For the last couple of years I have been using extensively Ash Maurya’s Lean Canvas for early startups. I find it more suitable for these startups who already have an idea but are missing many pieces of the puzzle that we call Business Model.
The Lean Canvas is agile, simple (but not simplistic), informative and at the same time easy to understand. As soon as I saw it, I realised that it is the most essential tool I can use. I bring it out in my very first meeting with the startup and ask him/ her to fill it up to the best of his/ her abilities.
The results are shaking the startups to their core. They realise that they have to face issues they have not encountered before. Most of them have been focusing on the customers, although they did not bother to divide them into customer segments. Some of them have already tried to identify their Unique Value Proposition, albeit unsuccessfully. Only a minority focused on the customers’ problems and tried to find a solution for them!
On the whole, the Lean Canvas helps me to create an insightful first meeting that gives feedback to the startup, while it allows him/ her to revisit individual issues of the Business Model.
For the past few months, though, I started feeling increasingly uncomfortable every time I used the Canvas. While I was trying to focus on the technical aspects of the business development, the startups were eager to inform me about their dreams, aspirations, family situation and a lot of other aspects that I considered irrelevant to the task at hand.
And then it hit me! Personal life is not irrelevant to business growth! Quite the opposite! Personal life should be integral to business development and should be worked into our business models. After all, our emotions, feelings, environment, wishes, background etc will always affect how we work or build our future empire.
I had to take a long look at the Lean Canvas to figure out where I could fit the implications of personal issues on the business, without changing its core. The two areas I identified, as possible candidates for revision, were Costs and Revenues, the two boxes at the bottom of the page.
On the left hand side, the Costs include Customer Acquisition, Distribution Costs, People, Hosting etc. These are the actual monetary costs of our business proposition. They do not take into account, though, the personal costs a startup will face.
What or Who is going to suffer in their lives, while they build their businesses? How many hours are they going to stay away from their kids, girlfriends, family and friends? How many relationships will break down in the process? What are they willing to sacrifice in the face of success? All of these questions and answers should be weaved into the existing model, since they will affect the business one way or another.
On the right hand side, we see the box on Revenue Stream, including Revenue Model, Life Time Value, Revenue and Gross Margin. Once more, the gains are exclusively expressed into monetary terms.
How many of us are into the business building for the money alone? I know that I want many other things. Success, acknowledgment, thrill, excitement, a sense of fulfillment, the ability to help people and many other things. Some of these are more powerful than the monetary gains a business will bring and they will sustain me on my difficult ‘trip’.
Even if such considerations are not directly related to the information investors or other funding bodies would like to have, they are essential for the success (or eventual failure) of the startup. They can make or break the entire process and should be taken into account at an earlier rather than later stage.
Even if we cannot count their monetary value (unless there is a study that assesses them, which I am not aware of), the personal costs and revenues can make or break the business process. When the startup is clear about what s/he will lose and what s/he will gain, s/he will be motivated to achieve faster the final goal.
These are just a few initial thoughts on the matter, so I would appreciate any comments.
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Thomas Klem Andersen Says :
A very good point that deserves serious attention
As we have learned a startup is not just a small version of a big company. This insightful point I believe has prevented many unfortunate logical and practical short circuits. Another important but less emphasized point is that an entrepreneur is not just a reflection of his or her startup venture.
Behind most ventures lie true human ambition, heart and vision. Such ingredients are a necessary although not sufficient condition for startup success, as you need to be committed for the long run.
Making ones fundamental values transparent as the sustainable drivers they are is the most skillful way to nurture motivation, commitment and impact and as such it paves the way for startup success. If such transparency doesn’t lead to commercial success however, as is often the case, the time and energy invested will not have been in vain as you will have lived out your true aspirations. Thus you will also be better suited to try again armed with the experience and insights of your previous heartfelt attempt. On the flipside a lack of heart will most likely be the number one reason for a startup venture to fail, and realizing this from the start will probably deter many from investing their energy in projects that will never even make it to the runway.
For this reason an alignment between personal aspirations, professional career and startup ambitions is important. Luckily this is often the case, as many entrepreneurs can’t help but work to fulfil a dream and make an impact. But it is easy to lose sight of the personal drivers, when things get rough or everyday operations hijack the agenda.
Thus as is suggested above personal inquiry should be integrated with professional development and startup projects. Startup consultants, mentors and personal coaches should not only think in monetary and commercial terms but in addition expand their vocabulary and probing questions to include personal values and life close issues.
Tristan Kromer Says :
If you’re going to revise into yet another canvas, please take the opportunity to revise the shape, and not just crossing out the name of one box and replacing it with another. The shape needs to relate to what you want to convey. Same criticism I have for Ash’s canvas which arbitrarily kept the shape of the BMC and wound up with the Customer and the Problem very distant to one another.
Rod King Says :
You raise some important issues regarding Ash Maurya’s Lean Canvas as well as Alexander Osterwalder’s Business Model Canvas. Work on business modeling is just starting to get momentum. However, we have still got a lot to do. See my critique of the Business Model Canvas:
“Why the Business Model Canvas is Good But Not Great”
http://www.slideshare.net/RodKing/why-the-business-model-canvas-is-good-but-not-great-rod-king
One of the core criticisms of the Business Model Canvas is it fails to illustrate its macro-logic which can be expressed in terms of 3 Engines: Enterprise Engine (Value Creation); Growth Engine (Value Discovery); Value Engine (Value Sharing).
Had Osterwalder highlighted these engines on the Business Model Canvas, Maurya would have made clearer that his Lean Canvas deals only with Growth and Value Engines. Consequently, the Lean Canvas does not completely represent a business model.
Also, the Value Engine is weakly presented on the Business Model Canvas which deals with value only in terms of “Cost Structure” and “Revenue Streams.” For business modeling to be widely applicable, the respective categories for value should be “Pain” and “Delight (Gain).” These latter categories would facilitate the integration between business and personal modeling about which you talk above. But perhaps, the easiest way to bring in a personal dimension is to make explicit the startup’s “Mission/Vision/Purpose” which becomes the end to which a business model aspires.
A framework – Business Model Jigsaw – for modifying and inventing business model graphics is presented here:
http://www.slideshare.net/RodKing/the-business-model-jigsaw-game
The Business Model Jigsaw takes a platform approach to modeling and facilitates the translation of business tools including the Business Model Canvas into games.
Admittedly, what I have presented above may sound like theory. But, it is not. Should you have comments or questions, I’d be willing to answer them. In conclusion, I’d say that a Business Model Canvas should be a component of a Personal Model Canvas. Although the companion book, “Business Model You” deals with creating and managing “personal business models,” it’s not clear how the two models can be integrated. If you’d like to discuss that further, let me know.
In the meantime,
best regards.
Rod.
Michael Issa Says :
Constantina – rarely do I agree with all of the comments, but in this case I think Rod, Thomas, and your own original post are right on target.
Evaluating personal impact as function of the business model is bereft both Osterwalder and Ash’s canvas while clearly a quantifiable metric that can similarly be normalized.
You may like Alex Cowan’s approach, which is really an amalgamation of Design Thinking and Lean Startup which uses Empathy Maps, Demographic Profiles, Customer Interviews, and Surveys to fill in, including some of the emotional impacts.
Similarly, the Product Market Fit Canvas, which is essentially an empathy map, may provide an easy and well known way of evaluating the emotional revision you desire.
Ok, here is my plug, at http://quipuapps.com/ you can use any or all of these: Lean Canvas, Osterwalder Canvas, Product Market Fit Canvas, Empathy Maps, Demographic Profiles, Rubrics and surveys to create a programatic approach to iterative startup management.
Happy to share exactly how.
Michael