Lean startup is a way of thinking about problems that startups face in getting off the ground. In this approach, the business owner or owners evaluate their business model for risks or weaknesses and attempt to solve the problems through experimentation. Like other lean management and production strategies, lean startup is a process that should be repeated over and over in order for the method to be valuable. The business model canvas is a design thinking process tool that can help entrepreneurs design and describe their business model. The canvas contains nine blocks for categories like key partners, key value propositions, cost structure, customer segments, and revenue streams. The following are some expert tips for using the canvas effectively:
Instead of filling out the business model template with a pencil or pen, use sticky notes in each block. The advantage of sticky notes is that they make it easy to move and reorganize your ideas. They can also help you keep from getting too attached to an idea that you’ll most likely have to let go of.
Instead of using only words as descriptors, try drawing pictures or other graphic images. Sometimes it is easier to communicate clearly with images than with words. Graphic organizers are particularly good for showing relationships between ideas.
Use color coding to make your canvas easy to read. You can use the same color for all the parts that are connected to a particular client, for example. Color coding makes it easy to see how different parts of your business model are related to each other.
When you’re making a presentation about your business model, use the canvas to tell your story for you, one block at a time.
Whenever you have the opportunity, learn from what other lean startups are doing. Study other business models and see what you can take from them to improve your own.
In addition to doing the right things, you also want to avoid some common mistakes in filling out a business model.
Mistake #1: You complete your business model canvas and consider yourself done. In fact, you need to be prepared to continually revise your business model as you get new facts and your circumstances change. A business model should be a living document that will change and grow along with your business.
Mistake #2: You fill out your template in one go. You may get a sense of satisfaction from completing a project, but you could be wasting time and effort. Work with the sections of the template that are relevant to the needs of your business right now based on the information that you have. Update your canvas as needed.
Mistake #3: You forget that your business model is a hypothesis rather than a conclusion. Lean startup is all about trying out ideas to see if they work. Keep revising your hypotheses as you test them in the real world.