Every business idea does need a plan. The plan that will help entrepreneurs avoid obstacles on their startup journey, mitigate risks and make sure their company will stand the competition. But how? Writing a multi-page business plan might appear to be quite a resource-consuming activity. You’ll need to go into detail and plan each step to convince investors to give you funds.
Luckily, modern entrepreneurs are equipped with more efficient methods and tools that make planning easier. A well-thought-out business scheme like a lean canvas model may serve as a visual representation of your business plan, which you will pitch to investors.
Only by knowing exactly what results you want to achieve, you can reap the benefits. Steve Jobs, Mark Zuckerberg, and other notable entrepreneurs met many business challenges on their path to success. But, eventually, they managed to reach their goal and became world-known market leaders in their industries thanks to effective planning.
Read our article to know what the lean canvas model is, how it can be applied to five unicorn companies such as Facebook, Google, Tesla, Apple, and Skype and discover how you can use it to benefit your business!
- What is Lean Canvas Model?
- Business Model Canvas vs. Lean Canvas
- 5 Multi-Billion Companies and Lean Canvas Model Examples
- Key Benefits of the Lean Canvas Model
- A Recap: Should You Use a Lean Canvas Model?
What is a Lean Canvas Model?
The lean canvas model is a strategic management tool that promises to provide entrepreneurs with actionable documentation on how to implement their idea on the market. Created by Ash Maurya, this concept has quickly gained traction due to its simplicity and flexibility.
So, why is the lean startup model so popular?
The answer is that up-and-coming entrepreneurs can simply release their products on the market. They only need to follow these three fundamental principles in the lean canvas model – find, execute, and validate.
And voilà — you are equipped with an awesome plan to make your business idea come alive ready to be presented to angels!
Business Model Canvas vs. Lean Canvas
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 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 outlined the core differences between the two models.
- Model orientation.
The lean canvas model focuses on finding the 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.
5 Multi-Billion Companies and Lean Canvas Model 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 to spot inefficiencies, predict risks and highlight their strong points.
Since the best way to learn is to learn from others’ mistakes and achievements, in this article, we decided to look at 5 top companies and discover how they paved the way to worldwide success with the help of the lean canvas philosophy.
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 the 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 to Facebook, it would look like this at the outset of startup’s journey:
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 could find relevant content at a high speed. And 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 during the initial startup development phase? Let’s have a look at the chart below:
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. Worked 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 of how could Apple use the lean canvas example at the very beginning of its success journey:
Created by: Martin Eberhard & Marc Tarpenning
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, a PayPal’s co-founder. He invested $6,5 million in the first investment round and joined the board of directors in Tesla.
Let’s imagine that Tesla decided to use the lean business canvas model. So, how will it look? Below, there is a graph, showing a Tesla’s jumpstart:
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:
Key Benefits of 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. The thorough market and competitor’s 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 doesn’t have a precise framework for your business development. It provides a kind of a wireframe which 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 clients’ needs and pain points, you’ll conquer the market at 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. Lean canvas model equips you with the tools to monitor your buyers’ behavior and the way they interact with your products and services.
A Recap: Should You Use a Lean Canvas Model?
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, you get a chance to implement your boldest ideas with high-quality software development services.