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When it comes to new business development, both in new ventures and established firms the lean start-up methodology has been hailed as a best practice approach due the benefits it offers in terms of rigour, flexibility and cost effectiveness[i]. While initially developed with the start-up context in mind, it has since additionally been adopted by established companies as a means to  research strategic renewal opportunities, e.g. in terms of their product portfolio[ii].

 

The lean start-up methodology centres around the flexible business model canvas which, when applied properly allows to test the different building blocks of new business opportunities. Through a scientific process of formulating, testing and validating assumptions founders and innovation champions are able to test ideas before they pursue them in full[iii]. The flexible business model canvas allows to test ideas with low initial commitment and in an iterative manner, where building blocks continuously co-inform each other as ideas pivot from one form into another.

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The flexible business model canvas offers opportunities to chart attractiveness of future business opportunities through a stepwise approach[iv]. First attention is drawn to the unique value proposition of potential business solutions and this is subsequently tailored to specific customer segment to achieve focus and product/market fit for newly introduced products and services. Finally more detailed aspects are strategically designed to augment the business model through attention for monetization and traction.

 

Importantly the canvas also offers insights for building minimum viable products (MVPs) through the increased understanding on which product and service features matter most and building incomplete prototypes that prioritize these aspects. Once these MVPs are tested in the marketplace they offer additional direction to the innovation journey going forward.

 

The lean start-up methodology can be used to build a new business from the ground up or to investigate new product avenues within an existing business. Both pathways require unique foci in applying the flexible business model canvas which are interesting to explore in an applied manner.

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REFERENCES

 

[i] Bocken, N., & Snihur, Y. (2020). Lean Startup and the business model: Experimenting for novelty and impact. Long Range Planning, 53(4), 101953.

 

[ii] Sund, K. J., Bogers, M. L., & Sahramaa, M. (2021). Managing business model exploration in incumbent firms: A case study of innovation labs in European banks. Journal of Business Research, 128, 11-19.

 

[iii] Keane, S. F., Cormican, K. T., & Sheahan, J. N. (2018). Comparing how entrepreneurs and managers represent the elements of the business model canvas. Journal of Business Venturing Insights, 9, 65-74.

 

[iv] Chengbin, W., Hongbin, W., Min, D., & Yongyan, F. (2022). Lean Startup Approaches (LSAs): Convergence, Integration and Improvement. Technological Forecasting and Social Change, 179, 121640.