How to validate your business idea

Lean Canvas can be a great helper when you start a new company.

Lean Canvas

Lean Canvas is a simple table that doesn’t take too much time to fill in, yet it gives the full overview of your future business. It helps to quickly validate the idea and the strategy.

Let’s take a closer look.

Problem

The first column is connected to your understanding of the problem you will try to solve with your services. Think about the needs of your potential customers. Why do you start the ride-hailing business? The answer “I just want to make money” is not the right one. You can see a problem with public transportation in your region or lack of taxis for a business segment.

Solution

Here, you need to explain the solution that you offer in 1-2 sentences. The solution should solve the problem that you have mentioned in your first column. 

Key metrics

This part is created to let you understand what are the key goals for your business. For ride-hailing, think about a number of rides, an average cost per a ride, a number of riders and revenue.

Value proposition

While filling this section, think about features that make your services attractive to customers. Why will they use your ride-hailing services? Write down the answer to this question in the Value Proposition part.

Unfair Advantage

Think about one feature of your services that will make all the customers turn to you. Something very unique that nobody has. Something that can’t be easily copied by your competitors. In some cases this part could be left empty but it’s better to fill it in.

Customer Segments

That’s an easy one. Just mention all the segments of your targeted audience: for example, women 20-40, college students, office workers, etc. Make sure you segmented your audience. It’s better to target a specific segment as it will allow you to understand better customers’ real problems and what they’re looking for from your services. 

Cost Structure

Now it’s all about money. Mention here what you should pay for: salaries, rent, taxes, advertising, etc. That will allow you to understand better on what you should spend money and how to create a pricing strategy.

Revenue streams

The last but not least section of your Lean Canvas will help you to understand how exactly you will get money. In your case the main source will be non-recurring revenue from B2C customers.

That’s it! 15 minutes and you have a kind of a plan.