The Lean Canvas – a way of quickly describing a business plan on one page -is an excellent tool. And when used iteratively, we can transform a high-level idea into a business understandable idea. One that can gain traction to become an innovation. Both when responding to ideation calls to action. As well as in free idea generation.
We can use this tool to begin addressing the innovation problem – that 94% of executives are unhappy with innovation performance. It supports a flexible approach. Without intimidating idea creators. And provides the necessary rails to share the effort of refining ideas and better supporting idea selection. Additionally, it refines ideas into a description more familiar to business sponsors.
I started iteratively using the Lean Canvas some 6 years ago. To good effect and happy users. This article is the story of how you can too.
- Most initial ideas consist of problem statement and high level solution
- Not every idea creator is comfortable giving more info beyond this
- We can use the Lean Canvas Model to describe ideas and use it iteratively to improve those ideas
- guide idea creators who want to give a better description
- guide the community on how to improve an idea
- create consistency in idea descriptions (supporting better funneling)
- bridge the gap between idea creators and business understanding
- The content of any iteration can be used to test with potential customers; or verify we have identified customer segments and early adiopters correctly
Let’s help our ideators improve their innovations.
What are today’s Challenges?
So, what are the challenges with ideation today? Well, from my experience they include the following.
Firstly, ideation is a creative act that we don’t want to exclude people from participating in. The timidest of idea generators might only want to suggest a high-level solution to a problem. If we demand too many details as mandatory then we may put them off from answering. Or an idea generator may have a flash of inspiration and want to record the idea quickly before they forget it.
Secondly, other idea generators – many in my experience – do want to explore their idea and flesh it out more. Or they want to share with a community to refine those ideas. But in both cases, they feel they lack experience on what to do or what to ask next. They would appreciate some rails to guide their work.
On the other side of idea management, it is not easy to pick ”winning” ideas from a set. Say when looking at the results of an ideation call to action. Especially if the ideas are described in many different ways. We can support better idea selection by guiding the descriptions in a common way. Similarly, if we have a consistent easy framework we can coach idea creators better, and they can self-coach.
And, lastly, we often find disconnects in how the idea is described and understood. On the one hand, we cannot expect the idea creator to always present a business readable idea. But on the other hand, the business may not spot value if the idea description is not written in a way familiar to them.
Using the Lean Canvas in an iterative way sufficiently solves these problems for us.
And here is how.
The General Idea
Let’s go back to our most timid of idea generators. He/She is likely to come up with a simple one-liner solution in the case of responding to a call to action. And if they are ideating freely, then often a simple one-liner problem statement as well.
What we want to do is evolve from that simple solution description to a fleshed-out idea that answers some key questions. Questions that explore the viability of the idea in terms of customers, uniqueness, why us and ultimately revenue and costs. In other words, a business-ready, winning idea that has a greater chance of getting traction.
This is where the Lean Canvas comes in. A filled-in canvas is our end game. And filling it in iteratively is our process of getting there. You can see our start and end positions in Figure 1.
On the right-hand side of Figure 1 is the Lean Canvas. It’s a model that helps us express a business idea on one page. And according to the creators should take no more than 20 minutes to fill out. Let’s look a little deeper.
What is the Lean Canvas?
Ash Maurya created the Lean Canvas as an adaption of Alex
As you can see in Figure 2 it is a business plan on one page. And it focusses on the problem/solution/customer – ideal for us when thinking about innovation.
Why not use the original Business Model Canvas?
I find the Business Model Canvas looks more at the delivery capability of the business model rather than the idea itself. I put the two next to each other in Figure 3. You’ll notice that even though they have the same shape, the segments are different in several places.
For example, we find segments for key partners, key activities, and customer relations are removed. And instead, we focus on the problem, solution and unique value proposition (which would have been folded into the value proposition segment of the business model canvas). Those, to me, are more important when fleshing out our idea. And the segments they replace are more interesting once we know we have an interesting idea to progress into an implementation.
I recommend this article if you’re interested in why and how the Lean Canvas developed from the Business Canvas, as well as understanding those segment differences.
But our approach is certainly flexible. So if those “missing” aspects are important to you in your description then, by all means, describe them in the available segments. For example, key partners may be part of your unfair advantage.
Now, let’s continue by looking at the various segments of the lean canvas, through an example.
Starting with the Problem / Solution Pair
You’ll find plenty of advice on how to fill in a Lean Canvas in books and online. In fact, we’ll look briefly at two a little later. And, additionally, I will be proposing another flexible approach. For now, let’s pretend we are coming at innovation in its most natural form for the majority of people. There is a simple problem stated as well as a simple idea that could solve that problem. That is to say, we have the situation shown in Figure 4.
In our running example, we state the problem as: how can children be alerted if their elderly parents stop following a predictable routine. Which could imply the parent is in some form of trouble. Now, that problem could come from an ideation call to action. Or it could be a problem the idea creator has identified themselves.
The idea creator, in this case, has identified they can monitor electricity usage via some sort of device that plugs into the house’s power network. Changes in the pattern of electricity use can indicate a parent has a problem. For example, let’s say your parents regularly make a cup of tea every morning at 9 am. That requires boiling a kettle. And the kettle has a specific power pattern usage. That is to say, if we monitor the power usage of the house we can tell when the kettle is turned on. If your parents do not turn on the kettle on a particular day then it could indicate they are in trouble.
As a next step, we could add what alternative solutions exist today.
I’m a big fan of jobs-to-be-done theory – as a customer, we hire something to get a particular job done. Thinking this way helps pull out alternatives across the goods-services continuum and avoids marketing myopia. It is also built into service-dominant thinking. Need to hang a picture on a wall? You can buy a hammer and hammer in a picture hook. You could borrow a hammer from tool-hire service or peer-peer platform (such as hygglo.se). Or you could hire an odd-jobs person to do the work fo you.
The existing alternatives part of the Lean Canvas lets you explore those alternatives.
In our example, we’ve picked out a few of the many. We could call the parents daily. Or use a webcam located in the house. Those are both pro-active and perhaps intrusive. A less intrusive alternative I have seen on the web is a mobile phone application that alerts if the phone hasn’t been moved for a set period of time. Or of course, there is the time-fashioned asking a neighbour to keep an eye on your parents.
An important aspect to realise is that bad, poor, inefficient, expensive etc existing solutions help drive customers to look for alternatives. Also, if you can’t think of any alternatives, you may not have a real problem to solve.
A challenge of one alternative – the mobile phone one – is it assumes your user behaves like the (presumably) younger person that came up with the idea. Youngsters constantly carry their phone with them. Do the elderly? This is why knowing your customer(s) is important in evolving ideas.
Knowing the Customer and Early Adopters
As we’ve just seen, knowing your customer is important. So important that the creator of the Lean Canvas suggests starting there. Doing so both helps identify potential problems (jobs that need solving). And helps you see if potential solutions are realistic.
In our example, we have identified both parents and children as target customers.
Also included in the Lean Canvas is who are the early adopters.
Understanding the Early Adopters
If you’ve read my article on Innovation Diffusion then you’ll recognise this term from Rogers’ Adopter Types. Early adopters are “around 13,5% of your target market …they will wait for your innovation to get some market hold before adopting. And often we think of these as leaders/thought influencers”.
Identifying the characteristics of these adopters helps you find your foot place in the market. It shows there are some customers (or at least that you have thought about it, and where you might get some market share). And helps you identify what your initial message needs to be.
Our example imagines we work in a high tech company. Employees are likely to be living away from their parents. And they are likely to be interested in tech solutions to give them some peace of mind. The solution is also likely to be familiar (or they can quickly get comfortable with it). These are all aspects impacting the speed of adoption.
Let’s move on to the Unique Value Proposition and high-level concept segments.
Unique Value Proposition and High-Level Concept
Where (poor) existing solutions push customers to seek new solutions, our unique value proposition should pull them to us. What’s unique about your solution? Why is it a compelling solution that pulls the customer towards you?
And in this segment, we try and give a quick comparator to help frame our solution: the high-level concept.
Conceptualising at a high-level
What is the “X for Y” of your solution? For our example, we’ve called it the “Watty for peace of mind“.
Now, you may not know Watty, but you can easily look it up (https://watty.io).
And you’ll see it consists of a device that connects to your fuse box and a mobile app. Through it, you can find out what devices are consuming electricity in your house. Watty focusses on sustainability but also allows you to answer that every morning question you have whilst on the bus “did I turn the iron off before I left?”.
As well as providing a contextual comparison, this Lean Canvas segment hints at the viability of the solution. It hopefully is not too much of a jump to see that the technology used in Watty could be used for our example solution.
But be careful with X of Y comparisons…
Here are two really interesting articles on this concept of X of Y. Actually one refers to the other. The first is by Michelle Rial and is called “Is your Startup Idea Already Taken“. In that article, she looks at what are the Uber, Tinder, BirchBox and AirBnB of a large variety of segments. WAG!, for example, is the Uber for dogs.
The second article is a commentary on Rial’s article by Andrew Chen. And is titled “‘Is your startup idea taken’ – and why we love X for Y startups“. He looks at why this comparison is so compelling, but also some of the challenges when using it. I particularly like his final point: “But don’t forget, there’s a reason why “Uber for X” startups have mostly failed — you need to lead with the customer value, not with what is easily described within the startup community.”
In doing an X of Y comparison, we can identify where some competition might come from. And so now is a great moment to look at the unfair advantage segment.
In this segment, you should look at what unfair advantages you have. That is to say, the barriers to others entering the market. Or, put another way, the things you have that cannot be easily copied or bought.
In our fictional example, we list one unfair advantage as the relationship we have with an old age charity. This we should be able to leverage to target our markets and we’ll make the fictional assumption that none of our competitors has these types of connections.
We might find we have no unfair advantages. In which case we should think about what can we build/gain to protect ourselves from, for example, fast followers. These are competitors that don’t have the original idea but quickly copy.
Again in our fictional example, we might note that Watty is a strong competitor that could move into our market quickly. Either with a simple marketing addition or quickly creating a subsidiary aimed at this market. Thus our idea might not be so attractive to take to completion. However, we might look at patenting the idea if there were value and possibility there (and we were not too concerned about being a patent troll). Or we might identify other unfair advantage opportunities.
Now we’ll jump to four segments that may be lower on the priority list for our idea creator. But higher on any business sponsor’s priority.
Key Metrics / Channels
We’re nearly at the end of our exploration now. And completing this part of the Lean Canvas are two segments: Key metrics and Channels.
Key Metrics tells us how we know if we are succeeding. We shouldn’t include too many metrics otherwise we are just measuring rather than succeeding. But we should pick ones that let us know quickly if we are on the right path. These are probably less important if we are using the tool iteratively to tease out an idea. However, they are interesting to know.
Channels cover how we take our offering to our customer. It is in here where you might define key partners if they are involved.
And now we finally get to the bottom line.
Cost Structure and Revenue Streams
Completing the Lean Canvas segments are segments for cost structure and revenue streams. I’ve often seen ideas in ideation that you can tell are commercially unviable. But I would propose for ideation purposes these two segments are useful to get an insight, but a heavy emphasis should not be placed on them initially. Otherwise, you risk stalling ideation as ideators worry about these aspects; and business risks focussing on them.
So now we’ve seen all parts of the Lean Canvas. And hopefully, you’ve observed how we built up a fairly fully-fledged idea quite quickly. But did we do so in the right order?
What is the right order to fill in the Lean Canvas Model?
When using this tool iteratively across a crowd I would suggest there is no correct order. Instead, two moves can be made – breadth and depth. And I’ll look at those in the next section.
However, some users are more comfortable if there is a proposed order. So to address that, we can look at two alternatives. Originally, in the 2012 “Running Lean” book, the order shown in Figure X is suggested.
Where the problem is first, customer segments is second, and the solution is 4th etc.
Based on experience between 2012 and the 2016 book, “Scaling Lean – Mastering the Key Metrics for Startup Growth” an updated order to fill in the Lean Canvas Model has evolved. You can see this in Figure Y.
The major change is swapping the order the problem and customer segments are filled in. As well as swapping the order of unfair advantage and channels.
As I already mentioned though, we should not constrain the users. And the above are really suggestions. When using the tool in an iterative approach with several/many users, I have found it better to discuss two types of moves. First, we can make the next iteration broader, i.e. to add more information about the idea. Second, we can make the next iteration deeper, i.e. we increase information about one or more existing fields.
Let’s see what I mean in more detail.
Using the Lean Canvas Model to get Broader
If we fill in a previously empty aspect on the canvas, then we are creating a new iteration that is broader than the previous. In the example in Figure X, you’ll see we are filling in the high-level concept aspect.
We are adding additional information about the idea. And that additional information can easily come from the original idea creator having thought about the idea more. Or it can come from a collaborator.
Using the Lean Canvas Model to get Deeper
Sometimes we can further refine an existing aspect of the canvas. In the example shown in Figure X, we are refining both the problem and solution aspects.
When making this type of move we are increasing the depth of the canvas.
In practice, I find that making one type of move will spark off insights into another type of move. For example, making a breadth move can often lead to deeper insights into other segments.
It is unlikely that you have a fleshed-out idea from the start. And so iterating is something we all do naturally. Using the Lean Canvas gives us some rails to follow.
Iteration is at the heart of the lean-approach. And Blank includes the following insight in his book “The Four Steps to Epiphany – Successful Strategies For Product That Win“:
only in business school case studies does progress with customers happen in a nice linear fashion. The nature of finding a market and customers guarantees that you will get it wrong several times. Therefore, unlike the product development model, the Customer Development model assumes that it will take several iterations of each of the four steps until you get it right.Blank (2013)
This is equally true for ideas and innovation (which hopefully form a business). We can look at Blank’s Customer Development Model (Figure 15) and see this.
Most of what we have looked at in the above is covering the first cycle: customer discovery. Where we have looked at our problem and iteratively tested that problem hypothesis and our product concept (solution) against itself. as well as identifying our early adopters used in the customer validation cycle. To fully harness the Customer Development Model we would look at testing our problem hypothesis and product concept with real customers in our target customer and early adopter segments.
We are on our way to developing an innovation!
So, we’ve seen that using the Lean Canvas as an iterative tool gives us an incredibly flexible and inclusive tool. We get a set of guide rails on what needs to be thought of to take a high-level idea into one that is thought out.
An idea creator can stop after providing a high-level solution description if they want. That can relate to either a provided problem statement or to their own generated problem statement. Or they can carry on using the rails of the canvas to flesh out the idea themselves.
Similarly, that allows us to co-develop the ideas in a structured, yet still flexible, manner.
Idea selectors have a standard view of all ideas. And the ideas are fleshed out in a language that business decision-makers can readily understand.
If they wish, the idea creator can carry on and make depth and breadth moves as the wish. in my experience idea creators have been quite excited and happy to make those moves. They have found the guide-rails of the canvas to be helpful, supportive and giving just enough guidance on what to think of without being too prescriptive.
Alternatively, the idea creator can publish/present the canvas they have created and invite others to help make breadth and depth moves. This has also worked well as the canvas encourages positive moves. Compared to, say, a comment system that allows people to write broad-brush idea killing comments like “this will never work” or “I don’t think this is useful”.