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© Sachidananda 1

LEAN CANVAS
12/21/2018 Dalhia Mani
Class admin for Next Session
2

 Lean canvas Submission:


 Prepare a Lean canvas for your group, and submit it using
moodle (Folder - Section E_Lean Canvas Submission).
 Use the following naming convention –
Group1_VROperate.pdf (or word or powerpoint)
 Deadline – Jan 2nd 8.00 a.m.

 Class rep – please test with a dummy file

 For the ASK exercise next week – Sukanya will send you
the triads that you are assigned to. Please note your
group members.
© Sachidananda 3

LEAN METHOD AND LEAN


CANVAS
12/21/2018 Dalhia Mani
Failure rate of new ventures

• Approximately 75% of venture-backed firms do not


return investors’ capital (Ghosh 2015).
• More than 90% of firms fail to meet their projected
return on investment (Ghosh 2015).

• Examples from our backyard of startups who died of


indigestion rather than starvation (Eg. Ziva with local
search) – issue: product-focus (usually more
controllable) and not market-focus (requires discovery)
“Entrepreneurs have been trying to fit the square peg
of their unique problems in the round hole of general
management for decades. As a result, many
entrepreneurs take a “just do it” attitude, avoiding all
forms of management, process and discipline.
Unfortunately, this approach leads to chaos more
often than it does to success.”
- Eric Ries (2015)
The analytical approach

• Evaluate the competitive landscape


• Analyze data about the market and the customer
• Make predictions about market potential, expected
growth rate, etc.
• Establish a strategic plan
• Set specific milestones, goals, and objectives
• Devise a detailed implementation plan
The analytical approach

Analyze Decide Act

The analytical approach works well in stable, predictable


environments, in which one can identify trends that are likely
to continue moving forward.
The planning fallacy

Business plans rarely survive first


contact with customers. As the boxer
Mike Tyson once said about his
opponents’ prefight strategies:
“Everybody has a plan until they get
punched in the mouth.”

 - Steve Blank, Serial Entrepreneur


An uncertain world

“No one besides venture capitalists and the late Soviet Union
requires five-year plans to forecast complete unknowns. These
plans are generally fiction, and dreaming them up is almost
always a waste of time.”
- Steve Blank, Serial Entrepreneur
The test and learn approach

Build

Adapt Launch

Evaluate
It’s all about fit!

Analyze
Stable Environment and Decide

Unpredictable
Learn by Doing
World
Let’s look at some data

 What percentage of Inc 500 founders wrote formal


business plans before they launched their companies?
 Approximately 40% (Source Inc Survey 2008)
 Approximately 28% (Bhide, A. 2000. The origin and evolution of new businesses.
NewYork: Oxford University Press).

 How many of those strayed from their original


conceptions?
 Approximately 65% (Source Inc Survey 2008)

 How many of those took more than a few months to


plan?
 Approximately 32% (Source Bhide, 2000; Honig, 2004)
Business Plans
 So why do we need to write a business plan?
 For a VC: To get finance
 But VCs don’t believe these plans either
 Used as a way to check that the founders have an understanding of business
 Also, VCs best come in when you have gone from zero and are pretty close to
One (i.e. you have a working business plan)
 Also, only 0.2% of new startups were VC funded (Source Venture Economics
2006)

 For an entrepreneur who is between zero to one?


 Future is very difficult to predict
 Bplan is too static
 Bplan takes too long
 Focuses attention on the micro details when the big questions are still unanswered
Why do we still see business plans?

“Most corporate planning is like a ritual rain dance: It has no


effect on the weather that follows, but it makes those who
engage in it feel they are in control.”
- Russell Ackoff, Org Theorist,
Professor, Wharton
Development of alternatives
 Something short

 Something broad

 Something that can be changed

 Getting to Plan B (Randy Komisar and John Mullins)


 Start changing your plan based on data from the enterprise

 Business Model Canvas (Alex Ostwalder)


 One page canvas to depict the business model

 Lean Canvas (a modification of business model to fit the lean method – better suited
to zero to one stage)
Document your plan: Lean Canvas

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1 2
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7 6
Key Metrics

A hypothesis about the value that you bring, and to


whom
 A hypothesis about how you will scale
Document your plan: Lean Canvas

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1 2
3
8 5

7 6
Intro our Guests and Lean Canvas
19
Exercise
 Introduction
 Split the class into 4 groups
 Each guests works with one of the four groups
 Exercise Part I: Develop Lean Canvas (15 mins)
 Work with the guest to develop the lean canvas for the guest’s startup
 Note changes over time
 What did you learn?
 Instances of change over time?
 Exercise Part II: Experimentation (15 mins)
 Work with the guest to identify questions that are still open
 Group discusses and comes up with ideas on how to test and measure
 One person in each group presents lean canvas and experiments to
the class
To do for Next Session
20

 Lean canvas Submission:


 Prepare a Lean canvas for your group, and submit it using
moodle (Folder - Section E_Lean Canvas Submission).
 Use the following naming convention –
Group1_VROperate.pdf (or word or powerpoint)
 Deadline – Jan 2nd 8.00 a.m.

 Class rep – please test with a dummy file

 For the ASK exercise next week – Sukanya will send you
the triads that you are assigned to. Please note your
group members.