a 50% profit margin. That will give you plenty to invest back into the business and build up a reserve over time.
Conclusion
As you can see, going through a Lean Canvas exercise is incredibly valuable. It enables you to quickly assess the viability of your product or service idea before you’ve invested too much time or money into an idea that might not fly. What’s your experience using Lean Canvas? Please leave your thoughts in the comments. As always, thanks for reading!
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