Our product development world is filled with canvases. I mean, if you haven’t developed a canvas for your framework or idea are you even really a consultant? I kid! I kid! (only a little). Jokes aside, there is value in canvases. They are single-page facilitation tools that enable teams to have the right conversation about an initiative they are about to undertake. Perhaps the most popular canvas, and the one that started the canvas craze in the first place, is Strategyzer’s Business Model Canvas.
The Business Model Canvas
Created by Alex Osterwalder and the team at Strategyzer and immortalized in the best selling book, Business Model Generation, the BMC has helped countless organizations take an entrepreneurial, assumptions-based look at their business ideas and initiatives before investing heavily. If a product or service creates value in a market, the business model determines who captures it and how it’s captured. The BMC visualizes that and helps reduce the risk of implementing the wrong business model for your product. In fact, a business model can determine the difference between a successful product and a failed one.
The Lean UX Canvas
With the success of the Lean UX framework and an increased consistency in the way we were implementing and teaching it, we created the Lean UX Canvas a few years ago. Like the BMC, we designed it as a facilitation tool for teams working to ensure a customer-centered and agile perspective to product and feature design and development. Here’s a short video on how to use the Lean UX Canvas.
Can the Business Model Canvas and Lean UX Canvas be used together?
In short, yes. The BMC was always designed to test the viability of a business idea while the Lean UX Canvas was designed to test the viability of a product, service or feature to help deliver business value. The work you do in the BMC creates context and foundation for the discussions you’ll have working through the Lean UX Canvas. It should be done first and have enough of the assumptions in it validated before proceeding to a product or feature level discussion using the Lean UX Canvas.
Here’s a box-by-box breakdown of how to use the two as complementary tools in your business and product development process.
Value Proposition → Problem Statement
At the center of the BMC is the value proposition of your service. What customer needs are we meeting? What gap are we filling in the market? Often this is articulated as a high-level statement, for example, “Make it dead-simple to apply for a mortgage.” In the Lean UX Canvas Box 1 we ask you to write a business problem statement. Once you have a value proposition, you can refine it into a more specific issue you’d like to solve in Box 1 and position it at a level your team can influence.
Customer segments → Proto-personas
The BMC asks you to list the various customer segments you will serve. Once you’ve created a list of potential target audiences you prioritize it into the ones you believe you should attract first. Box 3 in the Lean UX Canvas challenges you to create a proto-persona for that slice of your target audience. Here you can refine your team’s thinking about the qualities and merits of this persona and decide if, indeed, they should be the first folks you seek to influence.
Channels / Customer Relationships → Solutions
The Channels and Customer Relationships boxes in the BMC ask for ways you will reach and service your audience. While there isn’t a direct correlation between these boxes and the Lean UX Canvas, some of these ideas will likely end up in Box 5, Solutions. For example, you might decide that you’ll distribute and provide customer service for your product using a mobile app. When you get to Box 5 in the Lean UX Canvas you’ll want to ensure that mobile features are reflected there. You’ll also want to add the benefits of these channels and relationships in Box 4, User Outcomes and Benefits, in the Lean UX Canvas.
Key Partners → Solutions
This is another unique BMC question and an appropriate one to ask when considering if there’s even a viable business opportunity to pursue. It’s critical to understand if you’ll need partners, suppliers and other vendors in order to be successful. If the materials they supply end up being customer-facing then some of these partners could end up in Box 5, Solutions, of the Lean UX Canvas. For example, if you’re going to partner with CNN for content then this is something that will end up in a product hypothesis downstream and worth adding to the Lean UX Canvas.
Key Activities / Key Resources → Most important things to learn
The key activities and resources boxes in the BMC list what needs to happen in order to achieve your value proposition, maximize your distribution channel and drive your revenue streams. For example, if you’re going to have CNN content as part of your value proposition you need to secure licensing agreements that you can afford and ensure they’ll allow you to distribute that content via your desired channels. These activities are significant risks to your business model and, if your team is involved in realizing these activities, can be put into Box 7 of the Lean UX Canvas. In Box 7 we ask, “What’s the most important thing we need to learn first?” about our product or service. For some teams that will be a very tactical product-level question. For others though, we may first need to learn about the desirability and viability of hosting CNN content in our mobile application.
In this part of the BMC you list what the costs of your business will be and which of your key resources and activities you believe are the most expensive. These are critical components to consider for any business model discussion. This box doesn’t have a direct corollary in the Lean UX canvas since it is a foundational aspect of any business model and not always relevant to a product or feature level discussion.
Revenue Streams → Most important things to learn
Similar to cost structure this is uniquely a business model conversation. It does make an assumption that you’ll deliver a solution of enough value that customers will pay for it, perhaps through various channels. These assumptions are risky and they evolve over time. As the product is developed and the business grows we continue to look for ways to grow existing revenue streams and develop new ones. Sometimes, “Will people pay for it?” is the next most important thing we need to learn about one of the new features we’re building with the Lean UX Canvas. In this case, the revenue stream question goes into Box 7 as one of the things we’ll need to test.
What’s the least amount of work we need to do to learn the next most important thing?
Box 8 in the Lean UX Canvas is where we design our product and feature level experiments. While there isn’t an explicit corollary in the BMC there is a shared expectation in both tools that you’ll test the assumptions you’ve added to your canvas. In the Lean UX canvas we ask for that explicitly in Box 8. If you’re working at the product or feature level then your experiments will be tactical and likely won’t make or break the business model of the service. However, there may be new product lines or desired target markets that could significantly impact the business that Box 8 could help you test.
Use both canvases, at the right time
Big questions about new ideas, ways of growing our business or innovating new products are perfect for the Business Model Canvas. As you increase your confidence in your BMC assumptions, break out the Lean UX Canvas to help you think through more tactical implementation ideas you’ll need to validate. These two canvases complement each other and work together to create an increasingly tactical conversation that ensures we’re not just pursuing viable products but high-growth businesses as well.