The Business Model Canvas and the Lean Startup (short version)

channels

Section of the Canvas that includes ways of attracting customers, communicating with them, and delivering your product/service. Could be stores, websites, sales/customer service people, advertising

customer relationships

Section of the canvas that describes what kind of relationship you have with your customers. Could be personal assistance, automated services, etc.

Lean Startup

approach to entrepreneurship that focuses on rigorous testing of one's assumptions, using MVPs and frequent communication with customers to find an effective business model

niche market

means that a business is focusing in on a particular group of customers - like skiers, or parents, or millionaires, or farmers

mass market

means that a business is not focusing on a particular customer segment but is selling to everyone.

business model canvas

one-page diagram designed by Alexander Osterwalder that allows you to plan out a "rough draft" of a business. You can then use MVPs to test out your theories and make sure they're good before you make the business a reality.

minimum viable product (MVP)

rough or incomplete version of your product that entrepreneurs market in order to test out their ideas in a quick and inexpensive way

customer segments

section of the canvas that defines who you are selling to, including their needs/wants and defining characteristics

value proposition

section of the canvas that encapsulates why a customer would choose you over someone else. It explains what your product does to solve a customer want or need and what makes it stand out - could be convenience, low price, high quality, great design, status symbol, customization, etc.

key activities

section of the canvas that lists the actions a business must regularly take in order to operate. Could include design, delivery, manufacturing, programming, maintaining website, etc.

key resources

section of the canvas that lists the main things you will need to possess in order to make the business work - land, equipment, skilled employees, patents, money, etc.

co-creation

type of customer relationship in which you allow your customers to generate valuable content - examples include people writing helpful reviews on Amazon or YouTubers posting videos

self-service

type of customer relationship in which you have no personal contact with your customer, but have it set up so they can help themselves (like a self checkout or a self-service car wash)

automated services

type of customer relationship in which you have no personal contact with your customer, but use technology to provide personalized service - like Netflix recommendations or online banking

personal assistance

type of customer relationship in which you or an employee are communicating directly with the customer, whether in person or over the phone