How do you prioritize and iterate on your service business model assumptions using lean canvas?

1 Identify your riskiest assumptions

Identifying the most critical and uncertain assumptions for your business model is the first step. If proven wrong, these assumptions can invalidate your value proposition or make your business unsustainable. Common riskiest assumptions for service businesses can include whether there is a large enough market for your service, customers are willing to pay, you can deliver the service at a profitable margin, and you can acquire customers through your channels. Utilizing the lean canvas to highlight these riskiest assumptions by color-coding or ranking them by importance and uncertainty can also be helpful.

2 Design experiments to test your assumptions

The next step is to design experiments to test your riskiest assumptions and collect evidence from your customers. Experiments are a great way to validate or invalidate your assumptions using data and feedback from your target market. For instance, you can use landing pages to test customer interest and value proposition, surveys or interviews to test customer problems and needs, pre-sales or minimum viable services to test customer willingness to pay and satisfaction, or ads or referrals to test customer acquisition channels and costs. You can also use the lean canvas to plan your experiments by defining your hypothesis, success criteria, and learning goals for each assumption.

3 Run and measure your experiments

The third step is to run and measure your experiments and analyze the results. This involves executing your experiment plan, collecting data and feedback from your customers, and comparing them with your success criteria and learning goals. For example, some common metrics for service businesses are conversion rates to measure customer interest and value proposition, customer satisfaction scores to measure customer problems and needs, revenue and profit to measure customer willingness to pay and satisfaction, and customer acquisition costs and lifetime value to measure customer acquisition channels and costs. Additionally, you can utilize the lean canvas to document your experiment results and insights by updating your assumptions with evidence and learnings.

4 Pivot or persevere based on your results

The final step is to pivot or persevere based on your experiment results and insights. This means deciding whether to keep, change, or discard your assumptions and hypotheses based on the evidence and feedback from your customers. For example, you could change your target market or customer segment, value proposition or service offering, pricing or revenue model, or distribution or marketing channels. Leveraging the lean canvas can help you communicate your pivot or persevere decision by revising your business model and showing the changes and reasons. This systematic and data-driven approach can be used to validate and improve your value proposition, revenue streams, and cost structure, ultimately achieving product-market fit and growth.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?