You have an innovative business idea? Awesome! So now what? After gathering a heap of advice from your trusted search engine, you are bound to have more questions than answers in your head. Do not despair, ask HelloNina. I can shed some light on the complex parts of business plan, tell you about BMC and explain what a "lean canvas" actually is.
1. It all starts with a good idea
Finding an inspired business idea is easier said than done. Believe me, you have a lot of brainstorming ahead of you. I recommend that you search within yourself first. Think about your core competencies:
Where do you have talents and strengths? What are your professional standout qualities? What are you passionate about? Or, put simply: What do you like and do well? Based on this, we then start looking for problems in the next step. And yes, exactly! That means more brainstorming:
- Where do we need new innovative ideas in our everyday life?
- What could be made even better, cheaper, healthier, more time-saving, etc.?
Pick an area that you find particularly exciting, and think about how you would complete
- WHO WANTS WHAT (NEED FOR REQUIREMENT) because of (MOTIVATION)?
Think of about 20 ideas and then come up with a possible solution you could provide. A little tip: the more radical the idea, the better ;-). Find the coolest, as well as the most interesting idea to find the so-called "sweet spot": the interface between your idea and a customer's needs, which the competition does not cater for. Tadaa - and then off we go!
Brainstorm: Below a lots of ideas your perfect idea hides. (pic: pixapay.com)
2. I have a business idea! What now?
First of all, a profitable business model is needed. The last workshop you attended said that you should now write a business plan. But your fellow student swears on the Business Model Canvas. And there was something else going on, with "lean startup" and "lean canvas". I understand, if you already did lose your head over this. But do not worry, I want to give you some clarity.
3. Business Plan, Business Model Canvas, Lean Canvas or...?
First of all, the most important thing that I would like to recommend to you is this: Did you envision to start an innovative startup? Then, your first station - before the business plan - is called a "lean canvas".
It's no secret that innovative startups, in particular, are facing high financial risks. That's why it's all the more important to target these risks, in the right order. That's where the Lean Canvas helps you.
It is an adaptation of the Business Model Canvas (BMC), which was created by Alexander Osterwalder. The BMC is a visual representation of the key success factors, with the goal of demonstrating the mapping, development and optimization of a company's business model. According to this model, there are nine key success factors:
- Key partner
- Key activities
- Key resources
- Unique feature
- Customer relations
- Customer segments
- Cost structure
- Sources of income
Its application is particularly suitable for existing companies, and geared to their needs.
By contrast, the "lean canvas", as an adaptation of the BMC, focuses on start-ups and innovation. It is based on the "lean startup" philosophy and takes into account the extreme uncertainty in which startups move. Yeah, that's you. Awesome, right?
BMC and Lean Canvas have many structural similarities. Ash Maurya made the following adaptations for the "lean canvas", as compared to the BMC:
- "Key partner" becomes "problem description"
- "Key activity" becomes "solution description"
- "Key resources" becomes "measures"
- "Customer relationship" becomes "unfair advantage" (entry barrier for future competitors)
As an innovative startup you need just that. You will encounter a lot of risks. With the "lean canvas", you can break them down, step by step.
That does sound pretty much like a business plan, right? Basically, the same considerations are made with this as with BMC and Lean Canvas. Without going into detail, a business plan is much more extensive, time-consuming and less flexible. Therefore, for startups: Hands off, as long as no "lean canvas" has been created. An early business plan can be a waste.
Don't leave your path. (pic: pixabay.com)
4. Lean startup - what is it?
"Lean" - a crucial keyword of the 21st century. Sounds fancy – it is, too. With the lean startup approach, the focus lies on keeping processes as lean as possible, meaning that they are implemented pretty fast, with the best possible use of scarce resources. Efficient and effective.
There is a lot of "learning-by-doing" going on, in this game. When you test service or product with prototypes on the market, you get the opportunity to receive your feedback directly from customers. And believe me, this is very valuable. It will help you avoid the risk that your product will miss the market.
So, the goal is a quick, repeated improvement and validation of your product as well as your business model. That sounds good, but what are the benefits of consistent lean business? I can tell you that.
Higher financing opportunities: The lower the risks, the greater the likelihood that an investor will invest in your startup. Of course, potential investors are interested in their financial resources being used "lean."
Reflecting, Reflecting, Reflecting: Everyday start-up life is characterized by a great deal of uncertainty and hypotheses. However, it is important to ask the right questions, to test assumptions and to recognize all connections. "Lean startup" gives you just the right tool: its "lean canvas".
Failure? No, thank you: The Lean Startup method will reduce the chances of your startup getting stuck. For example, it allows the emergency brake to be pulled in time before too much money was wasted. This can instead be invested in a new business idea.
Structure: startup and structure - unfortunately, there is rarely a common. Chaos is a good thing here. Still, some order can not hurt. A lean startup achieves this order within creative chaos.
5. Lean Startup - how do I do that?
Wow, that's a pretty multi-faceted question. You already have an idea of what the method entails, but now it's about asking yourself: How to get started?
It is crucial to reduce risks - specifically and orderly. To do this, you use so-called business experiments in a structured manner, to verify or falsify assumptions. Using the "lean canvas", you can gradually reduce risks along the way. In the checklist "My first business idea" available for my subscribers, you will find a detailed list of which risks should be dealt with in which order.
Characteristically, a "lean startup" combines the following three phases: Problem-Solution Fit, Problem-Market Fit and Scale. In Phase Three, Scale, you're selling with the intention of gaining in volume. This will be exciting, I tell you! But beware, I advise against scaling too soon. Because, without reducing risks, there is a risk that time and resources will be invested incorrectly. Well, is your head on the verge of explosion, already? ;-)
I know, you have already received a lot of input on the topic of business ideas. But now we come to the tool itself: The "lean canvas". It looks something like this:
What you see here is a "lean canvas" by Ash Maurya. "Smart-up" of the Lucerne University
of Applied Sciences has complemented this with "Persona", "Use Cases" and "Business Opportunity".
I think this is model really marvelous, and I like to explain it in my checklist "My first business idea" step by step, as it is the perfect tool for you, on the way to the success story of your startup. You just have to do one thing: subscribe. ;-)
But here are some general facts about the canvas: The "lean canvas" consists of different building blocks that deal with various questions. The order in which you move through the canvas does not matter. Nevertheless, classically, first the problem (here, "1") is compared with the solution ("4"). The gray numbers are primarily for orientation. Everything happens in the name of risk reduction.
There are a lot of different assumptions about the startup, at the beginning. I suggest you first test those that most threaten your business model. After a while, it makes sense to test out different business models that correspond with your idea. In the end, you can choose the one that convinced you the most.
The easiest way is to print the Canvas in A3. For example, I prefer to work with Post-Its, which vary in color depending on the theme.
Important: do not lose track! Document every step, every experiment, every consideration. Look at the canvas as a snapshot. If you keep track of the processes, it will be easier to understand the development in hindsight. Also, something for all pack animals: understanding and team spirit increase if you complete it together!
6. And now comes the business plan?
Properly applied, the "lean canvas" can be transferred into the BMC. It's quite handy that the two have the same structure, visually. Since five building blocks even match, the transition from one to the other comes pretty naturally.
If you supplement your "lean canvas" with a financial plan, you already have a "business plan light" at hand. This is more than enough, for the moment.
The lean startup approach is a valuable opportunity: By minimizing risk, learning quickly and being able to make mistakes in the early stages of the company, the chances of success for startups are greatly increased.
That's it for this time - stay tuned! And do not miss my next tips.