What is a Lean Model Canvas?

In the last article, “Problems With Minimum Viable Product,” we talked about the importance of doing the right analysis, research, and prototyping to avoid the types of pitfalls that can prevent your MVP from being the learning and enablement tool it’s meant to be. This research is essential for forming a meaningful hypothesis and scoping the right features to include. After all, your MVP is the “coming out party” for your innovations, so you want to get it right! Fortunately, there’s a way to centralize and codify your data-driven analysis. It’s called the Lean Canvas Model.

The Lean Canvas is an effective tool to help you deconstruct your idea into the key building blocks that enable you to formulate your business plan. It can help you centralize and visualize these critical components of taking your idea to market. It centralizes the data and research you’ve already done onto a single page, allowing stakeholders to quickly and easily grasp the bigger picture.

Further, Lean Canvas helps guide MVP ideation by exposing gaps in your knowledge and serving as a prompt that encourages team members to ask the right questions and achieve alignment. As Michael Rabjohns, UX Practice Leader at 3Pillar Global, explains, “[These] are important questions, and it’s invaluable to get the whole team in the same room at the same time talking about them, to ensure alignment at the outset. If there are significant misalignments, and that doesn’t become clear until several months later, you’re in deep yogurt.”

While this article primarily focuses on the value of the Lean Model Canvas as it relates to your MVP, you should know that the canvas goes beyond product ideation. Because it prompts you to dig into the problem you’ll solve for users, your unique value proposition, cost structure, and revenue streams, it connects your offering to the big picture business strategy in a lean way.

This article will explore the Lean Canvas Model and its most powerful component, the Value Prop Canvas.

The Lean Model Canvas And Its Origins

Traditional business plans generally don’t excel at considering customer needs and interests. Swiss entrepreneur Alex Osterwalder called these plans time wasters and created the Business Model Canvas in 2010 to streamline and focus the process. His canvas is a one-page way to break a business model down into nine components, helping analyze both risk and opportunities. It’s well-suited for established businesses to nail their big picture goals, but it isn’t the best tool for startups or those looking to explore more untested waters.

The Lean Canvas Model, created by Ash Maurya, is an even more streamlined and focused (and startup-friendly) version of the Business Model Canvas that is particularly amenable to the needs of MVP ideation and validation. This model hones in on viability and the minimum components necessary to create value for the customer while taking business needs into consideration.

The Components of The Lean Model Canvas

Each area in the Lean Model Canvas should be informed by research and data to help ideate your MVP. We’ve explored why it’s crucial to examine every aspect of viability through rapid prototyping in a previous article. The data you gather through the prototyping process will help you populate your Lean Canvas and, in turn, inform your MVP planning. Let’s briefly look at each section.

Customer Segments: Who are your target users? To whom will you market your MVP? Prototyping will help you understand your market and learn the answers to these questions.

Problems: What problems do people face that your product is meant to solve? This should include the top 2 to 3 issues you believe your product will address. If you’ve verified this with potential users and buyers using prototypes, you should feel fairly confident that the problems you’re aiming to solve are valid.

Revenue Streams: What is your revenue model? What would your customers be willing to pay for your solution? How much does each individual revenue stream contribute to your overall revenue?

Solutions: Every feature you offer must be backed with a benefit that solves a user problem. In other words, what do potential solutions look like in relation to the issues mentioned above?

Unique Value Prop: How is your solution different from what’s already out there? To answer this, you’ll need to do a competitive analysis. This involves identifying your major competing solutions and researching their products, benefits, and marketing strategies.

Channels: Even the best solutions won’t be adopted if no one can find them. Where will your market find out about you? Channels could include social media, partnerships, direct sales, email marketing, referral marketing, and/or SEO strategies. Whether physical or digital, it’s critical to have a thorough understanding of the supply chain.

Key Metrics: How will you track usage and measure success? If you don’t establish a measure of success, you’ll have no idea what went right—or wrong—with your MVP.

Cost Structure: What are the essential building blocks of your budget? Think: hosting costs, marketing costs, licensing, personnel, etc.

Unfair advantage: Is there a feature or component of your product that no one can replicate? It’s essential to think about what will differentiate you from the competition, and it is one of the biggest reasons you do a competitive analysis.

The most powerful part of the above is the Value Proposition Canvas. It’s essentially a zoomed-in portion of the value prop and customer segments sections. In fact, both sections are identical in the business and lean model canvas.

The Value Proposition Canvas

There are two critical aspects to the Value Proposition Canvas: what it can help you understand from a user perspective and what it can help you understand from the product perspective and the relation between those. These are actually two sides of the same coin, and as such, they are interdependent.

The customer profile is a more granular version of the customer segments and delves into three key areas: Jobs to be Done, Pains, and Gains.

Former Harvard Business School professor Clayton Christensen, the late author of The Innovator’s Dilemma and Competing Against Luck, first articulated what would come to be known as Jobs To Be Done Theory in a 2005 article for the Harvard Business Review. He wrote, “When people find themselves needing to get a job done, they essentially hire products to do that job for them.”

Jobs To Be Done (JTBD) is really about understanding what people are trying to accomplish and what services they want. Products change, but the underlying jobs/services don’t. For example, listening to music is a job. Over time, in JTBD lingo, consumers have “hired” record players, tape players, Walk- and Discmans, and iPods to make the way these services are delivered more convenient. Jobs also have more than one component. The functional job is just what it sounds like: Does this product/service do what it purports to do? The emotional job refers to how a product makes someone feel, while the social job describes how someone wants to be perceived by others.

Pains are the things that stand in the way of getting the job done. Pain also represents an opportunity for innovation. If you want to hire a product to do the job of listening to music while you exercise, then a portable CD player is a vast improvement over a record player but still creates annoyances and barriers to progress when the music skips or the battery dies. Gains, on the other hand, are about how people measure success and define positive outcomes. In 2001, someone who wanted a seamless experience of listening to music while going for a run would have been more likely to hire a first-generation iPod than a cassette player to accomplish that job.

Combined, this information helps you generate a better understanding of your target user.

On the product side, the value map is a granular version of the value proposition. The three components here are pain relievers, gain achievers, and products and services, which mirror the three elements in the customer segment: pains, gains, and job to be done.

Products and services ask you to consider which of your offerings can help customers get a functional, social, and/or emotional job done. In this case, “products and services” refers to your MVP. Which specific features act as pain relievers to offset the pains you outlined on the customer side? How will specific features in your MVP act as gain achievers and help customers accomplish their goals?

Together, this information helps you design your MVP and test your value proposition. It directly helps you assess the minimum feature set that will deliver the most value, i.e., relieve the most pain and provide the most gain.

Conclusion

Using the Lean Model Canvas in combination with the Value Prop Canvas means you won’t just “feel like” you did your due diligence; you’ll know you did. Applying a systematic method to record the most salient data you gather sets you up to learn. Now you can begin to formalize the scope of your MVP and truly understand the job you’ll do for customers and the value you’ll provide.

To learn more about 3Pillar Global’s services and how we can help you fill out your Lean Model Canvas and create a Minimum Viable Product to test and validate your assumptions with real customers, contact an expert today.