Lean Canvas vs Business Model Canvas: Learn Key Differences

A canvas in a business context is a visual framework or template used to outline, analyze, and communicate specific aspects of a business, project, idea, or organization. The power of canvases is in breaking down complex and interconnected concepts into building blocks that are easy to understand and discuss. In many cases, the sheer act of filling in the canvas helps by providing clarity or creating the space for brainstorming and collective thinking.

This article will compare two types of canvases - the Lean Canvas and the Business Model Canvas. They are very similar, and our goal is to outline their differences and when to use which.

What is a Business Model Canvas?

The Business Model Canvas aims to provide a complete overview of a company’s most strategic components. The nine components of the canvas can be grouped into three categories:

• Value creation: this is how the company creates value for its customers
• Value delivery: describes how the company delivers this value to the customers
• Value capture: models how the company benefits from delivering value to the customers

Key Elements of Business Model Canvas

• Value Proposition
• Customer Relationships
• Customer Segments
• Channels
• Key partners
• Key activities
• Key resources
• Cost structure
• Revenue streams

For better understanding of how these key elements come together, check out some business model canvas examples from some of the fastest growing companies in 2024.

Pros and Cons of the Business Model Canvas

Advantages of the BMC

Customer Centric
The business model canvas heavily focuses on the customer and generates value for them. It grounds teams and executives to the most important reason for a company to exist—to solve a meaningful problem or need for a customer.

Clarity
Companies are complex organizations, but the business model canvas reduces this complexity by focusing on nine key building blocks. Every person who has seen and worked with a business model canvas once knows what to expect the next time they see a canvas of a different company, which streamlines communication and collaboration.

Simplicity
Working with the BMC doesn’t require extensive training or in-depth research. It’s a great way for teams and executives to align on business issues.

Disadvantages of the BMC

No step-by-step guidance
The business model canvas lays out the key components of the business but doesn’t guide how to define and execute them. People without prior experience could feel intimidated by the blank canvas and not know how to start.

Oversimplification
There is so much that you can fit on one sheet of paper. While the canvas provides a 360-degree business overview, it doesn’t go in-depth in each area. It’s a great addition to your detailed business plan, but it’s not a substitute for it.

Static Snapshot
The business model canvas captures a business's current or ideal state but requires continued effort to keep up to date with ongoing changes. Companies must adapt to evolving market conditions, customer preferences, and industry trends. The business model canvas does its job only if it accurately reflects the state of the business.

The Icanpreneur platform integrated the business canvas into the entrepreneurial journey, reminding founders and product builders to reflect on what they have learned on the canvas. By bringing all information and tooling together in one place, the Icanpreneur platform becomes the true home for everything related to your business, making it easier to keep everything updated.

What is a Lean Canvas?

The Lean Canvas is an adaptation of the Business Model Canvas created by Ash Maurya specifically for startup businesses. Startups in their earlier phases are more dynamic and ambiguous, and Lean Canvas accounts for those circumstances.

Check out more examples of lean canvases of well-known successful companies.

Key Components of the Lean Canvas

• Customer Segment
• Problem
• Unique Value Proposition
• Solution
• Unfair Advantage
• Key Metrics
• Channels
• Revenue Streams
• Cost Structure

Pros and Cons of the Lean Canvas

The Lean Canvas is based on the Business Model Canvas, so all of the pros and cons for BMC also apply to the Lean version. Here are some advantages and disadvantages specific to the Lean Canvas

Advantages of the Lean Canvas

Startup-Focused Design
Startups' goal usually is to create a product from zero to one. The Lean Canvas takes this into account and removes components like partners and activities that might not be relevant for such an early organization. It also adds others like unfair advantages and solutions that help companies penetrate the existing market.

The Icanpreneur platform uses the Lean version of the business model canvas to help entrepreneurs express their business ideas and validate them based on proven methodologies powered by AI technologies.

Focus on Key Metrics
Defining the key metrics for a startup helps entrepreneurs think about how they define their success. This is important as it reminds the team what they should focus on in their day to day activities. For additional information on that topic, check out the blog post for how to define robust key metrics.

Disadvantages of the Lean Canvas

Potential of Misuse
Initial versions of the Lean Canvas contain a lot of assumptions that needs to be methodically validated with potential customers and adapted based on real-world feedback.

Icanpreneur helps mitigate this risk by integrating a world-class process for conducting customer interviews that validate the underlying assumptions from the Lean Canvas with potential customers.

Unfair Advantage Can Be Challenging
The “Unfair Advantage” section can be daunting for early startups that don’t have strong differentiators. However, having strong unfair advantage is crucial for winning existing markets and protecting their leading position from other competitors. The Icanpreneur platform provides guidance and suggestions for how to define your own unfair advantage.

Lean Canvas vs Business Model Canvas: Key Differences

Building Blocks

We have already mentioned that Lean Canvas replaces the specific building blocks of the BMC with others that are more suitable for startup companies. Namely, the components that are removed are:

• Key Partners: early startups often don’t focus on building key partnerships
• Key Activities: This is another redundant component as there are no extensive operations, and the focus is on getting to product-market fit
• Key Resources: these are yet to be acquired and identified in an early company
• Customer Relationships: companies from zero to one have drastically different approach to their customers which are their early adopters.

The components that are added are:

• Customer problem
• Unfair advantage: as already mentioned, a critical component for introducing a new product or service
• Solution: since new businesses quickly iterate between different ways to serve the customer problem, Lean Canvas separates the solution from the unique value proposition. This allows more flexibility in the business plan with quick iterations of different solutions without changing the core value proposition.
• Key metrics: metrics allow founders and product builders to objectify their success criteria and align their team under a common goal.

Note: The Value Proposition in the BMC is changed to Unique Value Proposition to udnerlined the importance of differentiating your product from competitors and create a compelling reason for customers to pick your offering.

Market Approach

The Business Model Canvas is customer-centric and focuses on delivering and capturing value to a well-defined customer segment.

The Lean Canvas on the other hand is more problem-centric, oriented towards identifying a customer pain worth solving before diving into solutionizing.

Target Audience

The Business Model Canvas is great for established businesses or consultants who want to provide an overview of a business model. It works well for companies that have a validated product and are looking to scale and optimize their operations.

As already discussed, the Lean Canvas is suited for startup companies that operate with high degree of uncertainty, with no validated product, and no sustainable business model. Actually, discovering such business model is one of the primary objectives at this stage.

Key Focus

Business Model Canvas: Operational efficiency, Growth and Scale, Strategic Alignment.

Lean Canvas: Hypothesis-Driven Development, Product Validation,

How do you choose business model canvas vs lean canvas and implement it successfully

The right tool for your business is defined by the stage of your product. If you are still pre-PMF, the Lean Canvas will serve you well in getting to a product that solves a meaningful problem for your customers and is positioned and marketed in a way that resonates with the target audience.

If you already passed the points of initial product-market fit, the Business Model Canvas is the tool that will help you scale, maintain, and strengthen your product and market position.

If you are just starting out with your business, Icanpreneur can help you with creating your Lean Canvas, validating it with real customers, and getting your product to the next level.