Every business starts with an idea. An idea will typically come from your own personal experience. You may notice that a tool or service is missing which could make your life easier. Or, you may see an opportunity to commercialize an existing process which can be streamlined. You could even just find a product or service that you like and think that you can make it better. Regardless, idea’s come cheaply – it’s the definition, planning and implementation of a profitable business model around that idea that sets you apart from the rest.
We first need to take our idea and define it in an appropriately thorough manner. There are many ways to define an idea; simply writing it down in a single paragraph, creating a PowerPoint slide deck, or creating a fully fledge business plan are among a few. And all of these are useful in their own way, but in the online technology space there is a better option. This option is more likely to save you valuable time and resources, particularly when factoring in how quickly businesses must morph and adapt in today’s ever-turbulent tech landscape.
Forget the Business Plan
What’s wrong with a business plan? Well, there is definitely a lot to be gained from documenting your idea in depth, and performing the associated feasibility and competition tests associated with the plan. However, in the constantly evolving online world, business plans quickly become out of date. Business plans take time to create, and often by the time you get around to launching your business, it’s likely that your expected target customers have changed three times over. And with that, comes a change in competitors, markets and advertising strategy. Yes, I’ve spent many hours writing business plans, and I did learn a lot about the validity of my ideas while writing them, but there’s a far more “light-weight” method which can reduce the time it takes to define, refine and update your idea massively. You will still get the idea clearly defined on paper, but it’ll be far easier to keep it up to date as your idea evolves.
The Lean Canvas
The approach I choose to take when defining the idea behind my projects is the Lean Canvas. This concept was created by Ash Maurya and is an adaptation of the Business Model Canvas, developed by Alexander Osterwalder. The Lean Canvas model can be broken down into two spheres. The first is focused on product specific elements, such as what the solution is, it’s cost structure and any unfair advantage (competitive advantage). The second is market focused, targeting topics such as the customer segments, the real problems it tackles and revenue streams. As stated by Ash, the main objective is to make this plan “as actionable as possible while staying entrepreneur-focused”. This plan is intended to guide you and your idea to ultimate success, and focuses on a target-specific approach to the execution of your idea.
As seen in the example canvas, each subject is clearly defined. Spend time researching and analysing each extensively. This will help you gain a greater understanding of what you’re going to accomplish with your product, much like a business plan would, but in a more time efficient manner. You may ultimately do just as much research and analysis as you would have using the traditional business plan approach – this is a good! However, you will end up with a more brief and concise summary using the Lean Canvas approach, a definition that can be revised and revisited much more fluidly as your project progresses.
Following on from the initial defining of your idea is the idea validation process, this is where the statements and assumptions contained on your Lean Canvas will be put to the test, and we will find out what’s right and what’s wrong through tests, data collection and analysis – all from the real world.
Read the next article in this series: Validating The Market & Product