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.