In my last post, I outlined how to make progress by leveraging the diversity of ideas from your internal teams using time-boxed LEAN Sprints. In this post, I will focus on communicating this progress with your internal and external stakeholders using a business model progress timeline.
Let’s first paint the picture of how we currently demonstrate progress to our stakeholders.
Business Plans and Quarterly Board Meetings
The need to demonstrate at least the “potential for progress” often starts right at the business planning phase. We have to justify our new venture to a VC, CFO, spouse, or even ourselves as a prerequisite to securing runway.
If you don’t already have demonstrable traction, the traditional approach is to slog through a 60-page business plan. While this exercise doesn’t demonstrate “progress”, it forces the entrepreneur to think more critically about their business model story — which is still moving the idea forward.
The problem, of course, is that business plans take too long to write. More importantly, the people who make you write them don’t take the requisite time to read them. So all your pretty fonts, charts, and excel wizardry go to waste.
The other problem is that the business plan is meant to be the master plan for your business. But because we don’t know what we don’t know at the earliest stages of an idea, the plan immediately starts on the wrong foot. Nonetheless, if you still manage to tell a believable story and secure enough resources to move forward, you should keep this plan updated. But we don’t.
In subsequent interactions with stakeholders, like quarterly board meetings, we employ a different set of heavy-weight artifacts designed to show a compelling progress story. Like the business plan, these consume lots of resources with questionable value.
Your stakeholder interactions are meant to hold your innovation (not you) accountable AND serve as a source for new idea generation. But these interactions are often poorly utilized because we don’t share the full progress story. We tend only to share good news and hide the bad news (for as long as we can). In the Lean Startup world, we call this “playing success theater.”
As a result, we end up with two stories — the story we tell our stakeholders and the story we tell ourselves.
It is more important to build the right business model, than give the appearance of always being right.
There is a better way out of this dichotomy of two progress stories.
The 1-page Business Model: Lean Canvas
In my polls across thousands of entrepreneurs, I found that 2 out of every 100 entrepreneurs write business plans AND enjoy the process. Unless the others are forced into writing one, many opt for the no-plan (or just-do-it) alternative, which isn’t any better.
While a just-do-it attitude is a fast way to get started, it falls prey to post-rationalization.
Reasonably smart people can rationalize anything, but entrepreneurs are especially gifted at this.
This is where I distinguish business plans and business planning. Business plans, while well-intended, fall short of realizing their true value for the reasons I outlined above. On the other hand, business planning is critical for fighting the Innovator Bias for the solution.
Like everything, planning needs to be time-boxed to avoid analysis paralysis. But the right kind of planning is time well spent. The 1-page business model has stepped up to fill the bill in recent years. By embracing space and time constraints, the Lean Canvas fights analysis paralysis and forces action.
1. It is easier to communicate
Because the canvas must fit on a single page, you must cut through needless fluff to communicate your business idea concisely. You put a 1-page Lean Canvas in front of anyone, and they can’t help but read it and have an opinion. It is at the intersection of these conversations where real success lives.
2. It is quicker to create
Because creating one of these canvases takes ~20 minutes versus two months, it gets you outside the building faster. So you spend more time building versus planning to build your business.
3. It is possible to keep it up-to-date
The portability of the canvas makes it possible to treat it like a tactical plan — one that you update a lot more frequently. So you can tell the story of the evolution of your business from idea to scale using the same lightweight document.
The shaded areas mark the parts of the business model that have changed. This allows you to visualize and deliver more effective progress updates by focusing on the deltas from one snapshot to the other.
The problem is that while the Lean Canvas helps you capture an idea on a single page, during the honeymoon period of a new business idea, everything seems possible. A single big idea can easily fork into multiple variants targeted at different customer segments and problems. I’ve seen entrepreneurs wrestle with squeezing these variations into a single canvas. The result is a 4-page-long Lean Canvas which defeats the purpose.
The answer is creating multiple canvases per business model variant.
Lean Canvas as Swimlanes
Instead of cramming all your variants into a single canvas, embrace the 1-page limit and split your variations into multiple canvases. In my book, Running Lean, I describe the journey from an idea to a plan that works as a search versus execution problem — one designed to avoid the local maxima trap. We fall into this trap when we go to the other extreme and too narrowly focus on a single implementation of a business idea.
Creating a single broad or a single narrow Lean Canvas are equally bad.
The right approach is starting with a broad canvas (your best guess) but then splitting it into many narrow canvases that you pit against each other in your search for a business model that works.
I can tell you my business model “search” story with this view. I started with a big idea, considered different variants, and narrowed it down further.
But we can go even a step further.
The Business Model Progress Timeline
While the business model timeline view above allows you to share the evolution of your business model story, it doesn’t attribute any causality to the changes. Did you prematurely give up on one business model because you didn’t know how to test it, or was it because you invalidated it?
To answer these questions, we need to dive one layer deeper into the significant strategies and experiments we ran to test our business models.
Much as history is told as a string of “seemingly” causal events, we must attempt to justify our business model evolution story as a string of seemingly causal validated learning events. By tying the business model changes to experiments we ran, we hold our decisions accountable to ourselves, our team, and our stakeholders. This is key for a breakthrough.
“A business should be run like an aquarium, where everybody can see what’s going on.”
- Jack Stack: The Great Game of Business
Take the Progress Timeline for a Spin
We have been busy the last few months turning this progress timeline view into reality as a feature in the online LeanStack tool. The progress timeline view automatically builds itself as a by-product of using the tool. No manual timeline grooming is required.
An event artifact is recorded on the timeline whenever you create or update your Lean Canvases, Validation Plans, and Experiment Reports. Clicking into any event artifacts brings up a more detailed view, so you aren’t caught off guard in your next board meeting or advisor update.
Signup for a new Lean Stack account to test-drive the progress timeline.
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P.S. We want your feedback on whether you find this feature useful and how we improve from here. Leave a comment below.
P.P.S. We are looking to hire a UX developer to help push the limits even further on the timeline visualization. If you are up for the challenge, drop me note.