The Lean Canvas Diagnostic: Part 2 of 7 - Structure

The 1-Page Test

This is part 2 in the 7-part series on the Lean Canvas Diagnostic. You can find part 1 here.

2. Structure

With the backstory of the idea out of the way, I then focus my attention on the overall business model structure. The goal is to strive for simplicity by constraining the Lean Canvas to a single page.

“Simplicity is the ultimate sophistication.”
– Leonardo da Vinci.

If the Lean Canvas doesn’t fit on a single page (or slide), chances are high that the idea is still too complex in the entrepreneur's mind.

Encourage brevity

If the entrepreneur is overly verbose in their descriptions, using smaller fonts isn’t the answer, but fewer words.

Clarity comes from being concise.

Encourage the entrepreneur to use shorter sentences and pick their words carefully. The Lean Canvas isn’t intended to be a standalone document but a visual communication tool best complemented by a business model story narrative delivered by the entrepreneur.

The 1 Business Model per Canvas Rule

Brevity only gets you so far. The most common reason a canvas goes past a page is fitting too many business models into a single canvas.

In other words, they create an overly broad canvas.

Entrepreneurs often think that adding more ways to make money helps them grow their company faster. But the opposite is often true.

Making money one way is hard enough.

That said, being razor focused on one wrong way to make money is no better.

This is a classic Goldilocks problem.

We need a strategy that allows us to go broad and narrow at the same time simultaneously. We do this by splitting a “big idea canvas” into additional canvases.

Each canvas describes a single business model.

A business model describes how a company creates, delivers, and captures value from its users and customers.

It helps to think in terms of business model archetypes.

Mental Model #2: Business Model Archetypes

While we use many labels like B2B, B2C, and B2B2C to describe business models, when we group them by actors, there are only three basic business model archetypes:

A direct business model is a one-actor model where the user = customer. Example: A coffee shop
A multi-sided model is a multi-actor model with users and customers. Example: Facebook
A marketplace model is a variant of the multi-sided model with buyers and sellers. Example: Airbnb.

All models (complex B2B products, non-profits, healthcare, etc.) can be simplified to fit into one of these three archetypes.

Thinking in archetypes opens the door to applying well-known validation and go-to-market patterns and recipes to a new idea.

When I encounter an overly broad or a single narrow canvas, I advise the founder to create 1-2 additional business model variants using the arguments above.

To maintain momentum, I assign other variant exploration as homework, and we turn our attention to a single variant (often their strongest one) for the rest of the diagnostic session.

The next step is identifying what’s riskiest in their business model.

This is probably the most critical step and where most founders and advisers go astray.

Incorrect prioritization of risk is one of the top contributors to wasting needless time, money, and effort on sub-optimal experiments.

You can’t simply guess your way here but must employ a systematic approach — a topic for next time.

The Lean Canvas Diagnostic 7-Part Series TOC

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