Design Your Business Model

Now it’s time to refine your business idea into a concrete plan for how it will be implemented in practice. This plan is called a business model. Developing a business model doesn’t mean creating a long, complicated document – quite the opposite. Simplicity and clarity are key. A well-crafted business model distills the essence of your idea and helps you focus on what truly matters for your company’s success.

 

The Lean Canvas – Your One-Page Business Model Tool

The Lean Canvas is a simple, visual tool for summarizing your business idea on a single page. Developed by Ash Maurya as a startup-friendly adaptation of the Business Model Canvas, it is designed for situations where the business model is still evolving and needs rapid iteration.

The Lean Canvas consists of nine building blocks that give a complete overview of your business idea:

• Problem
• Customer Segments
• Unique Value Proposition
• Solution
• Channels
• Revenue Streams
• Cost Structure
• Key Metrics
• Unfair Advantage

 

Your Business Model Is Just a Set of Hypotheses

For each of these nine sections, you’ll write down your assumptions about how your business will work – what problem you are solving, who your customer is, what value they will get, and so on. Here’s the hard truth: it’s extremely unlikely your business model will work exactly as you imagine it now. It’s possible your target customers don’t even have the problem you think they have.

In reality, your business model is just a set of beliefs – hypotheses.

A startup’s job is to quickly learn which of these hypotheses are correct and which are not. This guide will walk you through systematically testing each hypothesis to see if it holds true. Only after your hypotheses have been validated should you start scaling your business model.

 

The Two Most Important Hypotheses: Value hypothese & Growth hypothese

Beyond the Lean Canvas, there are two critical hypotheses to test:

• Value Hypothesis – Does your product or service actually create value for customers? Perceived value is the only driver of willingness to pay. If customers don’t feel they’re getting value, they won’t buy. That’s why we’ll test the value hypothesis early, even before building the product, using an MVP (Minimum Viable Product).
• Growth Hypothesis – Can your business model scale effectively and sustainably?

We’ll go deeper into testing these later in the process.

 

Create Your Own Lean Canvas

Your next step is to create your own Lean Canvas. Detailed instructions for filling it out can be found in the book Running Lean. Don’t worry if you can’t complete every section right away – update it as you learn more.