If you’ve read Running Lean by Ash Maurya you’ll have encountered an important message about building new products and services – the thing that needs to be tested is the whole business model and not just the enabling product.
I was reminded of this again yesterday while discussing some new business ideas with a previous client. It is easy to get drawn into the features and exciting technology that might be necessary to deliver a service but that is only a small part of the story and, sometimes, it can be considerably less risky than many of the other imperatives.
(c) peshkova / 123RF Stock Photo
The sweet-spot for any idea is for it to inhabit a space where desirability, feasibility and viability converge and these can be usefully summarized in a simple business model.
The Lean Canvas is Ash’s adaptation of Osterwalder’s tome on Business Model Generation. It features nine critical areas that, together, represent the total challenge. The first two deal with the actual problem and the customer segments for whom these problems are worth solving. Bang in the middle is the spot for the Unique Value Proposition [UVP] that spells out the compelling reason for them to buy. Clearly, these first three areas examine the angle of desirability.
Flanking the UVP are two perspectives on the solution – namely, the solution itself (primary features) and also the unfair advantage that protects it in the marketplace. Fleshing these out begins to present a statement related to feasibility.
Supporting this overall picture are the two considerations of revenue streams and cost structure that, together, formulate a position on viability.
The final two parts consider the enablers. The first looks at key metrics – namely those activities that will be measured to steer the business towards success whilst the other examines the path to the customers in terms of channels.
The important take-away is that this whole canvas needs to be prototyped and validated and, in my opinion, should underpin any proposed innovation whether for a start-up or an established business.
Remember, innovation is simply any change that adds value. By taking this holistic view you can make sure that it does.