How to build a business plan using the lean canvas

1. SESSION II:
How to build a
Business Plan
Eitan Katz
eitank@gmail.com

2. “Startups operate under conditions of extreme uncertainty.”
Eric Ries
“A startup is a temporary organization used to search for a
repeatable and scalable business model.”
Steve Blank

3. “Startups operate under conditions of extreme uncertainty.”
Eric Ries
Increase odds of success through rapid experimentation

4. “Startups operate under conditions of extreme uncertainty.”
Eric Ries
Identify risks
Define experiments
Execute and measure
Analyze
Repeat

5. 5
The Lean Canvas focuses on Risk

6. 6
Risk
Problem
Solution
Unfair
advantage
Key
metrics
Customer
segments
Channels
Value
Proposition

8. 8
Let’sgettowork☺

9. Customer segments
1. Who are the customers? List all potential
segments
2. Can they be further segmented? Try to be as
focused as possible
3. Who are the users?
4. Who would be the early adopters within the
customer segments?

10. The problem
1. What are the 3 main problems your customers
have?
2. Are they aware of the problem?
3. Do they want the problem to be solved?
Back your assumptions with evidence: talk to customers!
“A problem well stated is a problem half-
solved.”
– Charles Kettering

11. Unique value proposition
What’s your promise to your customer?
- Distill it to a single statement that depicts the problems
you’re addressing
- What would amaze your customer and make him/her
want to hear more?

12. Unique Value
Proposition:
A tool, for video
distributors, which will
enhance videos in
order to facilitate
information search by
making its content
more accessible.

13. Unique Value
Proposition:
Making videos
searchable

14. The solution
What is the minimum feature set (MVP) that
demonstrates the UVP up above?
- List the top 3 components of your solution
Back your assumptions with evidence: talk to customers!
“Perfection is achieved, not when you have
nothing left to add, but nothing left to take
away”
– Antoine de Saint-Exupery

15. Unfair advantage
What are your advantages? (that would cause other
players fail)
- Good examples: network effect, unique IP, loyal customer base,
brand and reputation, disruptive business model
- Bad examples: first-mover, size, price
“A true unfair advantage is something that
cannot be easily copied or bought”
-- Jason Cohen

16. Cost structure
List out all your fixed and variable costs
Must include:
- Customer acquisition cost (CAC)
- Average cost of service (CoS)

17. Revenue streams
Identify your revenue model
Examples: Subscription, freemium, license fee.
Outline back-of-the-envelope assumptions:
- Lifetime value (LTV)
- Recurring revenue (RR), average recurring
revenue (ARR)
- Gross margin
- Break-even point

18. Channels
Which free and paid channels you can use to
reach your customer?

19. Key metrics
1. What are the main metrics (and what is
the single macro metric or goal) that drives
what you do?
2. Which experiments you will run to optimize
the metric?
Note: every experiment should formulate a falsifiable hypothesis
which requires you to identify a metric you’ll use to measure
success or failure
“A startup can only focus on only one metric. So you
have to decide what that is and ignore everything else”
-- Noah Kagan

20. Bonus slides

21. Metrics - 5 Steps to Success
User acquired (a sign up in SaaS)
The user uses your product, indicating a good first
visit
The user continues to use the product, indicating she
likes it
The user pays you
The user likes your product so much he refers other
new users

22. Example of Conversion Metrics

23. Define the Metrics for Your Product
Metric What does this metric mean, in relation to
your product?
Current state
Acquisition (x signups / month)
Activation
Retention
Revenue
Referral
2. Choose one to optimize through experiments
1. Define the top metrics

24. Cheat sheet