The business model canvas is a framework to understand the key building blocks and components of a company. The lean startup canvas is a variation of the business model canvas, and it serves the same scope but with an emphasis on startups. Therefore, where the business model canvas is more suitable to understand the core components of larger organizations, a lean canvas is primarily focused on problems and solutions as key foundational elements for a startup.
Aspect
Business Model Canvas (BMC)
Lean Canvas
Purpose and Background
The Business Model Canvas (BMC) is a strategic management tool for visualizing, describing, and analyzing a business’s entire business model. It was developed by Alexander Osterwalder and Yves Pigneur and introduced in their book “Business Model Generation” in 2010.
The Lean Canvas is a one-page business plan template designed for startups and entrepreneurs to quickly capture and test their business hypotheses. It draws inspiration from the Lean Startup methodology, popularized by Eric Ries in his book “The Lean Startup.”
Components and Structure
The BMC consists of nine building blocks, including Customer Segments, Value Proposition, Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key Partnerships, and Cost Structure. Each block represents a specific aspect of the business model.
The Lean Canvas condenses the key aspects of a business model into a one-page format, focusing on Problem, Solution, Key Metrics, Unique Value Proposition, Unfair Advantage, Channels, Customer Segments, Cost Structure, and Revenue Streams. These components are strategically selected to capture essential information in a compact way.
Complexity and Detail
The BMC is comprehensive and provides a holistic view of a business’s model. It encourages detailed analysis of each building block, making it suitable for established companies or those with complex operations.
The Lean Canvas is simplified and aims for clarity and brevity. It intentionally omits some elements found in the BMC to maintain a clear focus on key aspects. This makes it ideal for startups that need to iterate quickly and pivot as they gather feedback.
Customer-Centric Approach
While the BMC considers customers within various building blocks, it does not explicitly emphasize customer problems and solutions as the Lean Canvas does. It addresses customer-related concerns in the Customer Segments and Value Proposition blocks.
The Lean Canvas places a strong emphasis on understanding customer problems and developing solutions that address them effectively. It recognizes that startups must prioritize customer-centricity to succeed.
Hypothesis Testing and Validation
The BMC is more focused on describing an existing business model, making it less suitable for hypothesis testing and validation, especially in early stages. It serves as a snapshot of how an established business operates.
The Lean Canvas is designed for hypothesis-driven entrepreneurship. It encourages startups to define and test their key assumptions rapidly. The Problem and Solution sections, in particular, support this iterative approach.
Iterative and Agile Approach
Changes to the BMC may require revising multiple building blocks, which can be time-consuming and less agile for startups in rapidly changing markets. It’s better suited for businesses with relatively stable models.
The Lean Canvas encourages quick iterations and adjustments. Startups can pivot efficiently based on market feedback and learning because the canvas focuses on critical assumptions and solutions.
Visual Representation
The BMC uses a visual canvas format, making it suitable for workshops and collaborative discussions within teams or across different stakeholders. This visual approach aids in brainstorming and fostering a shared understanding of the business model.
The Lean Canvas employs a one-page format that is concise and easy to communicate. It ensures alignment among team members and stakeholders, especially in fast-paced startup environments.
Strategic Planning Tool
The BMC is often used for strategic planning, business model analysis, and presenting an overall view of how a business creates, delivers, and captures value. It is particularly valuable for established companies looking to optimize their existing models.
The Lean Canvas is more focused on helping startups develop a concise and actionable plan for building, testing, and growing their businesses. It aligns well with lean startup principles and practices.
Tradition vs. Innovation
The BMC is associated with traditional business planning and analysis and is effective for established companies. It captures a snapshot of an existing business model that may have evolved over time.
The Lean Canvas aligns with lean startup principles and methodologies, which prioritize speed, experimentation, and adaptation. It is particularly beneficial for startups aiming to validate their ideas efficiently.
The business model canvas is a framework proposed by Alexander Osterwalder and Yves Pigneur in Busines Model Generation enabling the design of business models through nine building blocks comprising: key partners, key activities, value propositions, customer relationships, customer segments, critical resources, channels, cost structure, and revenue streams.The lean startup canvas is an adaptation by Ash Maurya of the business model canvas by Alexander Osterwalder, which adds a layer that focuses on problems, solutions, key metrics, unfair advantage based, and a unique value proposition. Thus, starting from mastering the problem rather than the solution.
Similarities between Business Model Canvas and Lean Canvas:
Canvas Structure: Both frameworks use a visual canvas structure to present key elements of a business model or startup concept.
Building Blocks: They both identify essential building blocks and components that contribute to the overall success of a business or startup.
Strategic Focus: Both canvases help entrepreneurs and businesses strategically analyze and design their models for success.
Holistic Approach: They provide a comprehensive view of the key aspects that need consideration in the development of a business or startup.
Differences between Business Model Canvas and Lean Canvas:
Emphasis:
The Business Model Canvas is designed to understand the key building blocks and components of a company’s businessmodel, suitable for both established organizations and startups.
The Lean Startup Canvas is a variation with a specific focus on startups, emphasizing problems and solutions as key foundational elements.
Suitability:
Business Model Canvas is more suitable for understanding the core components and strategies of larger organizations or businesses.
Lean Canvas is primarily focused on providing a concise and agile framework for startups, centered on early-stage development and problem-solving.
Development Stage:
Business Model Canvas can be used throughout the lifecycle of a business, from inception to growth and expansion.
Lean Startup Canvas is particularly helpful during the early stages of a startup’s development when validating the problem-solution fit and refining the value proposition.
Elements Included:
Business Model Canvas comprises nine building blocks, including key partners, key activities, value propositions, customer relationships, customer segments, critical resources, channels, cost structure, and revenue streams.
Lean Startup Canvas, as adapted by Ash Maurya, adds five elements focusing on problems, solutions, key metrics, unfair advantage, and unique value proposition, with a strong emphasis on understanding and solving customer problems.
Problem-Centric Approach:
While both canvases consider value propositions and customer segments, the Lean Startup Canvas puts more emphasis on mastering the problem and validating the problem-solution fit before delving into the solution.
Versatility:
Business Model Canvas offers a broader view of the businessmodel, including customer relationships and revenue streams, making it more comprehensive for established businesses.
Lean Canvas is a more concise and focused framework, ideal for startups seeking rapid iterations and quick adjustments to their business model based on validated learning.
The ADKAR model is a management tool designed to assist employees and businesses in transitioning through organizational change. To maximize the chances of employees embracing change, the ADKAR model was developed by author and engineer Jeff Hiatt in 2003. The model seeks to guide people through the change process and importantly, ensure that people do not revert to habitual ways of operating after some time has passed.
You can use the Ansoff Matrix as a strategic framework to understand what growthstrategy is more suited based on the market context. Developed by mathematician and business manager Igor Ansoff, it assumes a growthstrategy can be derived from whether the market is new or existing, and whether the product is new or existing.
The business model canvas is a framework proposed by Alexander Osterwalder and Yves Pigneur in Busines Model Generation enabling the design of business models through nine building blocks comprising: key partners, key activities, value propositions, customer relationships, customer segments, critical resources, channels, cost structure, and revenue streams.
The lean startup canvas is an adaptation by Ash Maurya of the business model canvas by Alexander Osterwalder, which adds a layer that focuses on problems, solutions, key metrics, unfair advantage based, and a unique value proposition. Thus, starting from mastering the problem rather than the solution.
The Blitzscaling business model canvas is a model based on the concept of Blitzscaling, which is a particular process of massive growth under uncertainty, and that prioritizes speed over efficiency and focuses on market domination to create a first-scaler advantage in a scenario of uncertainty.
A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is valueinnovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.
Business analysis is a research discipline that helps driving change within an organization by identifying the key elements and processes that drive value. Business analysis can also be used in Identifying new business opportunities or how to take advantage of existing business opportunities to grow your business in the marketplace.
In the 1970s, Bruce D. Henderson, founder of the Boston Consulting Group, came up with The Product Portfolio (aka BCG Matrix, or Growth-share Matrix), which would look at a successful business product portfolio based on potential growth and market shares. It divided products into four main categories: cash cows, pets (dogs), question marks, and stars.
First proposed by accounting academic Robert Kaplan, the balanced scorecard is a management system that allows an organization to focus on big-picture strategic goals. The four perspectives of the balanced scorecard include financial, customer, business process, and organizational capacity. From there, according to the balanced scorecard, it’s possible to have a holistic view of the business.
A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is valueinnovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.
A gap analysis helps an organization assess its alignment with strategic objectives to determine whether the current execution is in line with the company’s mission and long-term vision. Gap analyses then help reach a target performance by assisting organizations to use their resources better. A good gap analysis is a powerful tool to improve execution.
The GE McKinsey Matrix was developed in the 1970s after General Electric asked its consultant McKinsey to develop a portfolio management model. This matrix is a strategy tool that provides guidance on how a corporation should prioritize its investments among its business units, leading to three possible scenarios: invest, protect, harvest, and divest.
The McKinsey 7-S Model was developed in the late 1970s by Robert Waterman and Thomas Peters, who were consultants at McKinsey & Company. Waterman and Peters created seven key internal elements that inform a business of how well positioned it is to achieve its goals, based on three hard elements and four soft elements.
McKinsey’s Seven Degrees of Freedom for Growth is a strategy tool. Developed by partners at McKinsey and Company, the tool helps businesses understand which opportunities will contribute to expansion, and therefore it helps to prioritize those initiatives.
The McKinsey Horizon Model helps a business focus on innovation and growth. The model is a strategy framework divided into three broad categories, otherwise known as horizons. Thus, the framework is sometimes referred to as McKinsey’s Three Horizons of Growth.
Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition. Published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s. The model breaks down industries and markets by analyzing them through five forces.
According to Michael Porter, a competitive advantage, in a given industry could be pursued in two key ways: low cost (cost leadership), or differentiation. A third generic strategy is focus. According to Porter a failure to do so would end up stuck in the middle scenario, where the company will not retain a long-term competitive advantage.
In his 1985 book Competitive Advantage, Porter explains that a value chain is a collection of processes that a company performs to create value for its consumers. As a result, he asserts that value chain analysis is directly linked to competitive advantage. Porter’s Value Chain Model is a strategic management tool developed by Harvard Business School professor Michael Porter. The tool analyses a company’s value chain – defined as the combination of processes that the company uses to make money.
Porter’s Diamond Model is a diamond-shaped framework that explains why specific industries in a nation become internationally competitive while those in other nations do not. The model was first published in Michael Porter’s 1990 book The Competitive Advantage of Nations. This framework looks at the firm strategy, structure/rivalry, factor conditions, demand conditions, related and supporting industries.
A SWOT Analysis is a framework used for evaluating the business‘s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.
Businesses use scenario planning to make assumptions on future events and how their respective business environments may change in response to those future events. Therefore, scenario planning identifies specific uncertainties – or different realities and how they might affect future business operations. Scenario planning attempts at better strategic decision making by avoiding two pitfalls: underprediction, and overprediction.
The STEEPLE analysis is a variation of the STEEP analysis. Where the step analysis comprises socio-cultural, technological, economic, environmental/ecological, and political factors as the base of the analysis. The STEEPLE analysis adds other two factors such as Legal and Ethical.
A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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