The most important tasks of a startup are to reduce risk and increase certainty by learning as quickly and efficiently as possible.
The Startup Canvas supports startups in these tasks. It provides a dynamic overview of their total concept, including the business model which makes it easy to get the whole team on one page and to validate individual parts of the concept.
Working with the Startup Canvas is not difficult, especially if you already have experience with other canvases such as the Business Model Canvas and the Value Proposition Canvas.
First print out the canvas as large as possible, preferably in ANSI E (A0) size and hang it somewhere on the wall where as many colleagues as possible have a view of it during the daily work.
Then provide all parts of the canvas with assumptions. Preferably do this with the entire startup team. It helps enormously to gain consensus within the team so that you can be sure that everyone is working on the same concept.
As with other canvases, you don't write directly on the canvas, but on post-its. You will continuously update the canvas as soon as you have gained new facts or insights.
‘Baby, startups are a canvas, not a spreadsheet’
Tip: use high quality sticky notes. They cost more but they're worth it. Cheaper ones will fall off the canvas constantly.
Okay, and now what? Now you get out of the building. Talk to your (potential) customers and users. Interview them, observe them, test (parts) of your concept with them. Learn as much and as quickly as possible. Validate your assumptions, start with the most risky assumptions. Those are the assumptions that, should they be invalidated, have the greatest impact on your concept.
Describe the different groups of users and paying customers. Which segment will you provide value for? Who will pay for that value? Who are the users? What is the relationship between the user and the buyer? Who convinces whom to purchase / use the product? Try to be specific, because a product or service can never be conceived and designed for everything and everyone.
Tip: Do you have multiple customer and / or user segments? Then use a different color sticky note for each segment on the canvas.
Describe the early adopters of your product or service. What makes this group different from other customers and users? This is how you recognize an early adopter:
Knowing who your early adopters are is really helpful because they can (and often want) to provide you with valuable feedback and insights. If you don't have a complete and working whole product yet, it is difficult to collect valuable feedback from mainstream markets.
Mainstream markets are often not yet interested in your concept or MVP and have less of a need to help you further. But that of course does not mean that your idea is not good. To be able to validate that, you will have to test with early adopters first.
Describe the relevant pains, problems and needs of your target segments. Remember: any profitable product or service solves a problem and / or meets a need.
Describe which products, services, actions and people currently offer a (partial) solution for comparable problems in your or in other markets.
Describe the value your product or service offers to your customers and users.
Describe your whole product. That is all you actually deliver to your customers and users, plus everything else that is needed for a "compelling reason to buy".
A good example is Apple's first iPod. When Apple introduced the iPod in 2001, several MP3 players were already on the market. Innovators and early adopters saw the convenience of such a small music player, but they did not really go mainstream. That was not due to the product itself, but because the whole product was not complete and mainstream markets simply expect a whole product.
Early adopters are willing to put together the whole product themselves. Mainstream markets do not want to make this effort and buy a whole product.
The player on its own was useless without the actual music. But there was no store where you could buy MP3s. Instead, you had to convert your purchased CDs to MP3 files yourself. And it wasn't easy at all. You had to use a tool for that which asked lots of difficult questions about file formats, bit rate, codec etc.
Apple was smart enough to think about the whole product. In addition to the MP3 player, Apple also introduced the iTunes store in 2001. A digital store where you could buy a song for 99 cents. With the push of a button, the music was on your iPod. In addition, the iPod came with the well-known white earplugs.
The whole product was therefore the MP3 player, earplugs and iTunes. Apple has chosen to develop the whole product entirely in-house (partly made possible by the acquisition of SoundJam MP in 2000), but this is not necessary. You can also enter into smart partnerships for this.
Describe the product and it’s value. Try to explain it in:
- One to three words
- One sentence (+- 5 seconds)
- A few sentences (+- 30 seconds)
Describe the parties you will work with to realize the whole product. What is their contribution and what is their role?
Describe the main costs you incur to create, promote, sell, supply and maintain the total product. Are they one-off costs, fixed costs or do they depend on the sales volume?
Describe the sources of income (finacial or other earnings). Is it one-time income, or recurring income?
Describe the different ways in which you will bring in new customers and users, keep them in, and how you will get more out of your existing customers and users. How are you going to scale up later? What is the "growth engine" and associated churn rate and growth factor (see Lean Startup, Chapter 10)?
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