How do you use lean canvas and business model canvas to map out and test your startup hypotheses?

1 What is lean canvas?

Lean canvas is a one-page template that helps you define and validate the key elements of your startup idea, such as the problem, the solution, the unique value proposition, the customer segments, the channels, the revenue streams, the cost structure, the key metrics, and the unfair advantage. It's based on the lean startup methodology, which emphasizes learning from customer feedback and iterating quickly. Lean canvas helps you focus on the problem-solution fit, meaning how well your solution solves a real and meaningful problem for your target customers.

2 What is business model canvas?

Business model canvas is another one-page template that helps you describe and design the logic of how your startup creates, delivers, and captures value. It consists of nine building blocks: customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure. It's based on the business model generation framework, which helps you explore different ways of creating value for different stakeholders. Business model canvas helps you focus on the product-market fit, meaning how well your value proposition matches the needs and expectations of your market.

3 How do they differ?

Both lean canvas and business model canvas are useful tools for mapping out and testing your startup hypotheses, but they have some differences in their purpose, scope, and perspective. Lean canvas is more suitable for early-stage startups that need to validate their problem and solution hypotheses before building their product or service. It helps you identify the riskiest assumptions and prioritize the experiments that can invalidate or confirm them. Business model canvas is more suitable for later-stage startups that need to refine their value proposition and business model hypotheses after building their product or service. It helps you analyze the trade-offs and synergies between different elements of your business model and optimize them for scalability and sustainability.

4 How to use lean canvas?

To use lean canvas effectively, you should begin by identifying the top three problems that your target customers have and the customer segments that share them. This should be supported with data and evidence, not just opinions or guesses. Then, describe how your product or service solves these problems and what makes it different and better than existing alternatives. Additionally, define how you reach and acquire customers and how you generate income from them. Estimate the fixed and variable costs of running your business, as well as the key indicators that measure your progress and performance. Lastly, state what gives you a sustainable and defensible edge over competitors and why it's hard to copy or replicate - this could be your team, network, brand, technology, or anything else that creates a barrier to entry.

5 How to use business model canvas?

To use business model canvas effectively, you should begin by defining the value you offer to customers and who they are. Utilize the value proposition canvas to further understand their pains, gains, and jobs and how your product or service alleviates, creates, or supports them. Next, outline how you deliver your value proposition to your customers and how you interact with them. Additionally, explain how you capture value from your customers and what are the main costs of creating and delivering it. Identify what assets and capabilities you need to execute your business model and what actions you need to perform to create and deliver your value proposition. Finally, list who are your key partners and suppliers and what are the benefits and costs of collaborating with them.

6 How to test your hypotheses?

Testing your startup hypotheses, mapped out using lean canvas or business model canvas, is essential for validating or invalidating them as quickly and cheaply as possible. To do this, prioritize the riskiest hypotheses first, such as those with the most uncertainty and impact on success or failure. Design experiments that can falsify your hypotheses, collecting data that can measure them. Analyze the data and draw conclusions to decide whether to persevere or pivot your hypotheses based on the evidence. This will help you learn from the results and make informed decisions.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?