the lean canvas - vending machine

1. IQC 2015
Day 3:
The Lean Canvas

2. Business Leadership
Program
Aug 6

3. Have you heard of the lean canvas?

4. The Lean Canvas
● Define the lean canvas and explain it’s
purpose
● Be able to formulate components of the lean
canvas:
o key metrics, unique value proposition, unfair
advantage, channels, customer segments, cost
structure and revenue streams

5. Steve
Blank’s
Perspective

6. Lean
Canvas

7. Product Side of the Canvas
Internal perspective
● How much is your customers costing you?
● Problem-Solution Fit
● How you measure your ability to generate
value?

8. Product Defined
1. a good, idea, method, information, object
or service created as a result of a process
2. serves a need or satisfies a want
3. has a combination of tangible and
intangible attributes
4. passes through a distribution channel

10. Problem
● 1-3 core issues you are trying to solve
● Direct connection to customer
● Assumptions

11. Customer Job
Context refines a situation
Hiring a Milkshake

12. Things to Consider
Is the Problem:
● A want, a need or a demand?
● A Symptom or Underlying Cause?
● Is it Significant? Substantial? Measurable?
● An opportunity?

13. Solution
● Top 3 features
● Not just
product/technical
focused
● Pain reliever or gain
creators

14. Solution

15. Key Metrics
“A startup can only focus
on only one metric.
So you have to decide
what that is and ignore
everything else.”
– Noah Kagan

16. Key Metrics
● Measurement of activities that create value and lead to
success
● Pick one to start - will change over stages
● Validate assumptions
● Increasing success rate/decrease risk of failure
● Qualitative vs. Quantitative

17. Metric Examples

18. Good Metrics...
Three A’s:
Are Actionable
Can be Audited
Are Accessible

19. Unique Value Proposition (UVP)
“Single, clear compelling message that states why you are
different and worth buying”
What benefit do you provide and
how you do it uniquely well?

20. Unique Value Proposition (UVP)
● How do you create value for your customer segments?
● What customer problems are you trying to solve?
● What needs are you satisfying?
● What is your marketing promise to customers?
● What makes you the go-to offering?

21. Customer + Value Prop
Solution must connect your value to the
customer 3 areas to understand
about customer:
i. Customer Job
ii. Customer Pains
iii. Customer Gains
a. 3 areas to understand about Value Prop:
i. Product or Service
ii. Pain Relievers
iii. Gain Creators

22. What makes you different?
● Newness
● Performance
● Customization
● Design
● Brand/Status
● Price
● Cost reduction
● Risk reduction
● Accessibility
● Convenience or
Usability

23. Value Prop Statement:
“For (target customers)...
Who are dissatisfied with (the current alternative).
Our product is a (new product)...
That provides (key problem-solving capability)...
Unlike (the product alternative).”

24. Value Proposition Examples

25. Value Proposition Examples

26. Value Proposition Examples

27. Value Proposition Examples

28. •You are a new vending machine company targeting Rikkyo University
students
•Value Proposition: 1 sentence
•Think about:
–What are your benefits?
–Why are you different?
•Products
•Location

29. Value Prop Statement:
“For (target customers)...
Who are dissatisfied with (the current alternative).
Our product is a (new product)...
That provides (key problem-solving capability)...
Unlike (the product alternative).”

30. Cost Structure
● What are the most important costs?
● What resources and activities are most
expensive?
● What are your customer costing you?
● How lean can you run?

31. Cost Drivers
Cost Driven
● Focused on minimizing costs
● Lean processes
● Low price Value propositions
● Maximum automation &
outsourcing
● e.g. Southwest airlines
Value Driven
● Focused on value creation
● Premium positioning
● Personalized and
exclusive service
● e.g. Lux Hotel

32. Characteristics of Costs
● Fixed Costs - salaries, rent, etc
● Variable Costs - custom services
● Economies of Scale - bulk purchases
● Economies of Scope - marketing

33. Market side of Canvas
The external impact view:
● Talking and Delivering to customers
● How you make money off them
● How you stack up against your competitors

34. Lean
Canvas

35. Unfair Advantage
● The magic your customer feels
● “Something” that cannot be copied or bought
● A firm's competitive advantage or barriers of
entry to the market
● What differentiates a firm or product
● Can be both internal and external

36. Unfair Advantage
● In-depth knowledge and skills to innovate
faster than others
● “Refuse to lose” attitude

37. Unfair Advantage Paths
● Costs
● Customer Service
● Product
● Knowledge
● Innovation
● Partnerships
● Customer Experiences

38. Channels
“Failing to build significant path to customers is
among the top reasons why startups fail.”
- Ash Maurya, Running Lean

39. Channels
Get the product in the customers hands and
keep it in their hands
Impact on:
● feedback
● testing
● product development
● relationship management

40. Channels

41. Startup Channels
The cheaper the better!
● Content Marketing
● Email
● Social Media
● Search Traffic
● Referrals
● Direct Sales
● Partnerships
● Events and Conferences

42. Revenue Streams
● What value are customers paying for?
● What and how are customers currently
paying?
● How much does each revenue stream
contribute to overall revenues?

44. Revenue Streams:
● Asset sale
● Usage fee
● Subscription fees
● Lending / Renting /
Leasing
● Pre Order
● Licensing
● Brokerage fees
● Advertising
● Transaction
● Freemium/Premium

45. Revenue Streams:

46. Customer Segmentation
● For whom are we creating value?
o Business
o Customers
● Who are the most important customers?
● Who are the different groups of people or
organization an enterprise aims to reach and
serve?

47. Exercise - Canvas a Company
1. Form Groups of 2 or 3
2. Pick a company and build a lean canvas
3. Present in 2-3 minutes

49. Limitations of Demographics
•Male
•Born in 1948
•Grew up in England
•2 Children
•Very Wealthy
•Successful in Business
•Married for the 2nd time
•Real Estate Owner
•Spends Winter Vacation in the Alps
•Likes Dogs

50. Limitations of Demographics
•Male
•Born in 1948
•Grew up in England
•2 Children
•Very Wealthy
•Successful in Business
•Married for the 2nd time
•Real Estate Owner
•Spends Winter Vacation in the Alps
•Likes Dogs

51. Examples of Customer Segments
Mass Market:
Don’t distinguish
between different
customer segments.
- Consumer
electronics sector

52. Examples of Customer Segments
Niche:
Business model is tailored
to the specific requirements
of a niche market.
- Supplier-buyer
relationships.

53. Examples of Customer Segments
Segmented:
Distinguish between
market segments with
slightly different needs
and problems.

54. Examples of Customer Segments
Diversified:
Two unrelated
customer
segments.

55. Examples of Customer Segments
Multi-sided
platforms (or
multi-sided
markets):
Two or more
interdependent
segments.