Problem Top 3 problems
Solution
Unique Value Proposition Unfair Advantage
Customer Segments
Top 3 features
Simple, clear, compelling message that states why you are different and worth paying attention to
Can’t be easily copied or bought
Target customers
Path to customers Channels
Key Metrics Key activities you measure
Cost Structure Customer acquisition costs, distribution costs, hosting, people, etc.
Revenue model, lifetime value, revenue, gross margin Revenue Streams
Product
Market
Lean Canvas is adapted from The Business Model Canvas (http://www.businessmodelgeneration.com) and is licensed under the Creative Commons Attribution-Share Alike 3.0 Un-ported License.
Unfortunately, the simplicity of these canvases can lead to people using these tools in an obvious and simplistic manner. Don’t just fill in “due diligence requirements” boxes on a checklist here. You need to really scratch hard inside each box to uncover deeper insights that are not obvious and that give you deeper sources of sustainable competitive advantage. If your canvas does not show some surprising and novel sources of differentiation from others, this is a warning sign that you are failing to build in stickiness, customer loyalty, strategic collaborations, core competencies and other sources of business model value. Osterwalder’s most recent book, Value Proposition Design , helps entrepreneurs with the process of designing their business model based on better understanding the customer. This book uses many of the ideas from the field of “design thinking,” which I think is one of the big new ideas in entrepreneurship. A Key Failure Is Lack of Focus If used properly, Value Proposition Design helps the entrepreneur (and Angel) understand the customer's “jobs to be done,” and the key emotional pains experienced and gains the customer wants when getting the jobs done. It gives the Angel investor insight as to how well the entrepreneur has explored customer needs and market segments, and designed their product and business model to resolve the most pressing market issue(s). A key failure of entrepreneurs is a lack of focus. Rigorous use of the value proposition canvas in customer discovery uncovers the emotional needs of each market segment allowing the entrepreneur to focus on one critical market segment. This reduces capital requirements and significantly enhances the probability of traction, i.e., success. — Kirk Hamilton , Angel Investor & Principal, Élan Tactical Management Inc. Frank Erschen points out: “One of the toughest parts of due diligence and making the decision to invest is deciding how deeply you believe in the proposed business model and determining if the team has the capability to learn and pivot. We know that few business models survive, so you’re really investing in a future generation of the business model. This reinforces the conventional view that investments in early-stage companies are based on the team ahead of product or business model.”
How to Achieve Good Returns
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