While established companies have familiarity and brand as a currency of trust among customers, a startup has to rely heavily on building trust through a strong value proposition that leaves the customer feeling understood and motivated to act. Therefore, value propositions are important for startups to win early sales. Developing a strong value proposition can be challenging. It requires a deep understanding of what a customer wants to accomplish and why it is important. In the beginning, a startup assumes answers to these questions of what and why but they usually need to be tested and refined to find a scalable business model. This post will cover how to develop and test value propositions that win early sales.
The lean canvas enables rapid testing of business model assumptions to find problems worth solving and a repeatable business model or, at worst, to quickly determine if pursuing an idea is a waste of time and money. For this, assumptions on the canvas need to be in a testable format so that they can be validated or invalidated.
George E.P Box
A social entrepreneur should be actively building and testing the assumptions in the business model from day one. Using a canvas to model the business makes the process easier and faster.
This post is the second in a series on business modelling. My previous post on how to model a non-profit on the lean canvas is recommended for changemakers in non-profits or government.
In this post I will cover how to use the lean canvas to model your social business in a way that also highlights its purpose/impact. This post applies to all types of social businesses, including for-profit social ventures and social enterprises housed within non-profits. The lean canvas can also be used whether the business seeks to create its impact with a stakeholder group (e.g. customers, employees) or is looking to donate all its profits to a non-profit.
We as changemakers tend to focus on the social or environmental problem that we seek to address and not fully consider who is our donor, what problems are we are solving for them, and why will they donate money to our organizations. The lean canvas makes defining the how we create value for the donor explicit.
There are several iterations of the lean and business model canvases now floating around for non-profits and social ventures. However, I think that the lean canvas is still the best way for a non-profit to understand and communicate its model.