find vs direct

JavaScript performance comparison

Test case created

Preparation code

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class="date published time" title="2012-02-27T14:36:13+00:00">February 27, 2012</span></div><h1 class="entry-title">Why Lean Canvas?</h1><div
class="entry-content"> <script type="text/javascript">/*<![CDATA[*///
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class="simplesocialbar-horizontal"></div><div
class="fblikebutton_button" style="padding-top: 0px; padding-bottom: 20px;"><iframe
src="http://www.facebook.com/plugins/like.php?href=http%3A%2F%2Fwww.ashmaurya.com%2F2012%2F02%2Fwhy-lean-canvas%2F&amp;layout=standard&amp;show-faces=true&amp;width=450&amp;action=like&amp;colorscheme=light" scrolling="no" frameborder="0" allowTransparency="true" style="border:none; overflow:hidden; width:450px; height:26px"></iframe></div><p>I often get asked why I created a different adaptation from the original <a
href="http://www.businessmodelgeneration.com/canvas" target="_blank">Business Model Canvas</a> by Alex Osterwalder. Lately, this question has bubbled up in frequency which is why I decided to take the time to outline the thought process that went into creating Lean Canvas.</p><p>First a quick timeline.</p><h2>Timeline</h2><p><strong>May 2009</strong><br
/> I was first exposed to the Business Model Canvas through Alex Osterwalder&#8217;s book: &#8220;Business Model Generation&#8221;. While I found the book beautifully illustrated, I originally dismissed the canvas approach as &#8220;too simple&#8221;. Many of the examples in the book illustrated the business models of well known companies like Apple and Skype &#8211; after they were successful. I was more interested in the &#8220;learning&#8221; that got them there.</p><p><img
src="http://ash.wpengine.netdna-cdn.com/wp-content/uploads/2012/02/Screen-Shot-2012-02-27-at-12.32.55-PM-608x402.png" alt="" title="What happens here?" width="500" class="alignnone size-large wp-image-1200" /></p><p><strong>Jun 2009</strong><br
/> It was not until I saw fellow entrepreneur Rob Fitzpatrick&#8217;s variation (<a
href="http://thestartuptoolkit.com/login/" target="_blank">Startup Toolkit</a>) that incorporated Steve Blank&#8217;s worksheets from &#8220;The Four Steps to the Epiphany&#8221; that I took a more serious look at the canvas. I had been using Steve Blank’s worksheets myself and had been struggling to keep them updated. The thought of capturing business model hypotheses on a single page seemed killer. I modeled my existing products at the time using both canvases which prompted me to do some tinkering of my own that I&#8217;ll describe below.</p><p><strong>Aug 2009</strong><br
/> I shared my adaptation (Lean Canvas) in a post I published: <a
href="http://www.ashmaurya.com/2010/08/businessmodelcanvas/" target="_blank">&#8220;How I Document My Business Model Hypotheses&#8221;</a>. This post quickly rose to become one of my top posts of all time. I started using and testing Lean Canvas with other startups in my workshops and was particularly encouraged by it&#8217;s ability to enable more learning versus pitching conversations.</p><p><strong>Sep 2009</strong><br
/> I recruited the help of other entrepreneurs to start building an online version of Lean Canvas with the initial goal of facilitating more of these learning conversations in my workshops, and subsequently opening it up to everyone.</p><p><strong>Feb 2010</strong><br
/> Lean Canvas also became a critical part of the methodology described in my book: <a
href="http://www.runningleanhq.com" target="_blank">Running Lean</a> &#8211; first self-published as an ebook in February 2010, now being republished as a second edition O&#8217;Reilly title in March 2012.</p><p><a
href="http://ash.wpengine.netdna-cdn.com/wp-content/uploads/2012/02/leancanvas.png"><img
src="http://ash.wpengine.netdna-cdn.com/wp-content/uploads/2012/02/leancanvas-608x516.png" alt="" title="Lean Canvas" width="600" class="alignnone size-large wp-image-1198" /></a></p><h2>Design Goals</h2><p>My main objective with Lean Canvas was making it as <strong>actionable</strong> as possible while staying <strong>entrepreneur-focused</strong>. The metaphor I had in mind was that of a grounds-up tactical plan or blueprint that guided the entrepreneur as they navigated their way from ideation to building a successful startup.</p><p>I had already been working with Lean Startup principles which had a big influence on the design.</p><blockquote><p>&#8220;Startups operate under conditions of <strong>extreme uncertainty</strong>.&#8221;<br
/> - Eric Ries</p></blockquote><p>My approach to making the canvas actionable was capturing that which was most uncertain, or more accurately, <strong>that which was most risky</strong>.</p><blockquote><p> <strong>Uncertainty</strong><br
/> The lack of compete certainty, that is, the existence of more than one possibility.</p><p><strong>Risk</strong><br
/> A state of uncertainty where some of the possibilities involve a loss, catastrophe, or other undesirable outcome.</p><p>- Douglas Hubbard</p></blockquote><p>I had found the initial Business Model Canvases I created back in August 2009 missing on things I&#8217;d consider very high risk while other things on the canvas didn&#8217;t register as high enough risk. Because the canvas is already quite space constrained, it was important to maximize on the signal-to-noise ratio. So I started trading boxes.</p><h3>Here&#8217;s what I added in:</h3><p><strong>Problem</strong><br
/> Most startups fail, not because they fail to build what they set out to build, but because they waste time, money, and effort building the wrong product. I attribute a significant contributor to this failure to a lack of proper &#8220;problem understanding&#8221; from the start.</p><blockquote><p> &#8220;A problem well stated is a problem half-solved.&#8221;<br
/> - Charles Kettering</p></blockquote><p>That is why I chose to make the &#8220;Problem&#8221; box explicit and not a derivative of something else like Value Proposition.</p><p><strong>Solution</strong><br
/> Once you understand the problem, you are then in the best position to define a possible solution. That said, I purposefully wanted to constrain entrepreneurs (through the use of a small box on the canvas) because the solution is what we are most passionate about. Left unchecked, we often fall in love with our first solution and end up cornering ourselves into legacy. Keeping the solution box small also aligns well with the concept of a &#8220;Minimum Viable Product&#8221; (MVP).</p><p><strong>Key Metrics</strong><br
/> Startups often drown in a sea of numbers in an attempt to bring order to the chaos of uncertainty. At any given point in time though, there are only a few key actions (or key macro metrics) that matter.</p><blockquote><p> &#8220;A startup can only focus on only one metric. So you have to decide what that is and ignore everything else.&#8221;<br
/> - Noah Kagan</p></blockquote><p>How is this a risk? Failure to identify the right key metric can be catastrophic &#8211; leading to wasteful activities like premature optimization or running out of resources while chasing the wrong goal. Initially these key metrics should center around your value metrics and later they shift towards your key engines of growth.</p><p><strong>Unfair Advantage</strong><br
/> This is another name for competitive advantage or barriers to entry often found in a business plan. I was cognizant of the fact that few startups have a true unfair advantage on day one which means this box would be blank.</p><blockquote><p> &#8220;A true unfair advantage is something that cannot be easily copied or bought.&#8221;<br
/> - Jason Cohen</p></blockquote><p>This box wasn&#8217;t intended to discourage you from moving forward on your vision but rather to continually encourage you to work towards finding/building your unfair advantage. Once a startup achieves some level of initial success, it is inevitable that competitors and copy-cats will enter the market. If you don&#8217;t have a defense against them, you stand a real risk of being made extinct by these fast-followers.</p><p>The addition of four new boxes meant I needed to take out four other boxes.</p><p><a
href="http://ash.wpengine.netdna-cdn.com/wp-content/uploads/2012/02/what_changed.png"><img
src="http://ash.wpengine.netdna-cdn.com/wp-content/uploads/2012/02/what_changed-608x383.png" alt="" title="BMC to Lean Canvas changes" width="608" class="alignnone size-large wp-image-1199" /></a></p><blockquote><p> &#8220;Perfection is achieved, not when you have nothing left to add, but nothing left to take away&#8221;.<br
/> - Antoine de Saint-Exupery</p></blockquote><h3>Here is what I took out:</h3><p><strong>Key Activities and Key Resources</strong><br
/> I felt both these boxes were more &#8220;outside-in&#8221; (versus entrepreneur) focussed i.e. they helped outsiders looking in to understand what the startup did. I found myself listing things here like &#8220;Customer Development&#8221;, &#8220;Software Development&#8221;, &#8220;Developers&#8221;, etc. that didn&#8217;t register high enough on risk to warrant keeping them.</p><p>I also found some overlap with the boxes I already added:</p><ul><li>I believe Key Activities can and should be really derived from the Solution box after the MVP has undergone some initial testing/validation.</li><li>Building products today isn&#8217;t as (physical) resource intensive as it used to be. With the advent of the Internet, Open Source, Cloud computing, and globalization, we need fewer resources than ever to get a product to market &#8211; making Key Resources align more closely with Unfair Advantage. But while a Key Resource can be an Unfair Advantage, not all Unfair Advantages are Key Resources.</li></ul><p><strong>Customer Relationships</strong><br
/> I am an advocate of starting every product (no matter what you are building) with a direct customer relationship (through customer interviews/observation) and then identifying the appropriate <strong>path to customers</strong> given your Solution and Customer Segment. This seemed better captured by the existing Channels box.</p><p><strong>Key Partners</strong><br
/> I&#8217;ll admit this was the hardest one to remove and one that creates the most discussion. Yes, success for some types of products is predicated on first establishing the right key partners. For example, building a global solar energy grid (platform) which has huge capital and regulatory requirements would probably require establishing key partnerships in place first. But I&#8217;d argue that most products do not fall into this category.</p><blockquote><p>When you are an unknown startup with an untested product, pursuing key partnerships from day one can be a form of waste.</p></blockquote><p>Over time, partners can become critical to optimization of your business model but the risk here isn&#8217;t the lack of partners but can rather be traced back to inefficiencies in Cost Structure and distribution Channels for which those two boxes fit the bill.</p><h2>Other questions</h2><p><strong>Why did you choose to extend the Business Model Canvas versus create something new?</strong></p><p>Even though it may have been easier to layout a new canvas differently, I chose to work within the existing layout constraints in order to attribute the work back to Alex Osterwalder&#8217;s original canvas. The fact that he licensed the original canvas under a &#8220;Creative Commons&#8221; license and invited others to &#8220;Share &#038; Remix&#8221; made this a no brainer.</p><p><strong>Who is the audience for Lean Canvas?</strong></p><p>Lean Canvas was designed for entrepreneurs, not consultants, customers, advisors, or investors. That said, the entrepreneur can greatly benefit by engaging all of those people while validating their canvas. For more see: <a
href="http://blog.spark59.com/2012/the-different-worldviews-of-a-startup/" target="_blank">&#8220;The Different Worldviews of Startups&#8221;</a>.</p><p><strong>What is the best medium for creating a Lean Canvas?</strong></p><p>Use whatever is most natural to you. We created the online tool for the sole purpose of reducing conversation friction (collaboration) with others, especially advisors who tend to be geographically distributed and busy. But I have more recently also started using a notepad version and a jumbo poster version which I&#8217;ll make available to people who might be interested in them. There is something appealing about creating a physical (versus online) artifact I can see and touch. I just got back from Dublin where a team built a LEGO version of Lean Canvas (no kidding). I&#8217;ll be sure to share details when I can.</p><p><strong>Which version should I use? Should I start with Lean Canvas and then shift to Business Model Canvas?</strong></p><p>Again, use what is most natural to you. The most important takeaway is that you document your key business model assumptions (and learning) in a portable format that you can share and discuss with people other than yourself.</p><p>That said, I have used Lean Canvas successfully from ideation to Product/Market Fit (and beyond) with a number of startups now. The risks captured on Lean Canvas aren&#8217;t just early stage risks but morph and evolve throughout the startup lifecycle.</p><p><strong>Why do you have Problem and Unique Value Proposition? Aren&#8217;t they the same thing?</strong></p><p>The Problem box is intended to capture the top problems customers face in their environments while the UVP is the marketing promise you make to them that stems from the intersection of the Problem and (your) Solution boxes.</p><p>For example, on a job board site, a job seeker&#8217;s problem might be &#8220;getting noticed by a prospective employer&#8221;, which might prompt the job board service to offer solutions like &#8220;professionally designed resume templates&#8221;, but the UVP might be &#8220;Land your dream job in 60 days or less&#8221;.</p><p>Clayton Christensen also articulates this distinction very clearly in his talks when making a case for thinking in terms of customer <a
href="http://hbr.org/product/marketing-malpractice-the-cause-and-the-cure/an/R0512D-PDF-ENG" target="_blank">&#8220;jobs-to-be-done&#8221; (problems) versus marketing features (UVP)</a>.</p><p><strong>Where do competitors go on the Lean Canvas?</strong></p><p>I am less interested in listing well-known competitors we often build into our investor pitches and more interested in identifying how customers deal with their problems today (existing alternatives).</p><blockquote><p>Your true competition is NOT who you think they are, but who your customers think they are.</p></blockquote><p>There is an &#8220;Existing Alternatives&#8221; sub-section under the Problem box that is intended for this purpose.</p><p><strong>Why do you have Unique Value Proposition and Unfair Advantage? Aren&#8217;t they the same thing?</strong></p><p>The job of a UVP is to capture a customer&#8217;s attention while the job of the Unfair Advantage is to deter copy cats and competitors. These two are often NOT the same thing.</p><p>For example, with Facebook:<br
/> UVP: &#8220;Connect and share with the people in your life.&#8221;<br
/> UA: Large network effects</p><p><strong>Why do you have a single key metrics box? Doesn&#8217;t every hypothesis that is tested require a metric to measure it?</strong></p><p>Yes, when testing any item on the canvas with an experiment, you should formulate a falsifiable hypothesis which requires you to identify a metric you&#8217;ll use to measure success or failure. The Key Metric box though is intended to identify the single macro metric or goal that drives what you do i.e. what experiments you run.</p><p><strong>Will you add a plug-in model to Lean Canvas like the Business Model Canvas?</strong></p><p>I am not opposed to using other tools, worksheets, or even layers that help entrepreneurs to brainstorm or explore the main boxes in depth. For example, a pricing or metrics worksheet might help one to think through these concepts. We are using a form of layering (in the online tool) to capture experiments on the canvas (current progress).</p><p>That said, I am opposed to requiring this additional information when conveying the core business model. What particularly drew me to the canvas model was that it fit on a single page, making it fast, concise, and portable. The problem with business plans is that they take too long to create and don&#8217;t get read by others. I am all for time-boxing initial canvas creation and jump-starting learning through conversations.</p><p><strong>Isn&#8217;t the Lean Canvas too product-focused?</strong></p><p>If anything, the Lean Canvas is heavily &#8220;problem focused&#8221;. Both the canvas and methodology emphasize <strong>understanding the problem</strong> as a requisite first step. As to the &#8220;product&#8221; label, I tend to use it to rather loosely. Entrepreneurs are action oriented and need to build a &#8220;product&#8221;.</p><p>In my post, <a
href="http://www.ashmaurya.com/2011/06/your-product-is-not-the-product/" target="_blank">&#8220;Your product is NOT the Product&#8221;</a>, I challenge entrepreneurs to also shift their definition of &#8220;product&#8221; from building a solution to building a working business model.</p><p><strong>I&#8217;m happy to address any more unanswered questions in the comments&#8230;</strong></p><p>Related posts:</p><ol><li><a
href='http://www.ashmaurya.com/2010/09/lean-startup-is-a-rigorous-process/' rel='bookmark' title='Lean Startup is a Rigorous Process'>Lean Startup is a Rigorous Process</a></li></ol></div><div
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class="ad-block"><h2>Want More Tactical Techniques for Systematically Building Your Startup?</h2><p>Since writing my book, I’ve taught dozens of workshops, fielded hundreds of questions,
and adapted these principles to startups ranging from web to enterprise to clean tech.</p><p>While I’ve been amazed by how well these principles apply across a range of products
and business models, the major obstacle for most still centers around the reduction of these
principles to actionable tactics.</p><p>I’m taking this next iteration of learning and turning it into a Running Lean Mastery series.</p><div
class="left"><a
href="http://blog.runningleanhq.com/mastery/" class="red-button">Learn More...</a></div><div
style="clear: both;"></div></div></div><div
id="disqus_thread"><div
id="dsq-content"><ul
id="dsq-comments"><li
class="comment even thread-even depth-1" id="dsq-comment-1874"><div
id="dsq-comment-header-1874" class="dsq-comment-header"><cite
id="dsq-cite-1874"> http://www.kickofflabs.com/ <span
id="dsq-author-user-1874">Josh Ledgard</span></cite></div><div
id="dsq-comment-body-1874" class="dsq-comment-body"><div
id="dsq-comment-message-1874" class="dsq-comment-message"><p>Thanks for sharing this.  Before we started <a
href="http://www.kickofflabs.com" rel="nofollow">http://www.kickofflabs.com</a> we wrote up several 5 page &#8220;plans&#8221; that could have easily been replaced by this model. It would have saved us a bunch of time.  So I&#8217;d recommend anyone do this when trying to validate several ideas.  </p><p>BTW &#8211; Love to figure out how we could partner up. Email <a
href="mailto:Josh@kickofflabs.com">Josh@kickofflabs.com</a>. <img
src='http://ash.wpengine.netdna-cdn.com/wp-includes/images/smilies/icon_smile.gif' alt=':)' class='wp-smiley' />  </p><p
class="thdrpy">[<a
href="javascript:void(0)" onclick="movecfm(event,1874,1,'Josh Ledgard');">Reply</a>]</p></div></div></li></li><li
class="comment odd alt thread-odd thread-alt depth-1" id="dsq-comment-1875"><div
id="dsq-comment-header-1875" class="dsq-comment-header"><cite
id="dsq-cite-1875"> http://twitter.com/girifox <span
id="dsq-author-user-1875">Giri Fox</span></cite></div><div
id="dsq-comment-body-1875" class="dsq-comment-body"><div
id="dsq-comment-message-1875" class="dsq-comment-message"><p>That&#8217;s a fantastic and insightful article, thank you.</p><p
class="thdrpy">[<a
href="javascript:void(0)" onclick="movecfm(event,1875,1,'Giri Fox');">Reply</a>]</p></div></div></li></li><li
class="comment even thread-even depth-1" id="dsq-comment-1877"><div
id="dsq-comment-header-1877" class="dsq-comment-header"><cite
id="dsq-cite-1877"> http://smartsoftwaremarketing.co.uk/ <span
id="dsq-author-user-1877">Giles Farrow</span></cite></div><div
id="dsq-comment-body-1877" class="dsq-comment-body"><div
id="dsq-comment-message-1877" class="dsq-comment-message"><p>Ash, </p><p>I have tried used <br
/> Alex Osterwalder&#8217;s Business Model Canvas for a couple of startup ideas. But the changes you made feel more natural.</p><p>I have used your canvas on paper and online, and used it with people who are completely new to the concept &#8211; it flows really well and capture all the relevant points. It really helps focus on what is needed for marketing &#8211; and hopefully to focus product development on MVP.</p><p>I can see case where the full Business Model Canvas is better suited for a wider range of industries, physical products, mature businesses&#8230;</p><p>But right now, this is spot on.</p><p>Thanks for explaining</p><p
class="thdrpy">[<a
href="javascript:void(0)" onclick="movecfm(event,1877,1,'Giles Farrow');">Reply</a>]</p></div></div></li></li><li
class="comment odd alt thread-odd thread-alt depth-1" id="dsq-comment-1878"><div
id="dsq-comment-header-1878" class="dsq-comment-header"><cite
id="dsq-cite-1878"> http://twitter.com/nukdf <span
id="dsq-author-user-1878">Fabricio Buzeto</span></cite></div><div
id="dsq-comment-body-1878" class="dsq-comment-body"><div
id="dsq-comment-message-1878" class="dsq-comment-message"><p>Great article.<br
/> I always say that Lean Canvas is great to find your Problem/Solution fit (which developers like to see as only solution) and Busines Canvas is great to find the Market fit.<br
/> This way they contribute in different stages of the development.</p><p
class="thdrpy">[<a
href="javascript:void(0)" onclick="movecfm(event,1878,1,'Fabricio Buzeto');">Reply</a>]</p><div
class="comment-childs chalt" id="comment-1880"><img
alt='' src='http://0.gravatar.com/avatar/227cd037d02b5858707fc05eb1558590?s=32&amp;d=http%3A%2F%2F0.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D32&amp;r=G' class='avatar avatar-32 photo' height='32' width='32' /><p><cite><a
href='http://www.ashmaurya.com/' rel='external nofollow' class='url'>Ash Maurya</a></cite> Reply:<br
/><small
class="commentmetadata">February 28th, 2012 at 12:41 pm</small></p><p>Curious to hear what elements you find missing from Lean Canvas towards finding Product/Market Fit&#8230; It is purposely split down the middle to handle both Product and Market.</p><p
class="thdrpy">[<a
href="javascript:void(0)" onclick="movecfm(event,1880,2,'Ash Maurya');">Reply</a>]</p></div></div></div></li></li><li
class="post pingback"><p>Pingback: <a
href='http://startupiceland.wordpress.com/2012/02/29/business-model-design/' rel='external nofollow' class='url'>Business Model Design | Startup Iceland</a></p></li></li><li
class="comment even thread-even depth-1" id="dsq-comment-1883"><div
id="dsq-comment-header-1883" class="dsq-comment-header"><cite
id="dsq-cite-1883"> http://www.facebook.com/smidwap <span
id="dsq-author-user-1883">Matt De Leon</span></cite></div><div
id="dsq-comment-body-1883" class="dsq-comment-body"><div
id="dsq-comment-message-1883" class="dsq-comment-message"><p>Thans for an excellent article. It certainly clarifies a lot.</p><p>In particular, I like the way the lean canvas is molded around mitigating risk&#8211;this has been a big thought in my head recently. Viewed in this light, are there not other risks that startups encounter that could be considered as high priority? For instance, what happens to the startup that is unable to effectively test and build its product before running low on cash? Or what about the risk of hiring people too early in the process, or the risks of incorrectly setting up the company&#8217;s legal structure?</p><p>Sometimes these seem petty in comparison to grander &#8220;product&#8221; issues, but these can harm a startup&#8217;s chances of iterating to find product/market fit. Do you think these &#8220;other&#8221; risks have a place on the canvas?</p><p
class="thdrpy">[<a
href="javascript:void(0)" onclick="movecfm(event,1883,1,'Matt De Leon');">Reply</a>]</p></div></div></li></li><li
class="post pingback"><p>Pingback: <a
href='http://startupiceland.wordpress.com/2012/02/29/bmd-value-propositions/' rel='external nofollow' class='url'>#BMD &#8211; Value Propositions | Startup Iceland</a></p></li></li><li
class="comment odd alt thread-odd thread-alt depth-1" id="dsq-comment-1888"><div
id="dsq-comment-header-1888" class="dsq-comment-header"><cite
id="dsq-cite-1888"> <span
id="dsq-author-user-1888">Drtonyratliff</span></cite></div><div
id="dsq-comment-body-1888" class="dsq-comment-body"><div
id="dsq-comment-message-1888" class="dsq-comment-message"><p>Ash,It&#8217;s so funny that I found this Blog and article today. On my drive into work I was thinking about how the Business Model Canvas is just &#8220;too messy&#8221;. I taught an introduction lecture to some entrepreneurial students at Purdue University, and I just didn&#8217;t feel like including this material because of the complexity in the model. I&#8217;m involved in several start-ups, restarts and existing businesses. I love hearing about all the Lean Start-up Methodologies and seeing the learning that&#8217;s happening in start-up communities.I think your Canvas is a big improvement, but there still needs to be more focus on &#8220;Customer Development&#8221;. <br
/> Step back and look at is as a whole. Think about it, in your model only about 20% represents the &#8220;Customer Side of the Equation&#8221; (both Customer Segments and Channels), and the other 80% of the Canvas represents &#8220;Product&#8221; and &#8220;Operations&#8221;.</p><p>However, as both an entrepreneur and a VC, I see it time and time and time again&#8230;. product development isn&#8217;t the problem! In dentistry, it&#8217;s easy to build a $1M state-of-the-art dental practice, but it fails without &#8220;butts&#8221; in the seats. I see the same thing happen over and over in the technology space &#8211; it&#8217;s easy to build a cool piece of software or mobile application that&#8217;s full of features, but that&#8217;s because IT&#8217;S  the easy part!</p><p>Product development is hardly ever the problem. I&#8217;m not a developer, but most of the developers I know can build awesome stuff and eventually get the product to where it needs to be.  The problem is NOT building stuff, but finding paying customers &#8211; always!None of the stuff in the remaining 80% of your model even matters if you don&#8217;t find paying customers&#8230; none of it! Thanks for helping the Start-up Community and I&#8217;m enjoying your Blog. I just wanted to add my two cents because I see this as being a &#8220;biggest problem&#8221; for most start-ups. Cool ideas, Cool Products, Can&#8217;t Find PAYING CUSTOMERS.Dr. Tony Ratlifftonyratliff.com</p><p
class="thdrpy">[<a
href="javascript:void(0)" onclick="movecfm(event,1888,1,'Drtonyratliff');">Reply</a>]</p></div></div></li></li><li
class="post pingback"><p>Pingback: <a
href='http://timkastelle.org/blog/2012/03/building-dynamic-business-models/' rel='external nofollow' class='url'>Building Dynamic Business Models &laquo; Innovation Leadership Network</a></p></li></li><li
class="post pingback"><p>Pingback: <a
href='http://www.donaldmcmichael.com/business-models-make-the-right-moves.htm' rel='external nofollow' class='url'>Why Some Businesses Almost Always Make the Right Moves – Week’s 5 Best Posts</a></p></li></li><li
class="post pingback"><p>Pingback: <a
href='http://smartsoftwaremarketing.co.uk/2012/software-marketing-tweetables-5march-2012/' rel='external nofollow' class='url'>Software Marketing Tweetables - 5 March 2012 | Smart Software Marketing</a></p></li></li><li
class="post pingback"><p>Pingback: <a
href='http://www.developertown.com/2012/03/the-5-pretty-faces-of-lean/' rel='external nofollow' class='url'>Developer TownThe 5 (Pretty) Faces of &#8220;Lean&#8221; |</a></p></li></li><li
class="comment even thread-even depth-1" id="dsq-comment-1899"><div
id="dsq-comment-header-1899" class="dsq-comment-header"><cite
id="dsq-cite-1899"> http://twitter.com/HeaphyDarren <span
id="dsq-author-user-1899">Darren Heaphy</span></cite></div><div
id="dsq-comment-body-1899" class="dsq-comment-body"><div
id="dsq-comment-message-1899" class="dsq-comment-message"><p>Good article, Ash, thanks for sharing. We found the LEGO process (which you can read about at <br
/> <a
href="http://blog.scurri.com/2012/02/25/building-a-lean-startup-using-lego/" rel="nofollow">http://blog.scurri.com/2012/02/25/building-a-lean-startup-using-lego/</a>) extremely helpful in articulating our collective interpretation of what we understood the canvas to be (and, furthermore, which canvas to follow up on). Rory&#8217;s writing another article about our learnings from this process this week.</p><p
class="thdrpy">[<a
href="javascript:void(0)" onclick="movecfm(event,1899,1,'Darren Heaphy');">Reply</a>]</p></div></div></li></li><li
class="post pingback"><p>Pingback: <a
href='http://salvadorstartups.wordpress.com/2012/03/06/coworking-business-model-canvas/' rel='external nofollow' class='url'>#2 Coworking Business Model Canvas &laquo; Salvador Startups</a></p></li></li><li
class="comment odd alt thread-odd thread-alt depth-1" id="dsq-comment-1901"><div
id="dsq-comment-header-1901" class="dsq-comment-header"><cite
id="dsq-cite-1901"> <span
id="dsq-author-user-1901">Anonymous</span></cite></div><div
id="dsq-comment-body-1901" class="dsq-comment-body"><div
id="dsq-comment-message-1901" class="dsq-comment-message"><p>Hi Ash, I met Alexander Osterwalder in Berlin 2009 when I co-organized the Buch Digitale conference. I loved his design thinking concept. But when I tried out the business model canvas on my startup it just didn&#8217;t feel right. I agree 100% with you that the original business model canvas is more useful when applied on bigger ventures. I will try out your lean canvas on startups and I am confident that it will be very helpful. Thanks for this!</p><p
class="thdrpy">[<a
href="javascript:void(0)" onclick="movecfm(event,1901,1,'');">Reply</a>]</p></div></div></li></li><li
class="post pingback"><p>Pingback: <a
href='http://salvadorstartups.wordpress.com/2012/03/08/3-bmc-na-real/' rel='external nofollow' class='url'>#3 BMC na real &laquo; Salvador Startups</a></p></li></li><li
class="post pingback"><p>Pingback: <a
href='http://bizagility.com.br/2012/03/19/porque-lean-canvas/' rel='external nofollow' class='url'>Porque Lean Canvas | Biz Agility</a></p></li></li><li
class="comment even thread-even depth-1" id="dsq-comment-1946"><div
id="dsq-comment-header-1946" class="dsq-comment-header"><cite
id="dsq-cite-1946"> http://twitter.com/rocSpeaks <span
id="dsq-author-user-1946">Return on Change</span></cite></div><div
id="dsq-comment-body-1946" class="dsq-comment-body"><div
id="dsq-comment-message-1946" class="dsq-comment-message"><p>This is a great article and really appreciate your insight into the Lean Canvas!</p><p
class="thdrpy">[<a
href="javascript:void(0)" onclick="movecfm(event,1946,1,'Return on Change');">Reply</a>]</p></div></div></li></li></ul></div></div> <script type="text/javascript">/*<![CDATA[*//*  */
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                'date':            "03\/05\/2012 11:59 PM",
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Why Lean Canvas?

Why Lean Canvas?

I often get asked why I created a different adaptation from the original Business Model Canvas by Alex Osterwalder. Lately, this question has bubbled up in frequency which is why I decided to take the time to outline the thought process that went into creating Lean Canvas.

First a quick timeline.

Timeline

May 2009
I was first exposed to the Business Model Canvas through Alex Osterwalder’s book: “Business Model Generation”. While I found the book beautifully illustrated, I originally dismissed the canvas approach as “too simple”. Many of the examples in the book illustrated the business models of well known companies like Apple and Skype – after they were successful. I was more interested in the “learning” that got them there.

Jun 2009
It was not until I saw fellow entrepreneur Rob Fitzpatrick’s variation (Startup Toolkit) that incorporated Steve Blank’s worksheets from “The Four Steps to the Epiphany” that I took a more serious look at the canvas. I had been using Steve Blank’s worksheets myself and had been struggling to keep them updated. The thought of capturing business model hypotheses on a single page seemed killer. I modeled my existing products at the time using both canvases which prompted me to do some tinkering of my own that I’ll describe below.

Aug 2009
I shared my adaptation (Lean Canvas) in a post I published: “How I Document My Business Model Hypotheses”. This post quickly rose to become one of my top posts of all time. I started using and testing Lean Canvas with other startups in my workshops and was particularly encouraged by it’s ability to enable more learning versus pitching conversations.

Sep 2009
I recruited the help of other entrepreneurs to start building an online version of Lean Canvas with the initial goal of facilitating more of these learning conversations in my workshops, and subsequently opening it up to everyone.

Feb 2010
Lean Canvas also became a critical part of the methodology described in my book: Running Lean – first self-published as an ebook in February 2010, now being republished as a second edition O’Reilly title in March 2012.

Design Goals

My main objective with Lean Canvas was making it as actionable as possible while staying entrepreneur-focused. The metaphor I had in mind was that of a grounds-up tactical plan or blueprint that guided the entrepreneur as they navigated their way from ideation to building a successful startup.

I had already been working with Lean Startup principles which had a big influence on the design.

“Startups operate under conditions of extreme uncertainty.”
- Eric Ries

My approach to making the canvas actionable was capturing that which was most uncertain, or more accurately, that which was most risky.

Uncertainty
The lack of compete certainty, that is, the existence of more than one possibility.

Risk
A state of uncertainty where some of the possibilities involve a loss, catastrophe, or other undesirable outcome.

- Douglas Hubbard

I had found the initial Business Model Canvases I created back in August 2009 missing on things I’d consider very high risk while other things on the canvas didn’t register as high enough risk. Because the canvas is already quite space constrained, it was important to maximize on the signal-to-noise ratio. So I started trading boxes.

Here’s what I added in:

Problem
Most startups fail, not because they fail to build what they set out to build, but because they waste time, money, and effort building the wrong product. I attribute a significant contributor to this failure to a lack of proper “problem understanding” from the start.

“A problem well stated is a problem half-solved.”
- Charles Kettering

That is why I chose to make the “Problem” box explicit and not a derivative of something else like Value Proposition.

Solution
Once you understand the problem, you are then in the best position to define a possible solution. That said, I purposefully wanted to constrain entrepreneurs (through the use of a small box on the canvas) because the solution is what we are most passionate about. Left unchecked, we often fall in love with our first solution and end up cornering ourselves into legacy. Keeping the solution box small also aligns well with the concept of a “Minimum Viable Product” (MVP).

Key Metrics
Startups often drown in a sea of numbers in an attempt to bring order to the chaos of uncertainty. At any given point in time though, there are only a few key actions (or key macro metrics) that matter.

“A startup can only focus on only one metric. So you have to decide what that is and ignore everything else.”
- Noah Kagan

How is this a risk? Failure to identify the right key metric can be catastrophic – leading to wasteful activities like premature optimization or running out of resources while chasing the wrong goal. Initially these key metrics should center around your value metrics and later they shift towards your key engines of growth.

Unfair Advantage
This is another name for competitive advantage or barriers to entry often found in a business plan. I was cognizant of the fact that few startups have a true unfair advantage on day one which means this box would be blank.

“A true unfair advantage is something that cannot be easily copied or bought.”
- Jason Cohen

This box wasn’t intended to discourage you from moving forward on your vision but rather to continually encourage you to work towards finding/building your unfair advantage. Once a startup achieves some level of initial success, it is inevitable that competitors and copy-cats will enter the market. If you don’t have a defense against them, you stand a real risk of being made extinct by these fast-followers.

The addition of four new boxes meant I needed to take out four other boxes.

“Perfection is achieved, not when you have nothing left to add, but nothing left to take away”.
- Antoine de Saint-Exupery

Here is what I took out:

Key Activities and Key Resources
I felt both these boxes were more “outside-in” (versus entrepreneur) focussed i.e. they helped outsiders looking in to understand what the startup did. I found myself listing things here like “Customer Development”, “Software Development”, “Developers”, etc. that didn’t register high enough on risk to warrant keeping them.

I also found some overlap with the boxes I already added:

  • I believe Key Activities can and should be really derived from the Solution box after the MVP has undergone some initial testing/validation.
  • Building products today isn’t as (physical) resource intensive as it used to be. With the advent of the Internet, Open Source, Cloud computing, and globalization, we need fewer resources than ever to get a product to market – making Key Resources align more closely with Unfair Advantage. But while a Key Resource can be an Unfair Advantage, not all Unfair Advantages are Key Resources.

Customer Relationships
I am an advocate of starting every product (no matter what you are building) with a direct customer relationship (through customer interviews/observation) and then identifying the appropriate path to customers given your Solution and Customer Segment. This seemed better captured by the existing Channels box.

Key Partners
I’ll admit this was the hardest one to remove and one that creates the most discussion. Yes, success for some types of products is predicated on first establishing the right key partners. For example, building a global solar energy grid (platform) which has huge capital and regulatory requirements would probably require establishing key partnerships in place first. But I’d argue that most products do not fall into this category.

When you are an unknown startup with an untested product, pursuing key partnerships from day one can be a form of waste.

Over time, partners can become critical to optimization of your business model but the risk here isn’t the lack of partners but can rather be traced back to inefficiencies in Cost Structure and distribution Channels for which those two boxes fit the bill.

Other questions

Why did you choose to extend the Business Model Canvas versus create something new?

Even though it may have been easier to layout a new canvas differently, I chose to work within the existing layout constraints in order to attribute the work back to Alex Osterwalder’s original canvas. The fact that he licensed the original canvas under a “Creative Commons” license and invited others to “Share & Remix” made this a no brainer.

Who is the audience for Lean Canvas?

Lean Canvas was designed for entrepreneurs, not consultants, customers, advisors, or investors. That said, the entrepreneur can greatly benefit by engaging all of those people while validating their canvas. For more see: “The Different Worldviews of Startups”.

What is the best medium for creating a Lean Canvas?

Use whatever is most natural to you. We created the online tool for the sole purpose of reducing conversation friction (collaboration) with others, especially advisors who tend to be geographically distributed and busy. But I have more recently also started using a notepad version and a jumbo poster version which I’ll make available to people who might be interested in them. There is something appealing about creating a physical (versus online) artifact I can see and touch. I just got back from Dublin where a team built a LEGO version of Lean Canvas (no kidding). I’ll be sure to share details when I can.

Which version should I use? Should I start with Lean Canvas and then shift to Business Model Canvas?

Again, use what is most natural to you. The most important takeaway is that you document your key business model assumptions (and learning) in a portable format that you can share and discuss with people other than yourself.

That said, I have used Lean Canvas successfully from ideation to Product/Market Fit (and beyond) with a number of startups now. The risks captured on Lean Canvas aren’t just early stage risks but morph and evolve throughout the startup lifecycle.

Why do you have Problem and Unique Value Proposition? Aren’t they the same thing?

The Problem box is intended to capture the top problems customers face in their environments while the UVP is the marketing promise you make to them that stems from the intersection of the Problem and (your) Solution boxes.

For example, on a job board site, a job seeker’s problem might be “getting noticed by a prospective employer”, which might prompt the job board service to offer solutions like “professionally designed resume templates”, but the UVP might be “Land your dream job in 60 days or less”.

Clayton Christensen also articulates this distinction very clearly in his talks when making a case for thinking in terms of customer “jobs-to-be-done” (problems) versus marketing features (UVP).

Where do competitors go on the Lean Canvas?

I am less interested in listing well-known competitors we often build into our investor pitches and more interested in identifying how customers deal with their problems today (existing alternatives).

Your true competition is NOT who you think they are, but who your customers think they are.

There is an “Existing Alternatives” sub-section under the Problem box that is intended for this purpose.

Why do you have Unique Value Proposition and Unfair Advantage? Aren’t they the same thing?

The job of a UVP is to capture a customer’s attention while the job of the Unfair Advantage is to deter copy cats and competitors. These two are often NOT the same thing.

For example, with Facebook:
UVP: “Connect and share with the people in your life.”
UA: Large network effects

Why do you have a single key metrics box? Doesn’t every hypothesis that is tested require a metric to measure it?

Yes, when testing any item on the canvas with an experiment, you should formulate a falsifiable hypothesis which requires you to identify a metric you’ll use to measure success or failure. The Key Metric box though is intended to identify the single macro metric or goal that drives what you do i.e. what experiments you run.

Will you add a plug-in model to Lean Canvas like the Business Model Canvas?

I am not opposed to using other tools, worksheets, or even layers that help entrepreneurs to brainstorm or explore the main boxes in depth. For example, a pricing or metrics worksheet might help one to think through these concepts. We are using a form of layering (in the online tool) to capture experiments on the canvas (current progress).

That said, I am opposed to requiring this additional information when conveying the core business model. What particularly drew me to the canvas model was that it fit on a single page, making it fast, concise, and portable. The problem with business plans is that they take too long to create and don’t get read by others. I am all for time-boxing initial canvas creation and jump-starting learning through conversations.

Isn’t the Lean Canvas too product-focused?

If anything, the Lean Canvas is heavily “problem focused”. Both the canvas and methodology emphasize understanding the problem as a requisite first step. As to the “product” label, I tend to use it to rather loosely. Entrepreneurs are action oriented and need to build a “product”.

In my post, “Your product is NOT the Product”, I challenge entrepreneurs to also shift their definition of “product” from building a solution to building a working business model.

I’m happy to address any more unanswered questions in the comments…

Related posts:

  1. Lean Startup is a Rigorous Process

Want More Tactical Techniques for Systematically Building Your Startup?

Since writing my book, I’ve taught dozens of workshops, fielded hundreds of questions, and adapted these principles to startups ranging from web to enterprise to clean tech.

While I’ve been amazed by how well these principles apply across a range of products and business models, the major obstacle for most still centers around the reduction of these principles to actionable tactics.

I’m taking this next iteration of learning and turning it into a Running Lean Mastery series.

  • http://www.kickofflabs.com/ Josh Ledgard

    Thanks for sharing this. Before we started http://www.kickofflabs.com we wrote up several 5 page “plans” that could have easily been replaced by this model. It would have saved us a bunch of time. So I’d recommend anyone do this when trying to validate several ideas.

    BTW – Love to figure out how we could partner up. Email Josh@kickofflabs.com. :)

    [Reply]

  • http://twitter.com/girifox Giri Fox

    That’s a fantastic and insightful article, thank you.

    [Reply]

  • http://smartsoftwaremarketing.co.uk/ Giles Farrow

    Ash,

    I have tried used
    Alex Osterwalder’s Business Model Canvas for a couple of startup ideas. But the changes you made feel more natural.

    I have used your canvas on paper and online, and used it with people who are completely new to the concept – it flows really well and capture all the relevant points. It really helps focus on what is needed for marketing – and hopefully to focus product development on MVP.

    I can see case where the full Business Model Canvas is better suited for a wider range of industries, physical products, mature businesses…

    But right now, this is spot on.

    Thanks for explaining

    [Reply]

  • http://twitter.com/nukdf Fabricio Buzeto

    Great article.
    I always say that Lean Canvas is great to find your Problem/Solution fit (which developers like to see as only solution) and Busines Canvas is great to find the Market fit.
    This way they contribute in different stages of the development.

    [Reply]

    Ash Maurya Reply:

    Curious to hear what elements you find missing from Lean Canvas towards finding Product/Market Fit… It is purposely split down the middle to handle both Product and Market.

    [Reply]

  • Pingback: Business Model Design | Startup Iceland

  • http://www.facebook.com/smidwap Matt De Leon

    Thans for an excellent article. It certainly clarifies a lot.

    In particular, I like the way the lean canvas is molded around mitigating risk–this has been a big thought in my head recently. Viewed in this light, are there not other risks that startups encounter that could be considered as high priority? For instance, what happens to the startup that is unable to effectively test and build its product before running low on cash? Or what about the risk of hiring people too early in the process, or the risks of incorrectly setting up the company’s legal structure?

    Sometimes these seem petty in comparison to grander “product” issues, but these can harm a startup’s chances of iterating to find product/market fit. Do you think these “other” risks have a place on the canvas?

    [Reply]

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  • Drtonyratliff

    Ash,It’s so funny that I found this Blog and article today. On my drive into work I was thinking about how the Business Model Canvas is just “too messy”. I taught an introduction lecture to some entrepreneurial students at Purdue University, and I just didn’t feel like including this material because of the complexity in the model. I’m involved in several start-ups, restarts and existing businesses. I love hearing about all the Lean Start-up Methodologies and seeing the learning that’s happening in start-up communities.I think your Canvas is a big improvement, but there still needs to be more focus on “Customer Development”.
    Step back and look at is as a whole. Think about it, in your model only about 20% represents the “Customer Side of the Equation” (both Customer Segments and Channels), and the other 80% of the Canvas represents “Product” and “Operations”.

    However, as both an entrepreneur and a VC, I see it time and time and time again…. product development isn’t the problem! In dentistry, it’s easy to build a $1M state-of-the-art dental practice, but it fails without “butts” in the seats. I see the same thing happen over and over in the technology space – it’s easy to build a cool piece of software or mobile application that’s full of features, but that’s because IT’S the easy part!

    Product development is hardly ever the problem. I’m not a developer, but most of the developers I know can build awesome stuff and eventually get the product to where it needs to be. The problem is NOT building stuff, but finding paying customers – always!None of the stuff in the remaining 80% of your model even matters if you don’t find paying customers… none of it! Thanks for helping the Start-up Community and I’m enjoying your Blog. I just wanted to add my two cents because I see this as being a “biggest problem” for most start-ups. Cool ideas, Cool Products, Can’t Find PAYING CUSTOMERS.Dr. Tony Ratlifftonyratliff.com

    [Reply]

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  • http://twitter.com/HeaphyDarren Darren Heaphy

    Good article, Ash, thanks for sharing. We found the LEGO process (which you can read about at
    http://blog.scurri.com/2012/02/25/building-a-lean-startup-using-lego/) extremely helpful in articulating our collective interpretation of what we understood the canvas to be (and, furthermore, which canvas to follow up on). Rory’s writing another article about our learnings from this process this week.

    [Reply]

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  • Anonymous

    Hi Ash, I met Alexander Osterwalder in Berlin 2009 when I co-organized the Buch Digitale conference. I loved his design thinking concept. But when I tried out the business model canvas on my startup it just didn’t feel right. I agree 100% with you that the original business model canvas is more useful when applied on bigger ventures. I will try out your lean canvas on startups and I am confident that it will be very helpful. Thanks for this!

    [Reply]

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  • http://twitter.com/rocSpeaks Return on Change

    This is a great article and really appreciate your insight into the Lean Canvas!

    [Reply]

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