The Lean Model Canvas (or LMC) is a straightforward and extremely beneficial exercise for any startup or mature business. The LMC is a re-make of the popular Business Model Canvas but revamped for the future. It has a stronger focus on LEAN business models. The idea is to follow the order of the LMC and when you run into what we like to call a “plot hole” in the business model, it will be pretty clearly visible. For example, if you find that you can’t define your problem, you may not have a strong business idea. Or if you find that you have no Unfair Advantage, you may need to tweak your Solution. We want you to find flaws in your business model before life and reality find them for you. This not only helps to grow a successful business but also a successful manager.
Parts of the LMC (in order of priority)
- 1. Problem – what issue your product/service is going to solve? Some also like to include a sub-section for “existing alternatives” or competitors in this section.
2. Customer Segments – who is your target market? Be more specific than age ranges and sex. (i.e. Single moms with no resources, Student in college, etc) Some people also like to include an “Early adopters” section or the characteristics of your ideal customer.
3. Unique Value Proposition – what is your one compelling message that can turn a visitor into a potential buyer? Some also like to include “High-level concept” or overview summary here that demonstrates from a high-level what your product will look like.
4. Solution – how will your product solve the problem previously described?
5. Channels – what are your paths to the customer? (i.e. brick & mortar retail, e-commerce site, etc)
6. Revenue Streams – how will your product/service produce cashflow?
7. Cost Structure – what costs are associated with your business? Think not only startup but also day-to-day costs.
8. Key Metrics – what parts of your business do you measure for success? A good way to think about this is what statistic correlates directly to increasing revenue? (i.e. more users on a subscription site = more paid subscriptions… so your KM would be the users)
9. Unfair Advantage – what sets your business apart from your competitors? This is generally the reason people start copy-cat businesses. (i.e. I can make a better social media site by …xyz)
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