How a 1-Page Business Model Will – and Won’t – Help Your Lean Startup

During my Startup Help sessions with entrepreneurs worldwide I am frequently asked to review a 1-page summary of their business assumptions. Usually the team has filled out Ash Maurya’s Lean Canvas or Alexander Osterwalder’s Business Model Canvas.

I recommend that entrepreneurs – especially those new to Lean Startup – fill out a canvas. After 3 years of using them myself and with hundreds of startups I can identify situations where they are critical – and situations where they are less useful. I hope this post inspires more thinking & helps you decide whether a 1-page business model is useful for your team.

Benefits of 1-Page Business Models

Much Better Than a Business Plan

Many entrepreneurs still think they need to write a business plan. My advice is to start with a 1-page canvas first – you can always write the plan later.

I wrote a business plan for my first startup; it was among the most useless exercises I’ve ever undertaken. AFAIK, nobody every read it and with good reason – most startups sink or swim based on a few assumptions & execution. It makes a lot more sense to just write those assumptions down and figure out if they’re true – exactly what you can do with a 1-page model canvas.

Great for Extended Team Communication

Startup life is a whirlwind. Founders are often shocked to realize that team-members, investors and mentors have radically different notions of what the company does. As a startup investor & adviser I empathize: remembering what a team is doing weeks after the last meeting is tough.

1-page models are excellent for documenting how a vision evolves and keeping everyone on the same page. They are are succinct and portable – exactly what a startup needs in today’s fast-paced world.

Excellent for Existing Markets or when Customer Problems are Clear

If you’re entering an existing market or one where you’re solving a clear customer problem, a 1-page canvas is an excellent way to document learning – much of what you need to discover can be figured out through dialog with potential customers (Steve Blank’s “Get Out of the Office” motto).

You’ll get new insights from every potential customer conversation – a canvas is a great place to document them.

Great Teaching Tool

1-page business models do an excellent job laying out the high-level problems that every business has to solve – perfect for a classroom. Filling one out takes 30 minutes and sets the framework for an engaging dialog at schools or accelerators.

Limitations of 1-Page Business Models

Less Useful for New Market (“Blue Ocean”) Products

If you’re creating a new market you’ll find a 1-page business model less useful because there is so little available data – particularly in the beginning. Sure, you can fill out a canvas but you’ll quickly realize that 95% of your effort is around trying to understand the customer problem.

Success in creating a new market means acquiring deep empathy for what customers are trying to do and evangelizing like hell – it can take months or years. The most effective process I’ve found for these situations is Jeff Gothelf’s Lean UX.

Lack Dimensions of Risk & Time

Most Lean Startups spend 90% of their time around a few key questions such as:

  • “Am I solving a real problem?”
  • “Can I get paid to solve it?”
  • “Can I scale the sales process?”

Startups need to identify the biggest risks early and begin testing them. Which risk are biggest? What’s the best order to test them? It is hard to get this type of guidance from a 1-page snapshot1.

Running a startup with just a 1-page business model is like doing finance with just a Balance Sheet and no Income or Cash Flow statements – it provides only 1 dimension.

Why I Don’t Have a Canvas for My Startup, soHelpful.me

Simply put, I’m a single founder trying to create a new market. I’m carefully and selectively working with a few talented people to get insights into their problems and identify ways that I can solve them. Each day I get a little closer, but at this point all of my energies are going into testing problem assumptions and whether I’m creating value.

Referencing Ash’s Lean Cavas, my risks are Problem, Revenue Streams, and Channel.  Testing them is slow, tedious work.

Need Help?

Perhaps you and your team have filled out a canvas and are struggling with the right order to test everything. Feel free to schedule some time with me, I’d be happy to help you out.

  1. To put it differently, I’ve been in meetings with startups where everyone stares at the sheet and wonders, “what are we doing TODAY? What risk is biggest? How are we testing it?”

10 Comments

  1. Cesc April 29, 2013 at 2:35 am #

    I totally agree Kevin.

    I think it was Noah Kagan who summarized the process of creating a company as:

    1. Validating the idea.
    2. Figuring out the marketing.
    3. Scaling.

    Starting a lean canvas before 1 is done seems overkill.

    Still, I still have a tendency to create one canvas just from the start.

    I think that I do this because I want to see the big picture of the business. I need to feel motivated by the business as a whole before starting the validation phase.

    I guess that, since the business will change for sure, it’s not that useful neither.

    • kevindewalt April 29, 2013 at 7:57 am #

      I definitely see the value in them. I’ve used canvases extensively on my previous projects and I totally agree with you on the big picture view.

      Like any tool, I’ve just found places where they work better than others.

    • Kevin H. April 30, 2013 at 1:07 pm #

      A great experience has been working with the Lean Canvas during Lean Startup Machine ( in the course of a weekend) . Kevin I know you are familiar with the process.

      With the canvas and other things it was helpful to have to fill-in and present on different portions of the canvas even when fuzzy on them. So I have no doubts as to how quick of an exercise it can be (and henceforth doesn’t strike me as a waste of time).

      I’d be curious if there are any easier / quicker ways in your guys’ opinion to go about documenting and working over the items covered by the canvas ?

      • kevindewalt April 30, 2013 at 3:58 pm #

        Well, hopefully I didn’t give you the impression that I think using canvases to document business assumptions is a waste of time. I definitely recommend them. I’ve just found situations where they are more useful than others. Given that LSM is an educational event where you’re quickly trying to get many people onboard a canvas is invaluable – I don’t see how you could do it without one.

      • kevindewalt April 30, 2013 at 3:59 pm #

        Sorry, as to your question,

        I’d be curious if there are any easier / quicker ways in your guys’ opinion to go about documenting and working over the items covered by the canvas ?

        Just schedule 30 minutes with me and I’ll be happy to help you, http://sohelpful.me/kevindewalt

  2. Matthieu Garde April 29, 2013 at 7:58 am #

    Thanks for these tips.

    I totally agree with the positive points, especially 2 and 4.

    Allow me to add one :
    I sometimes see entrepreneurs with a big vision, and for this vision half a dozen ideas to work on.
    And for a given idea, the supercharged brain of those entrepreneurs hesitate between several great models, targets and channels.
    In that case, the 1-page-canvas is a great tool to write down, formalize, pitch their ideas, and chose the “better” one to start working.

    90% of the Lean Canvas evolve from V1 to V2 in the first few hours. The V2 is better defined, more specific, and maybe more realistic.

    Anyway, the 1-page-canvas should never be used as a business plan, but as an idea formalization tool to start the real work: validate the assumptions.

  3. David J Bland April 29, 2013 at 2:07 pm #

    Canvas (Lean or BMC) are helpful as you point out, where I see the challenge is the lack of identifying risky assumptions and systematically testing them afterwards.

    You need more than a kanban board & dot voting to do it well 🙂

    • kevindewalt April 29, 2013 at 4:30 pm #

      Definitely true. Where I’m seeing teams struggle is the gap for a new entrepreneur between the simplicity of the canvas and the insight needed to know what to do with it.

  4. Kahlil Corazo (@kcorazo) May 2, 2013 at 8:40 am #

    Another use of Osterwalder’s canvas in Customer Development: use it as a template for interviews. I found this quite helpful in the early stages, when you’re still trying to understand your customer’s business and how you could provide value. Your startup would insert itself in one of the squareish boxes. You could immediately see the relative importance of that box you plan to position yourself in. You could also uncover current solutions and competitors.

    Btw, the idea behind sohelpful.me led me to a way to get interviews of much better quality. Instead of coming in as a salesman-like guy, I let my segment of interest contact me as a solution to a problem. I provided consultation but to do so I they had to let me understand their problems and situation. It’s win-win.

    • kevindewalt May 2, 2013 at 7:28 pm #

      Kahill,

      Definitely agree on all points. I found the same use for the canvas: Allowing me to step back and ask myself, “how does this market work”?

      But…again…a use case I’ve found more helpful when working on an existing market.

      WRT soHelpful.me for Customer Development. DEFINITELY! I’ve had some exchanges with Rob Fitzpatrick about this idea, he used “office hours” to build credibility. There is just something enormously valuable about having a steady influx of people who bring you their problems. Aside from the fact that it is great personal branding (instant credibility because you give others advice), builds new relationships, it also is just valuable seeing a steady stream of problems – patterns emerge.

      Bravo! ???

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