Did you know that Google, Facebook, and Airbnb all started out as scrappy, bootstrap-funded ventures? It’s easy to forget that even the behemoths we know and love weren’t always behemoths. But before the IPOs and global domination, they were navigating the murky waters of early-stage startups, armed with a powerful tool: the Lean Canvas.
This deceptively simple framework helped them translate audacious ideas into tangible products, validate their market fit, and ultimately, scale to stratospheric heights.
To unlock the advantages, one must possess a precise understanding of the desired outcomes. Visionaries like Steve Jobs and Mark Zuckerberg encountered numerous business hurdles in their journey to success. However, through adept planning, they ultimately triumphed, ascending to the status of global market giants in their respective industries.
Delve into our article and learn how lean canvas examples can be leveraged to enhance your business.
What Does the Lean Canvas Model Entail?
The lean canvas model serves as a concise business model template crafted to assist entrepreneurs and innovators in dissecting their ideas and pinpointing crucial assumptions. Aligned with the principles of the Lean Startup methodology, this tool follows an agile and iterative approach, emphasizing the “build-measure-learn” philosophy.
What’s the main goal?
Consider it a visual roadmap that directs attention to the fundamental aspects of your business, prompting a focus on solving customer problems sustainably. Derived from the more extensive business model canvas, the lean canvas model adopts a leaner and action-oriented stance, emphasizing nine pivotal building blocks crucial for validating ideas and achieving product-market fit:
- Customer Segments: Identifying the target audience for your product or service.
- Problem: Addressing specific pain points for your target customers.
- Solution: Outlining how your product or service resolves the identified problem.
- Value Propositions: Highlighting unique benefits compared to competitors.
- Unfair Advantage: Establishing what makes your business sustainable and defensible.
- Channels: Determining how you will reach your target customers and deliver your value proposition.
- Revenue Streams: Defining how you will generate income from your customers.
- Cost Structure: Identifying key expenses associated with running your business.
- Key Metrics: Establishing how you will measure the success of your business.
Completion of these sections provides a comprehensive understanding of your business model, revealing potential strengths and weaknesses. The one-page format encourages focus and prioritization, steering clear of unnecessary details.
Lean Canvas or Business Model Canvas?
Every startup starts with a winning idea and strategy. A well-planned business strategy is what all entrepreneurs should have to jumpstart their ventures, stay ahead of market competition, and generate revenue. The universal golden standard doesn’t exist either for enterprises or startups. Thus, experimentation and the ability to learn from mistakes are the core skills of every young company.
Both business and lean canvas models use the above-mentioned tactics.
If you are about to start your own business and doubt which tool will make the best match for you, we outline the core differences between the two models.
- Model orientation.
The lean canvas model focuses on finding surefire solutions to marketing problems through learning from mistakes. Instead, the business canvas model is designed for all companies aiming at verifying marketing hypotheses on the market.
- Marketing Approaches
The business model canvas focuses on customer segmentation and aims to explore how to build trustworthy relationships with clients. Conversely, the lean canvas model applies a different approach. It’d rather focus on testing a product idea.
- Unique Value Proposition
All entrepreneurs, whether they are experienced startuppers or they’ve just founded their first company, strive to deliver value to customers. They find it by making many mistakes and testing various ideas with different audiences. The business model canvas doesn’t join this bumpy road. Business executives know about their product value and seek to find effective communication channels to reach their customers.
If you’re curious to find out how a unique value proposition is created, have a look at IT outsourcing case studies built by LITSLINK’s seasoned software engineers.
Exploring 5 Lean Canvas Models Through Giant Company Examples
Not so many startups are lucky enough to be on the rise. Most of them do fail. The main problem is that they lack successful product ideas, which could capture the clients’ attention. The lack of market research, poor understanding of the customers’ needs, and inability to customize the product are just a few of the reasons why most startups fail. In this case, the lean canvas model might help startups spot inefficiencies, predict risks, and highlight their strong points.
Since the best way to learn is to learn from other’s mistakes and achievements, in this article, we decided to look at 5 lean canvas examples and discover how they paved
1. Facebook
Founded: 2004
Created by: Mark Zuckerberg
Country: USA, Cambridge, Massachusetts.
Total Funding: $104 billion (Valuation at IPO)
The story of creating this famous social media network started in the dormitory of Harvard University. Mark Zuckerberg, a sophomore student at that time, was working on a product that would allow students to share visual content with their friends online.
As Facebook’s founder explained in one of his interviews he just wanted to solve the students’ problem – have a common place for online communication. Despite many useless efforts, Mark Zuckerberg nailed it!
If we could apply the lean canvas model example to Facebook, it would look like this at the outset of the startup’s journey:
2. Google
Founded: 1998
Created by: Sergey Brin & Larry Page
Country: USA, Menlo Park, California
Total Funding: $23.1 billion (Valuation at IPO)
Not only Harvard students could generate innovative ideas, but Stanford University enthusiasts jumped on this bandwagon as well. Larry Page and Sergey Brin were two graduates from the computer science faculty, who created a PageRank algorithm for a newly developed search engine–BackRub, which was the first name of Google. With the help of this technology, users can find relevant content at a high speed. It was the main competitive advantage of Page and Larry’s product over other popular search engines like Yahoo and Excite.
How could Google use the lean canvas model template during the initial startup development phase? Let’s have a look at the chart below:
3. Apple
Founded: 1976
Created by: Steve Jobs & Steve Wozniak
Country: USA, Cupertino, California
Total Funding: $6,2 billion
Portable and user-friendly computers didn’t exist in the 1970s. This idea came to the minds of Steve Jobs and Steve Wozniak in 1976. At that time, they made an important decision to leave college and establish the company they were so passionate about. Changing the way people use computers was the idea that inspired them to reach new heights. Working in Steve Jobs’ garage, they created Apple I, and then – Apple II, which intended to revolutionize the industry with color graphics.
Almost several years thereafter, Apple Inc. became one of the most profitable companies on the US market.
So, let’s review how could Apple use the lean canvas example at the very beginning of its success journey:
4. Tesla
Founded: 2003
Created by: Martin Eberhard & Marc Tarpenning
Country: USA
Total Funding: $19.9 billion
The two US entrepreneurs, Martin Eberhard and Marc Tarpenning, picked up the idea of inventing electric cars in 2003 when an automotive giant – General Motors – failed with its electric vehicle – EV1.
The foundation story of Tesla doesn’t resemble the startup path of Google, Facebook, and Apple. The newly emerged company, named on behalf of a famous Serbian inventor, Nikola Tesla, strived to push the idea of electric cars on the market. In 2004, Martin Eberhard and Marc Tarpenning searched for venture capital funding and got in touch with Elon Musk, PayPal’s co-founder. He invested $6,5 million in the first investment round and joined the board of directors at Tesla.
Let’s imagine that Tesla decided to use the lean business canvas model template. So, how will it look? Below, there is a graph, showing Tesla’s jumpstart:
5. Skype
Founded: 2003
Created by: Niklas Zennstrom & Janus Friis (founders)
Country: Estonia, Sweden
Total Funding: $76.8 million
Skype was founded by two entrepreneurs – Niklas Zennstrom and Janus Friis in 2003. Inspired by the idea of free Internet voice calls, new software became a mere nightmare for phone companies. Since wireless networks gathered momentum in the early 2000s, a traditional phone service could be replaced by products like Skype.
The product was created by Estonian developers Priit Kasesalu, Ahti Heinla, and Jaan Tallinn, who worked on Kazaa, a file-sharing app. The first versions of Skype were available on several operating systems like Linux, Windows, and MacOS.
How could the lean canvas model be incorporated into Skype? Take a closer look at the graph here.
Advantages of Implementing the Lean Canvas Model
The lean canvas model creates the main cornerstone of your business on a one-page template. Improved problem-solving and better planning are only a few benefits this method offers to startups.
So, let’s examine what advantages the lean canvas model has.
Benefit 1: Greater Flexibility
Traditional business models do require much time. Thorough market and competitor research, financial analysis, and other activities take much time and resources. And what is even worse is that you can’t make any changes here. The lean canvas model template doesn’t have a precise framework for your business development. It provides a kind of wireframe that you can adjust to your business. It’s possible to test your idea multiple times and make as many changes as you want.
Benefit 2: Focus on a Problem
By understanding your client’s needs and pain points, you’ll conquer the market in one go. The lean canvas model helps you to develop a unique selling proposition, stand out from the crowd, and outpace your competitors.
Benefit 3: Viable Result Metrics
Analyzing the results of your hard work is one of the keys to building a prosperous company. So, viable result metrics will help you with this task. The lean canvas model equips you with the tools to monitor your buyers’ behavior and the way they interact with your products and services.
Final Note
We provided you with an overview of the lean canvas model and outlined the key benefits of this methodology. Also, we draw you 5 lean canvas examples of multi-billion companies with detailed graphs and figures.
It’s always up to you what goals to set and how to develop your business. By deciding to apply the lean canvas model, you get a time-saving approach to planning and strategizing that will provide you with lots of insights and benefits.
Thus, if you’ve been wondering whether you should use a lean canvas model, our answer is: ‘Yes, you should’. And what could be more important in your business than having a reliable technical partner? By reaching out to LITSLINK, a top software development company