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LEAN CANVAS BUSINESS MODEL TEST • MEASURE • MAINTAIN • INSTIGATE
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L E A N C A N VA S B U S I N E S S M O D E L
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TABLE OF CONTENTS I. Overview II. How to Create a Lean Canvas Business Model I.
Problem & Customer Segments
II.
Unqiue Value Proposition
III. Solution IV. Key Advantages V.
Channels
VI. Cost & Revenue VII. Key Metrics III. L.C.B.M: Homes for Soldiers IV. Lean Canvas Business Model Template V. Conclusion VI. Appendix
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TA B L E O F C O N T E N T S
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Lean canvas business model (L.C.B.M) WHAT IS A LEAN CANVAS BUSINESS MODEL? A Lean Canvas Business Model is a portable 1-page diagram structured to brainstorm possible business models, prioritize where to start, and track ongoing learning.
HOW DOES IT DIFFER FROM A BUSINESS PLAN? Business plans take too long to write, are seldom updated, and almost never read by others.
WHY DO I WANT TO USE IT?
Concise Fast
• Business plan can take several weeks or months • Multiple lean canvas can be outlned in one afternoon
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• Captures the essence of your organziation
Accessible
• Easy to share • Read by more people • More frequently updated
Effective
• Keeps everyone on track with the bigger vision • Focuses on the big issues while honed on details and day-to-day issues.
• A single page business model is much easier to share OVERVIEW
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How to create your Lean Canvas Business Model
+
+
vs.
BRAINSTORM possible audience
sketch your
LEAN CANVAS
distinguish between
DONOR & USER
A donor is someone that donates to your organization and/or contributes monetarily
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A user is someone who uses the services of your organization
H O W T O C R E AT E Y O U R L E A N C A N VA S B U S I N E S S M O D E L
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Problem & Customer Segments List your various
USERS &
DONORS
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Name different
TRAITS
List
TOP
3
PROBLEMS
PROBLEMANDCUSTOMERSEGMENTS
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Unique Value Proposition
A single, clear compelling message that states why your organization is different and worth contributing too
HOW TO CRAFT A UNIQUE VALUE PROPOSITION
Be
1 dIFFERENT 2 Make sure your difference matters
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Focus on finished
story benefits Note the benefits your customers derive after contributing to your organization
Pick key words
& own them
Note: using a few “key words” consistently can also help drive your SEO ranking
U N I Q U E VA L U E P R O P O S I T I O N
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Solution
TACKLE SOLUTION
POSSIBILITIES
for each problem your organization faces All your hypotheses have not been tested, so don’t get carried away with fully defining a solution just yet. Bind a solution to your problem as late as possible.
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SOLUTION
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Key Advantages
LIST THE KEY
ADVANTAGES
your organization possesses that cannot be easily replicated by a competitor
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K E YA D VA N TA G E S
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Channels
A channel is a set of activities used to reach your targeted
user/donor (i.e. blogs, workshops, books, social media etc.)
LIST THE
FREE & PAID
CHANNELS you can use to reach your user/donor Start building and testing a path to users/donors from day one
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CHANNELS
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Cost & Revenue List out the
FIXED & VARIABLE Fixed costs are costs that remain the same regardless of changes in activity (e.g. rent & insurance)
Variable costs are costs that vary in direct proportion to changes in activity (e.g. direct materials & labor
costs
to run your organization The breakdown of costs into fixed & variable components will help with flexible budgeting, break-even analysis, and short-term decision making.
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List out the
streams OF FUNDS
& DONOR
SOURCES Note which donations are restricted & unrestricted Restricted donations can only be used for the purpose specified by the donor (e.g. research for leukemia)
Unrestricted donations have no specific purpose other than to support your organization
COST&REVENUE
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Key Metrics The key numbers that tell you how your organization is doing
LIST THE
tivities ac that should be tracked in order to measure
SUCCESS thinklean with e•boost
KEYMETRICS
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HOMES FOR SOLDIERS Lean Canvas Business Model
PROBLEM PROBLEM
SOLUTION
UNIQUE VALUE PROPOSITION
• Provide support network to encourage wounded soldiers to achieve their goals
• Post Traumatic Stress Disorder (PTSD) & other Traumatic Brain Injuries(TBI) prevent injured veterans from working
• Provide adequate living space
• No place to call home
As the ONLY organization that is centralized in helping veterans with PTSD or TBI, we provide homes for those who protect ours.
KEY ADVANTAGES
CUSTOMER SEGMENTS
• Powerful spokesperson • Educated, professional and well-networked team
Donors: • Compelled individuals
• Offer ample housing and support time for proper recovery
• No real support system
• Corporate Sponsors
CHANNELS KEY METRICS • # of veterans that graduate the program • > 85% of donations go to program funding • > 35% Increase in donorship per year
COST STRUCTURE
Free: • Public Relations • Word of mouth • E-mail Marketing Paid: • Fund-raising events • Website
REVENUE STREAMS
Fixed: • Veteran Housing Rent/Year ~ $35,000 • Insurance/Year ~ $3,500 • Salary ~ $0
• Personal Donations ~ $10,000 • Corporate Donations ~ $24,000 • Fund-raisers ~ $6,000
Variable: • Utilities, Food, Support services
• Federal funding ~ To be determined
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Users: • Medically discharged soldiers with PTSD and/or TBI - 18-26 years old
Lean Canvas Business Model was adapted from http://leancanvas.com and Running Lean by Ash Maurya
The “Lean Canvas” visualization of business models was adapted from The Business Model Canvas and is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License
• Grants & other federal funding
(ENTER YOUR ORGANIZATION) Lean Canvas Business Model
PROBLEM PROBLEM (List the top difficulties that your organization faces)
SOLUTION
UNIQUE VALUE PROPOSITION
(List what the possible solutions could be to your problems)
(A short, clear and compelling message that states why your organization is different and worth donating too)
KEY ADVANTAGES
CUSTOMER SEGMENTS
(List the key advantages your organization possesses that cannot be easily copied by a competitor)
(List the types of people that you would like to reach with your efforts. Note the differences between a customer and a user, and brainstorm who would be your early adopters)
CHANNELS
KEY METRICS (List the activities that should be tracked in order to measure success)
COST STRUCTURE
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channels you can use to reach your customer)
DONATIONS/FUNDS
(List out all your fixed and variables costs to run your organization)
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(List the free and paid
(List the current streams of funds or donations used to maintain your organization)
Lean Canvas Business Model was adapted from http://leancanvas.com and Running Lean by Ash Maurya
The “Lean Canvas” visualization of business models was adapted from The Business Model Canvas and is licensed uner the Creative Commons Attribution-Share Alike 3.0 Unported License
APPENDIX: INTRODUCTION
The Lean Canvas Business Model was built on the methodology described in “Running Lean” a book by Ash Maur ya. The lean canvas helps you maintain focus while strategically creating a sustainable business model. The following Appendix, breaks down each section of the LCBM to provide in-depth analysis and guidance as you look to build your organization’s ver y own lean canvas. After you are done, you will be able to spend more time building versus planning your business. Below indicates the order we recommend you take as you sit down and complete a LCBM for your own non-profit organization:
1. Problem & Customer Segment 2. Unique Value Proposition
LEAN CANVAS BUSINESS MODEL PROBLEM PROBLEM
3. Solution 4. Key Advantages
1
SOLUTION
3 KEY METRICS
2
KEY ADVANTAGES
4 CHANNELS
COST STRUCTURE
CUSTOMER SEGMENTS
1
5
7
5. Channels 6. Cost Structure & Revenue
UNIQUE VALUE PROPOSITION
DONATIONS/FUNDS
6
6
7. Key Metrics
APPENDIX:INRODUCTION
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APPENDIX: INTRODUCTION
Keep in mind, that the power of a Lean Canvas Business Model is the fact that it can be quickly updated and improved so your first draft does not have to be per fect. Also, ever y organization is unique so it ’s okay if your LCBM looks quite different. As we go through the Appendix, we will be using a fictional star t-up non-profit organization, Home for Soldiers, that looks to provide homes and suppor t for returning veterans suffering from Post Traumautic Stress Disorder (PTSD) and other traumatic brain injuries ( TBI). BELOW IS AN OUTLINE FOR SKETCHING LEAN CANVAS: 1. Sketch a canvas in one sitting: unlike a business plan, which can take months to write, your lean canvas could be sketched quickly. 2. It ’s okay to leave sections blank: instead of debating the “right ” answer, leave it blank and come back to it later. Your canvas is meant to evolve over time. 3. Think in the present: business plans tr y too hard to predict the future. Instead, write your canvas with a “getting things done” attitude.
APPENDIX:INRODUCTION
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APPENDIX: CUSTOMER SEGMENT
In the Customer Segments section of the LCBM, list both your organization’s “users” and “donors” . We use these terms broadly, but the main takeaway here is to be sure to distinguish between those you are helping (users) and those you are targeting for funding (donors).
CASE STUDY: CUSTOMER SEGMENT Users: • Medically discharged soldiers suffering from PTSD and/or TBI - Typically 18-26 years old Donors: • Corporate sponsors • Compelled Individuals • Grants & other federal funding
APPENDIX: CUSTOMER SEGMENTS
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APPENDIX: PROBLEMS
In the Problem section of the LCBM, your organization needs to visualize the issues that you look to solve on behalf of their segment ’s needs and wants. List the Top 3 problems: for each user/donor segment you are working with, describe the top 1-3 problems that need to be solved.
CASE STUDY: PROBLEMS Customer Segment: Medically discharged soliders with PTSD or TBI Problem 1: PTSD and TBI prevent them from working Problem 2: No place to call home Problem 3: No real support system
APPENDIX: PROBLEM
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APPENDIX: UNIQUE VALUE PROPOSITION
The Unique Value Proposition of the LCBM is one of the most important sections in the canvas and also one of the most difficult to perfect.
“ Unique Value Proposition: A single, clear
compelling message that states why you are different and worth buying
”
– Steve Blank, The Four Steps to the Epiphany
The UVP is hard to perfect because you have to distill the essence of your organization in a few words -- delivering the what, who & why in a concise message. In addition, your UVP needs to be different and that difference needs to matter. The good news is your UVP doesn’t have to be perfected right away. Write from your heart and what first comes to mind. Be sure to highlight the benefits your participants will derive after getting involved with your organization.
CASE STUDY: UNIQUE VALUE PROPOSITION As the ONLY organization that is centralized in helping veterans with PTSD or TBI, we provide homes for those who protect ours.
A P P E N D I X : U N I Q U E VA L U E P R O P O S I T I O N
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APPENDIX: SOLUTIONS
Under the Solutions section of the LCBM, list the ways in which your organization will solve the problems that you listed for each of your user/donor segments. Write down the “possible” solutions that you believe will solve these problems, even if you do not currently possess the resources or capabilities to accomplish them. Visualizing your solutions will make it easier for you to see the direction your organization needs to go and have a better understanding of how you will be helping your user/donor segments.
CASE STUDY: SOLUTIONS • Provide support network to encourage veterans to achieve their goals • Provide adequate living space • Offer ample housing and support time for proper recovery
APPENDIX: SOLUTIONS
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APPENDIX:
The Key Advantages section can often be quite difficult. You
KEY ADVANTAGES
may initially keep this box blank, but it’s purpose is to have you really think about how you can make your organization different and make your difference matter.
“ A real unfair advantage is something that cannot be easily copied or bought. ” – Jason Cohen, A Smar t Bear
CASE STUDY: KEY ADVANTAGES • Powerful spokesperon • Educated, professional and well-networked team
A P P E N D I X : K E Y A D VA N TA G E S
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APPENDIX: CHANNELS
A Channel is the path your organization takes to reach your user/donor segments. We find it beneficial for organizations to differentiate between “free” and “paid” channels that they are currently using or planning to use. Note that unlike a paid channel, which is used up after you pay for it, free channels keep working for you over time.
CASE STUDY: CHANNELS Free: • Public relations • Word of mouth • Blog • E-mail marketing
Paid: • Fund-raising events • Website
APPENDIX: CHANNELS
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APPENDIX:
COST STRUCTURE
In the Cost Structure section of the LCBM you will break down your organization’s “fixed” and “variable” costs. Fixed costs are the costs that are not dependent on the level of services or goods produced by the business. Ex : salaries, rent, and insurance. Variable costs are expenses that vary in direct proportion to changes in your organization’s activity. Ex: costs of goods sold, utilities, and travel expenses. Try to be as accurate and detailed as possible; however, estimations are fine as well.
CASE STUDY: COST STRUCTURE Fixed: • Veteran Housing Rent/Year ~ $35,000 • Insurance/Year ~ $3,500 • Salary ~ $0 Variable: • Utilities, Food, Support services
APPENDIX: COST STRUCTURE
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APPENDIX: REVENUE
While non-profits serve the greater good and are not for-profit, it is still important to create and maintain a sustainable business model. Under the Revenue Streams section of the LCBM, list your organization’s main streams of funding and donor sources. It is important to quantify and document the actual amounts your organization are currently receiving and/or planning to receive in the near future. Be sure to note whether or not any of your organization’s current funding are open for use or restricted to specified purposes.
CASE STUDY: REVENUE • Personal Donations ~ $10,000 • Corporate Donations ~ $24,000 • Fund-raisers ~ $6,000 • Federal funding ~ To be determined
APPENDIX: REVENUE
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APPENDIX: KEY METRICS
In the Key Metrics section of the LCBM, list the activities that should be tracked in order to measure your organization’s success. Documenting these key activities will drive usage in your organization. For instance, tracking the number of veterans that successfully finish the program is the ongoing key activity that will drive usage for “Homes for Soliders”.
“ Find the key number that tells you how your
business is doing in real time, before you get the [analysis report].
”
– Norm Brodsky & Bo Burlingham, The Knack
CASE STUDY: KEY METRICS
• # of veterans that graduate the program • > 85% of donations go to program funding • > 35% increase in donorship per year
APPENDIX: KEY METRICS
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APPENDIX:
CONCLUSION
Congratulations on completing your first Lean Canvas Business Model! Now whenever there are changes made within your organization, you will be able to quickly update and revise your LCBM in a matter of minutes. The LCBM is a powerful tool to quickly and effectively guide your organization through proper strategic planning. Since this is a work in progress, we would love to hear from you on any recommendations and/or suggestions on it’s value and how you could see it changing. Please contact us via email at: interns@eboostconsulting.com
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Lean Canvas Business Model was adapted from http://leancanvas.com and Running Lean by Ash Maurya
The “Lean Canvas” visualization of business models was adapted from The Business Model Canvas and is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License
APPENDIX:CONCLUSION
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7125 El Cajon Blvd. #5, San Diego, CA 92115 | T: 619.618.2545 | E: interns@eboostconsulting.com | W: eboostconsulting.com