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Rapid Business Planning

Using Lean Canvas

Presenters- Jeff Brown, Walter McCracken, PhD

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Origin of Lean Canvas

• Lean – Simplify, Streamline, Sustainable

• Business Model Canvas – Alex Osterwalder (2009)

– Use for analysis of existing companies

• Lean Canvas - Ash Maurya (2011)

– an actionable and entrepreneur-focused business plan.

– Emphasize high risk

– Problem, not product focused

– Key metric to focus activities

– Path to customers vs who are customers

What is Lean Canvas?

• Lean Canvas is a tool, a means to an end

• The end is to rapidly develop the basics of a business plan with

a focus on “what” rather than the details of “how”

• Key attractive aspects of Lean Canvas are:

– Rapid- can be developed in a half-day

– Highly visible and portable- one page format makes for great focus,

remembering and sharing, is increasingly used by entrepreneurs

– Concentrates on the “what” of the business, the value proposition to

the customer

– Is the basis for the business vision and “elevator speech”.

– Can be easily updated

PROBLEM List your top 1-3 problems.

SOLUTION Outline a possible solution for each

problem.

UNIQUE VALUE

PROPOSITION Single, clear, compelling message that

states why you are different and worth

paying attention.

UNFAIR ADVANTAGE Something that cannot easily be bought

or copied.

CUSTOMER

SEGMENTS List your target customers and users.

EXISTING

ALTERNATIVES List how these problems are solved

today.

KEY METRICS List the key numbers that tell you how

your business is doing.

HIGH LEVEL

CONCEPT What is your elevator speech?

CHANNELS List your path to customers (inbound or

outbound).

EARLY ADOPTERS List the characteristics of your ideal

customers.

COST STRUCTURE List your fixed and variables costs.

REVENUE STREAMS List your sources of revenue.

Lean Canvas Template Author Date Business Idea

Posted

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Why Plan?

• “If you don’t know where you are going, any road will

get you there”

• If you can’t explain clearly and concisely where you

are going, you are going alone

• Avoid “activity” becoming a substitute for

“performance”

A Planning Process

Idea Dream

Early Thoughts

Early Discussions

Putting Pencil to Paper

Describe the Market

Realizing there are a lot of pieces

Dream Dream

Describe Uniqueness

Describe the Benefit

Describe the Product

Describe the Payoff

Overload!

Dream Other

An Itch

Where are you in the planning process?

Creating Change

• As a budding entrepreneur, you are a change

agent.

– You have to change the status quo and make

something “new” happen

– There will be “resistance” to your proposed changes

• Let’s quickly back away from the details of your

situation to look at the dynamics of making

change

What is your

Case for

Action?

Do you have

a meaningful

vision?

How will you

start the

change?

Do you

understand

the barriers

to change?

Change Process Equation

DD VF FS R X X >

Degree of

Dissatisfaction

Vision of

the Future

First Steps

Resistance

Posted

Key takeaways - Change Process

• With inadequate DD, you are doomed. Start there.

• You need enough Degree of Dissatisfaction with enough Vision of the Future and adequate First Steps to overcome the Resistance

• All three (DD, VF, FS) are needed in some measure

• Hope is not a strategy! Enthusiasm alone will not prevail.

• The Lean Canvas helps you organize the DD, VF and FS to make your business idea a successful change

What is Lean (Sometimes called Toyota Production System, LeanSigma, etc)

• Lean is a well-established methodology that enables reductions in

time, material, effort and space required in business processes

• Developed and popularized by Japanese manufacturers 40+ years

ago, it has become a competitive advantage or requirement in

many businesses worldwide

• Lean methodology has 5 main principles (I will show only the top 2)

– Specify value in the eyes of the customer (what customer problem will you

solve)

– Identify the value stream and eliminate waste and variation (deliver the solution effectively and efficiently)

• What is your JOB #1 as an entrepreneur?

– Delivering value in the eyes of the customer

PROBLEM List your top 1-3 problems.

SOLUTION Outline a possible solution for each

problem.

UNIQUE VALUE

PROPOSITION Single, clear, compelling message that

states why you are different and worth

paying attention.

UNFAIR ADVANTAGE Something that cannot easily be bought

or copied.

CUSTOMER

SEGMENTS List your target customers and users.

EXISTING

ALTERNATIVES List how these problems are solved

today.

KEY METRICS List the key numbers that tell you how

your business is doing.

HIGH LEVEL

CONCEPT What is your elevator speech?

CHANNELS List your path to customers (inbound or

outbound).

EARLY ADOPTERS List the characteristics of your ideal

customers.

COST STRUCTURE List your fixed and variables costs.

REVENUE STREAMS List your sources of revenue.

Lean Canvas Template Author Date Business Idea

Posted

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Using the template

• The template is a guideline to help you organize your

thoughts, not a fixed set of rules. Make it work for your

client

• The plan will not be perfect; it will not survive intact

contact with the real world. But it will help the client

stay on course and attract support and understanding

• Update it as you learn

The New Business Journey

You and your idea

What Problem to Solve?

Who has the problem?

How do you know you are a success?

Can I get repeat or new customers?

How to get paid?

How to gain support?

Who will pay for a solution now?

What is the competition?

How to reach target customers?

How to make and deliver?

How to service?

Is there a profit?

Your successful business Climbing the Mountain

Why is my solution better?

How to make the sale?

Can I establish an advantage?

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4

How can my value be unique?

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Start with the Problem

• You have a great idea.

• How would you state that as a problem to be solved?

• Is it unique or linked to some other issue?

• Why is it a “problem”? When? Where?

• To whom is this a problem?

• What are the specifications of a “good solution”

• What is the benefit for solving the problem?

1

PROBLEM List Customer top 1-3 problems.

• Cannot easily find or make stands for figures

• Prefer metal but cannot make to custom size

• Metal stands are not available

• Sources are hard to find • Non-metal stands

cannot be magnetized for transport

• Some metal will not take paint or glue

SOLUTION Outline a possible solution for each

problem.

• Provide a single source of standard and custom size metal and magnetic stands with 2 day shipping at a below market price

• Provide other support materials for transport of the figures on stands

• Add other playing aids

UNIQUE VALUE PROPOSITION Single, clear, compelling message that

states why you are different and worth

paying attention.

• The right sized metal and magnetic figure stands when you need them at an affordable price

UNFAIR ADVANTAGE Something that cannot easily be

bought or copied.

• Use retired metalsmith

and his equipment at cost

• Keep business at one employee size

• Trade with figure manufacturers

• Keep up speed of response

CUSTOMER SEGMENTS List your target customers and users.

• Individual gamers • Hobby shops • Figure manufacturers • Non-historical gamers

EXISTING ALTERNATIVES List how these problems are solved

today.

• Currently many make their own of cardboard, plastic, balsa wood

• Elaborate travel cases are needed to prevent damage

KEY METRICS List the key numbers that tell you how

your business is doing.

• Sales in $ • # of customers • % repeat sales • % of new sales • % of “big” customers

HIGH LEVEL CONCEPT

• Use my small business to support my hobby while I have a unique source of metal cutting capability

CHANNELS List your path to customers (inbound or

outbound).

• Word of mouth • Web site with search

tags

EARLY ADOPTERS List the characteristics of your ideal

customers.

• Local friends • Local conventions • Known figure

manufacturers

COST STRUCTURE List your fixed and variables costs.

• Cost of metal and magnetic material • Cost of postage and packing materials • Cost of transportation (weekly runs to machine shop post office) • Cost of Returns • Own wages • Marketing expenses- business trips

REVENUE STREAMS List your sources of revenue.

• Sale of products, both standard and custom pricing • Charge for postage both regular and expedited • Sale of Traded figures •

Lean Canvas Template Example

Business Idea Provide standard, quick and inexpensive stands to minatures gamers

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Wargameaccessories.com

Targeting Customer Segments

• What customer segments are targeted? Which ones

are not? Will the customer value your solution?

• Is the user and the customer one and the same?

• In the targets segments, who are the pioneers, the early

adopters? Why are they likely to be interested?

2

READINESS TO VALUE YOUR IDEA

A Distribution of Opportunities

~15%

~15%

NU

MB

ER

OF

CU

ST

OM

ER

S

Line of Rejection Line of Acceptance

Finding the Target Customer Segment

Pioneers

Refuseniks

2

3

Who is the competition?

Why are you better?

• What are the competitive solutions?

– How are they better or worse than your solution?

• Use the specifications of a good solution developed earlier

• How can you differentiate your solution?

– Can this be quantified?

4

5

Unique Value Proposition

• A unique value proposition is a bundle of benefits, from

a customer’s perspective, which summarize why

customers turn to your company

• Be different, but make sure your difference matters

– The key to unlocking what’s different about your product is

deriving your UVP directly from the #1 problem you are

solving

– If that problem is indeed worth solving, you are already more

than halfway there.

• Focus on finished story benefits

– Highlight benefits over features. Help the customer translate

the benefits into their world. Be specific!

6

Unfair Advantage/ High Level Concept

• Unfair Advantage – A real unfair advantage is one that cannot easily be copied or

bought

– What is yours? Location, price, special source, patent, endorsement???

• High Level Concept-Elevator Speech – You are in an elevator with a big potential client or supporter

– You have 30 seconds to give a concise and powerful summary of your business concept

– What will you say??

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8

Delivering the Value

• Now that the “what” has been clearly defined

one can get on to the

– How

– When

– Where

– Who

• of delivering the value to your customers

Value

Stream

Channels

• Purposes for Channels

– Communication to Customers

– Delivery of service or product

– Executing sales

– Providing after-sales support

• What are the channels relevant to your product?

– Internet

– Phone

– Print/mail

– Word of mouth

– ??

9

Revenue Streams/Cost Structure/Key Metrics

• Revenue Streams

– At what points in your customer interaction will you draw revenue and in

what magnitude?

• Cost Structure

– What are the costs associated with the value stream delivering your

product?

• Materials, labor, transportation, sales and advertising, administrative

overheads, etc

• Will that cost structure generate a adequate profit with the

projected revenues?

• Metrics

– What are the top 2-5 “measurements” that will highlight your progress to

success?

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Homework for the Second Session

• Complete your draft of the Lean Canvas- written and ready to be

presented

• Draft your 30 second Elevator Speech

• Conduct a “sanity check” of the plan and a test of the speech with at

least one other person (mentor, friend, classmate)

• Be ready to discuss your plan with classmates at the second session

• Be ready to deliver your elevator speech to the class

• If your mentor can attend, that would be terrific

• Next session is scheduled for

– July 19, 2016

– 6:00 – 8:30PM

– Clearwater Main Library

Elevator Speech Basics

1. Who is the customer?

2. What is the benefit or value?

3. Is the message clear?

4. Is it delivered with ownership and enthusiasm

5. Within 30 seconds

Second Session Agenda

• Class Review and discussion of a sample of the Lean Canvas plans

• Answer questions on the method

• Breakout groups to sharpen the plans *

• Tuning of “Elevator Speeches” *

• Class presentation of “Elevator Speeches” and Award Presentation

• Next Steps *= Mentor Help Periods

Thank You

Questions and Comments

“Rapid Business Planning Using Lean Canvas”

Part 1 (Principles) – 7/12 Clwr Lib

Part 2 (Application) – 7/19 Clwr Lib