Lean Canvas: Your 20-minute business plan

- How can you write an effective business plan without wasting your time? The problem with traditional business plans is that they take way too much time to write in return to the value they give. Let's say you have a business idea but you're not sure about it yet. Maybe you want to start something for yourself or you'll want to create a product or maybe it's a new surface.

Your company wants to develop then the first important step is to find out where the riskiest part of that idea is. That's why in today's video we're gonna do a complete Lean Canvas workshop in under 20 minutes. A Lean Canvas is a fast and effective way to break down your idea into smaller parts so that you can focus on the riskiest parts first.

And did I already say that you can do this all within 20 minutes? That's actually the best part of creating this canvas, the time constraint, because when it comes to ideas execution is the only thing that matters. You can't know if you're going in the right direction without making progress. So, lets go.

(upbeat music) Last year forced a lot of companies to steer in a different direction to come up with new ideas to help serve that customer. And the challenging part about this is not coming up with the ideas but finding ideas that are worthwhile for your customer but as well for the business. We have a list of ideas you want to quickly find out which one is the most worthwhile to pursue and the Lean Canvas is a great way to get started.

Oh yeah. By the way if you already know what a Lean Canvas is then feel free to skip ahead. In this video, there are timestamps below and you can skip to the part where I show you a workshop you can do for yourself or with your team to fill in your own Lean Canvas. But let's jump into what a Lean Canvas is.

It's a template created by Ash Maurya and what he did was to use the Business Model Canvas and optimize it for Lean Startups and Lean Startup is from this book by Eric Reese and it helps you to build your company and launch new products and the most important part is to always validate your assumptions and to focus on the riskiest assumption first.

But let's start with our own workshop and create our own Lean Canvas in under 20 minutes. Like every week there is a workshop template available. You can find the link down below in the description, it's made in Google Slides but of course you can also download it as a PowerPoint or as a PDF and with the PDF you can also import it into mural or miro.

The goal of this workshop. Hi Ash. The goal is to deconstruct an idea so that you can see it more clearly and this helps to prioritize the riskiest assumptions first. This is what the canvas looks like. So there are nine parts to the canvas and we will go by them one by one and as you can see the amount of space available is pretty limited.

And that's by design, because this forces you to be concise and also not to spend too much time in the different parts. And the first question that usually pops up is where to start because there are nine squares which one do we tackle first? But the simple answer to that is that there's no right order to fill in the answers but what usually is helpful is to start with the customer first and then focus on the problems they have.

So that's what we're gonna do in this workshop. So all the different parts of the canvas are broken down into separate exercises which you can do pretty quickly and this will help you to fill in the overall canvas. So let's start with the customer and this is usually a good starting point because all the boxes relate to this box and the easiest thing to do here is to just bring them all the possible customer segments you can think of and then choose the best one to start with.

And usually it's one, but sometimes you have multiple actors like buyers and customers, and then you pick two and then the third step is to copy it back to the canvas. So let's start with an example and overall for the canvas it means the more specific you are the better. It's a bit far being too broad when you are too broad then you are talking to too many people and because it's so broad nobody feels like you're actually talking to them so a best practice is to start really small make it as specific as possible and once you are successful with a first customer segment then you can scale up to different customer segments or maybe you fail with the first customer segment but this still can mean that you have a great idea but it's maybe for a different audience.

And it can be even more specific for example, if you have CEOs then it could be that you're early adopters so the subset of customers that have an above average need for your product that the early adopters of this case of the CEOs are CEOs which are in an early stage of the company or maybe they are CEOs of a traditional organization.

So make a list of possible customer segments and then choose one, choose the best one to start with. And the last step is to copy it and to place it on your canvas. And that's our first achievement of the day. So let's go through the second part, the problems. List the top one to three problems your customers have.

And we have two ways of doing this. I will show you this way first, what we could do a here is focused on the external, the internal and the philosophical problems your customers might have. Let's have a look at some examples. So for example, the external problem could be that you need a car and the internal problem is that you want to be an early adapter of new technology and the philosophical problem is that you want to have a choice of car that helps save the environment.

Leave a comment down below if you know which company this is and I will send you a goodie to your inbox but for now let's have a look at another example and this is more focused on Workshop Wednesday. So external problems could be that people don't have experience with online collaboration or that they have back to back meetings or no ideas what tools they could use when working online.

And if you look at internal problems, then it could be that they are not sure if they can achieve the same as they could in the office or maybe they feel frustrated and running behind or maybe they are confused about how to do this, how to work online together. And then the more deeper problems could be that they have worked hard to be seen as an expert or that they think their work life should be better than this or maybe if that they are forced to work online that they deserve the same results as they did before.

So make a list for yourself and fill in the problems you can come up with and then after that choose one to three problems to start with and then copy them again to your Lean Canvas. If you find it difficult what problems your customers are facing then an alternative method could be the five times why.

I've made a copy of my examples over here and the next step is to figure out existing alternatives, you can do so over here and existing alternatives are the way your customers solve their problem today. And existing alternatives could of course be competitors but most of the times customers are maybe even doing nothing or maybe using simple solutions to solve their problem.

For example, to ask a colleague with more experience or just to simply present their current PowerPoint slides in video calls. So let's copy these examples again to our Lean Canvas over here and in this way we are starting to build our Lean Canvas really nicely. We can clean it up in a bit but let's move to the next part, which are the solutions.

And most of the times, this is the easiest part of the canvas. So copy your problems, put them over here and then come up with your solution and write them down. So in this case, if you have no experience with online collaboration, then a possible solution could be to learn from real life examples and also have a safe environment to practice with the new tools.

And actually these two problems I think they can be solved with the same solution. Let's copy the solution again to our canvas over here and paste it. Actually let's clean things up a little bit right now otherwise it becomes a bit messy So that's better. So now we have already three boxes filled. Let's move to the next box which is the unique value proposition.

And it's the green pillar of the canvas in the middle. And the value proposition is the promise that you make to your customers. So let's start with this part first, a single clear compelling message that States why you are different and worth paying attention to. And an easy way to do that is to come up with the end result the customer wants and then the specific period of time and then also address the objections and combining this helps you to create your value proposition.

Let's have a look at an example. So what the customer wants is to work together with a team online productive and on their terms within five weeks without feeling frustrated and running behind. And the value proposition could be online team work at your own terms, learn asynchronous collaboration. So let's copy and paste that again to the Lean Canvas and now we can move to the high level concept.

Oh, I forgot to mention this great website which is from Demand Curve and on this link, you can find over here, there is a page to writing value proposition. So there are a lot of great examples over here with better alternatives. You're a better solution and then the action statement and I've used an example of Duolingo over here, the learning app, the language learning app and then you can see Airbnb Dropbox so this is really useful if you need some inspiration.

Now let's move to the next part of the value proposition which is the high level concept and you can see this as an X for Y analogy. So for example, YouTube is Flicker for videos and in this case, I could say that it's like a gym bootcamp but then for working online. Let's copy that again. Now that we are almost half way filling in the canvas I see that I escaped the revenue stream, maybe you already noticed, but usually what you do is you start with the customer segment and then focus on the problems and then give a general estimation about the revenue streams and this is important because even though it's still an idea and it's a new product, which has not launched yet, it's good to have an idea if this is gonna be something valuable both for your customers and for the business.

So let's go to the revenue stream. Brainstorm possible pricing models. So what monetizeable value are you providing for your customer? And then choose the best one to start with. In this example, I think a one-time fee of 2,500 is the right way forward but an alternative could also be, for example, a subscription model.

Okay, we're getting there. So five out of nine check. Let's go to the channels. The channels are the way you can reach your customer I have outbound channels, I have inbound channels. Outbound is where you do the first step to get in touch with someone and inbound is where your customers are taking the first step to get through your product.

So examples of outbound could be called emails or ads or maybe the first degree network so if you go to LinkedIn, you can make a selection of the people on your list over there. And inbound is maybe that they find you through SAO, via Google, or that they see you on social or that they heard of you from someone else.

As an example, I've listed the YouTube ads or LinkedIn ads or maybe LinkedIn direct messages as outbound channels and inbound channels could be LinkedIn posts or weekly YouTube videos and the referral program or templates you can download. I've selected the weekly YouTube videos and the LinkedIn DMs and the SEO as the main generals which I can use right now.

Okay. Three more to go. So let's move to the next one which is over here, key metric and this is actually a pretty simple one. Describe the smallest outcome that will deem your product as success two years from now. And in this case it is really focused on your business model so how will you test if your business model is worth pursuing or not?

And can you use this template XXX two years from now. In this case let's go for this metric. Okay. Another one down two more to go. Cost structure and unfair advantage. First up is the cost structure, which is over here. So brainstorm fixed and variable costs. So what does it get you to get your first customer?

And this could be fixed costs like your hosting for your website or maybe other software tools that you're using and free argo costs like getting advice from other people. Make a list of all possible costs and then copied again to your Lean Canvas. So let's copy these examples again to the Lean Canvas over here.

So I've copied the examples over here and now we only have one box left, which is the unfair advantage. And an unfair advantage is something that cannot easily be bought or copied and what you maybe will notice that you don't have one from the start and it's okay if you don't have one, now then you can leave it blank as a reminder that you're still working on that but in this case, I know that the community and the YouTube library will help in this example.

And now that you have broken down your idea into nine smaller parts, it becomes way easier to see where the riskiest part is and where you want to start to validate your assumptions first. In this case I'm pretty sure about that Scrum Masters are the right group, but I'm not sure yet if I'm really solving the problems they are feeling right now.

So I would focus on this part of the canvas first and start testing my ideas. So in this case, if you want to figure out if you're actually solving the right problems for your customers then a great next step is to empathize with your customers and it could be through user interviews or with a day-in-a-life where you follow along with someone who could be a potential customer or you could already make a small prototype and make that available to your customers so that you can learn from their interactions with that prototype.

If you want to learn more about next steps you can take then there's a link over here to Agile Product Development. It's a page I'm working on right now with an overview of the 65-Tools and Best Practices That wow Your Customers. There's an overview video over here and then for every stage your product runs through you can see possible steps you can take over here.

This one is already worked out so you can see what the definition is, examples and a checklist of how to do that step. If you want to be the first one to know when there is a new tool available in this overview then become a member below, you can find the link, and then you will be the first one to get notified.

That's it for now like and subscribed if this video has helped you. If you have any questions then leave them down below in the comments, I'm more than happy to help. Thank you for watching and (music draws speakers voice) (upbeat music)