Creating a business plan that is long pages and full of details can take a lot of time. So, why don’t you try making a Lean Canvas that is more practical, simpler, but still effective for planning and testing your business ideas. Curious about how to make it? Here’s the complete information!
What is Lean Canvas?
As explained on the Canva page, the Lean Canvas is a one-page diagram designed to help entrepreneurs and startups map out their business ideas in a simple and focused manner.
This tool was introduced by Ash Maurya in 2010. In his book entitled “Running Lean”, Maurya admitted that the Lean Canvas was adapted from the Business Model Canvas (BMC) which was developed by Alexander Osterwalder two years earlier.
There, Maurya also mentioned that most existing business planning tools, including BMC, are too complex and are more suitable for established companies. Not for startups that are agile and struggle to manage uncertainty at the beginning of their journey.
Therefore, Maurya focuses Lean Canvas on the most important things, such as validating customer problems and the right solutions.
He hopes that this tool can help startups identify and test their business ideas quickly and efficiently without wasting a lot of time or resources.
Lean Canvas vs Business Model Canvas
Because it is adapted from the Business Model Canvas, you will find several similarities. However, the two still have significant differences, especially in the approach, goals, and elements used—because these are intended to answer the unique challenges faced by startups.
Source: Canva
Judging from the picture above, there are several differences that you can find. However, to make it clearer, let’s look at the following table of differences.
| Aspects | Lean Canvas | Business Model Canvas |
| Initiator | Ash Maurya (2010), adapted from the Business Model Canvas to be applied to small companies or start-ups. | Alexander Osterwalder (2008) to simplify long and complex business plan formats. |
| Objective | Validate business ideas by focusing on problems, solutions and market risks. | Helping existing businesses develop comprehensive business plans. |
| Approach | Based on experimentation and iteration, adapting to dynamic startup characteristics. | Uses a more structured approach to conduct thorough analysis. |
| User | Startups, entrepreneurs and MSMEs to develop business ideas. | Large companies, corporations, or established businesses as a means of communication with investors, advisors, and other stakeholders. |
| Element Structure | Added Problems, Solutions, Key Metrics, and Unfair Advantages elements. | Maintain elements of Key Partners, Key Activities, Key Resources and Customer Relationships. |
| Level of Complexity | Simple and focused on relevant aspects for startups. | More complex and includes strategic elements. |
Elements in the Lean Canvas
The Lean Canvas consists of nine elements for mapping business ideas. Where each element plays an important role in exploring the main problems faced by customers, the solutions offered, and ways to measure success. The following is the explanation.
1. Problems
Describe the problems or pain points faced by the target market and want to be solved by the product/service you offer. This is important to ensure that the solutions provided are relevant and needed.
2. Customer Segments
Identify and determine the customer groups most affected by the mentioned problems. This element will help you assess whether the product or service offered is right on target.
3. Unique Value Proposition
This is a statement about the unique value you offer. It’s about what makes it different, why it’s better, and why customers should prefer your product.
4. Solutions
Describe how your product or service is able to solve the problems faced by customers. These elements will help you find answers to questions about how you will meet needs or face challenges.
5. Channels
Explains how the product or service will be delivered to customers. This includes various means or distribution channels used to reach and contact target customers.
6. Revenue Streams
Identify how businesses make money from customers. This could be direct sales, subscriptions, advertising fees, or other monetization methods. You can simultaneously determine a pricing strategy.
7. Cost Structure
Outlines what costs are involved and need to be incurred to run a business. This can include operational costs, marketing costs, product development, and so on.
8. Key Metrics
Establish metrics or KPIs that will be used to measure the success of the business model. These metrics must be able to show how effectively and efficiently the business is running and the extent to which goals are achieved.
9. Unfair Advantages
Identify unique advantages or factors that become strengths and provide long-term competitive advantage. Usually this involves things that are difficult for competitors to imitate.
Advantages and Limitations of Lean Canvas
Of the various business planning tools available, you need to know that each type has its own goals, advantages and limitations. The following is a discussion of the advantages and disadvantages of Lean Canvas as a business planning tool.
Advantages of Lean Canvas
- Simplicity and Speed. The Lean Canvas is very simple and can be filled out in a short time making it suitable for startups that need to respond quickly to market changes without wasting time on complex planning.
- Focus on Market Validation. Helps entrepreneurs validate their business ideas early and identify risks before investing large resources.
- Flexibility. This tool allows its users to change their business models to adapt to market findings or experimental results.
- Concise Visualization. With just one page, you can see and map the big picture of the business model easily.
- Focus on Customers. Elements such as Problems, Customer Segments, and Unique Value Proposition “force” you to focus on customer needs and desires so that you can create products that the market really expects.
Limitations of Lean Canvas
- Not Suitable for More Complex Businesses. While very useful for startups and small businesses, Lean Canvas may be less effective for larger businesses with more complex structures and operations.
- Less Focus on Long Term Plans. Lean Canvas focuses more on experimentation and validation of ideas in the short term. This can make it less suitable for businesses that require more detailed long-term planning and major expansion strategies
- Ignoring Financial Aspects. Even though there are elements of Cost Structure and Revenue Streams, Lean Canvas is not able to provide in-depth financial analysis like a conventional business plan.
- Relies on Unverified Assumptions. Many elements focus on assumptions, meaning there is a risk that decisions made could be driven by inaccurate estimates leading to wrong decisions.
- Not Digging Into Deep Operational Details. This tool does not delve much into operational aspects, such as logistics or internal business processes.
So, that’s an explanation of Lean Canvas. However, whatever business you run, everything will only be useful if you document transactions and business administration needs in detail. For this matter, leave it to the Labamu application which has helped 84,000+ entrepreneurs in Indonesia. Come on, download the application via Google Play or the App Store.
