Therefore, in this article we will explain everything you need to know about this business model, to put it into practice and build your ideal strategy.
What is the Lean Canvas?
It is a graphic representation that serves for the strategic development of a business model.It is divided into 9 modules and is commonly used as a template to capture the basic elements of any business idea.
Alexander Osterwalder (co-creator of the work Business Model Generation ) defines it as follows:
“It is a conceptual tool that contains a set of elements and their relationships. It allows the business logic of a specific company to be expressed.”
A business strategy is a description of the value a company delivers to one or more customer segments and the architecture of the company and its partner network for creating, marketing, and delivering that value and related capital to generate profitable and sustainable revenue streams.
We could say that, in the same way that an architect designs plans for the construction of a building, an entrepreneur creates a model to define his value proposition, organize his human resources, and lay the operational, administrative and financial foundations of his company.
In this sense, it can also be established asa way to better visualize the strategies that will be applied in the structures and processes of a business economic model.
The 9 modules of the Business Model Canvas cover the four main areas of a business:
History of the Lean Canvas
The Model Canvas as we know it today was created and captured by Ash Maurya in his work “Running Lean” . Later, this way of capturing a business model in 9 blocks, acquired greater prominence with the second edition of his book as part of the series “The Lean Series” edited by Eric Ries.
To create this methodology for entrepreneurs , Ash Maurya based her work on Steve Blank's work “The Four Steps to Epiphany”, Rob Fitzpatrick's contributions in the book “The Startup Toolkit” and Alexander Osterwalder's on business model generation.
Ash Maurya's goal was to develop an itinerary of activities that would help entrepreneurs materialize their ideas from their inception to the final creation of a startup or a company.
His intention was to give entrepreneurs a working material in which they could express everything from the most uncertain (probabilities) to the most risky (high uncertainty).
In 2011, Alexander Osterwalder and Yves Pigneur, together with more than 30 collaborators, published “Business Model Generation” which explains very well how the Lean Canvas works and how to apply it to innovative business ideas, for example in the design of software and web platforms.
Pillars of the Business Model Canvas
It consists of 9 modules or blocks that constitute its pillars.
canvas-lean-canvas
The organization of this canvas is understood as follows:
Just like the human brain, the right side of the canvas is responsible for capturing the elements related to emotions and what gives value to the business idea, while the left side reflects the elements related to logic and efficiency.
Below, we will explain the information you must include in each of them to build your economic model:
1. Customer segment
Osterwalder and Yves Pigneur (2011) point out that customers are at the heart of any business model, since no company can survive for long if it does not have profitable customers,
To increase customer satisfaction, it is important to group them into several segments with common needs, behaviors and attributes.
Therefore, in this first module you must create a brief profile of the basic characteristics that your ideal buyer should have, such as: age, sex, geographic location, socioeconomic status, interests, habits, motivations, and any other characteristics that you consider important to capture in order to understand the user or beneficiary of your products and/or services:
Keep in mind that a strategic business model can define one or several market segments, whether large or small.
2. Value proposition
In this module you must describe the set of products and/or services that create value and satisfy the needs of the market segment you established.
In this sense, the value proposition is a series of advantages that a company offers to customers. It is the differential benefit that your product or service offers compared to other solutions on the market.
In addition to specifying exactly what product or service you are going to offer, in this block you must also answer:
What makes your business idea special.
What is the social value that it promotes and makes it unique?
How it differs from the competition:
3. Key activities
Key activities are those actions that are essential for the operation of your telegram free number philippines business. For example: buying inventory, serving customers, planning work meetings, among others.
According to Osterwalder and Yves Pigneur (2011), key activities may depend on the type of business model and are divided into the following categories:
Manufacturing: These activities are related to the design, manufacture and delivery of a product in large quantities or with superior quality. Manufacturing is the predominant activity in the business models of manufacturing companies.
Problem solving: This type of activity involves finding new solutions to individual client problems. The work of consulting firms, hospitals, and other service companies is often dependent on problem solving.
Platform/network: Business models designed with a platform as a key resource are subordinate to key platform- or network-related activities. Networks, networking platforms, software, and even brands can function as a platform.
For example, Microsoft's strategic/business model involves managing the interface between other vendors' software and its Windows® operating system platform. Thus, its key activities include platform management, service delivery, and platform promotion.
4. Key allies and partnerships
It is important to establish alliances with suppliers or service providers to materialize and optimize your business idea. They can also help you reduce risks or acquire resources.
In this module, you must describe the network of suppliers and partners that contribute to the operation of your business model. You must also describe which projects, companies and/or public institutions can be your allies.
We recommend that you make this choice by always looking for allies who share your same values. Osterwalder and Yves Pigneur (2011) point out 4 types of partnerships:
Strategic alliances between non-competing companies.
Strategic partnerships between competing companies.
Joint ventures: to create new businesses.
Customer-supplier relationships to ensure supply reliability.
5. Key resources
Key resources are those items your business needs to get up and running and begin producing.
These resources should allow you to create and offer your value proposition, reach markets, establish relationships with your clients and generate income.
So in this module, you should describe the most important assets for your business model to work, which can be physical, economic, intellectual or human.
Keep in mind that the key resources of your economic model can be purchased, rented or obtained from your key partners.
6. Channels
In this block you must explain how your company will communicate with the different market segments to provide them with the value proposition.
Channels are your means of access to customers. So it is important to ask yourself: through which channels are you going to sell and deliver your product? For example, through an e-commerce site, a physical establishment, home deliveries, or all of these options.
Osterwalder and Yves Pigneur (2011) point out that the functions of the channels are:
To make customers aware of a company's products and services.