How to Make Your Startup Idea Understandable to Investors and Yourself: Lean Canvas

These days, it seems like everyone wants to start their own startup, raise a billion in venture capital, buy a Cybertrack with it, and ride off into the blue (not to mention, this is not a proposition for non-traditional relationships). That's all well and good. But many people have trouble articulating their idea into something tangible, something real, or at least real enough that you can explain it to others without them thinking you're crazy.

Luckily, there is a framework that helps you do this. It was invented in ancient Greece by Plato and his followers and then applied to the startup industry. Or maybe not, I don't know, but it doesn't matter. What matters is that it is an effective and frequently used technique.

Here is the general structure:

Let's see how this works and why.

There was a problem in the beginning.

Obviously, you need a problem to solve first. Many people immediately start thinking about the solution, but that's a mistake. First, you need to define the problem. It's best if it's real, but at this point it's hard to tell if it is real, so let's go with something that seems reasonable. For example:

Great, we have a startup idea! Now let's break it down:

1. Problem:

• People often lose socks, ending up with mismatched pairs.

• Finding the right socks takes a lot of time and is frustrating.

• Buying new pairs to replace lost ones increases costs and waste.

Now we need to understand who our customer is! Remember, problems don’t exist in a vacuum, someone has to deal with the problem. This could be people or businesses (although ultimately it’s always people). Let’s define who they are:

2. Customer Segments:

• Busy professionals who value convenience.

• Families with children who constantly lose their socks.

• College students and young adults living on their own for the first time.

• Eco-conscious consumers looking to reduce waste.

Now we have people who are facing a problem, now we need to figure out how our product creates value for them in a unique way, i.e. in a way that doesn't already exist (otherwise why are you working on it?):

3. Unique value proposition:

• “Never lose a sock again! Our service guarantees a selection of socks delivered right to your door.”

• An eco-friendly approach that reduces waste and promotes a green approach.

• A solution that saves time and takes the hassle out of managing socks.

And finally, we come to the solution. How exactly are you going to solve the problem:

4. Solution:

• A subscription service that delivers hand-picked socks on a regular basis.

• Personalized sock matching kits with unique codes for easy re-ordering of specific pairs.

• Optional eco-friendly laundry bags to help keep socks together during washing.

Great, we're halfway there. Once you've determined how you're going to solve the problem, you need to think about how you're going to distribute the product, which means what channels you're going to use.

5. Channels:

• Online platform (website and mobile application).

• Social Media Marketing.

• Partnerships with laundries and eco-product stores.

• Influencer support and recommendations.

And how are you going to make money from this? I know a couple of years ago it was not customary to think about this, only growth was important, but times have changed and now it is better to make money. So, what is your business model?

6. Sources of income:

• Monthly or annual subscriptions.

• One-off purchases of personalised kits and eco-friendly laundry bags.

• Premium options for higher quality socks or themed socks.

Making money is great, but only if you spend less money than you make. It used to be popular to sell a dollar for 90 cents to speed up growth. It still happens now, but it's not cool anymore. So you need to think about your expenses:

7. Cost structure:

• Production and delivery of socks.

• Development and maintenance of website and application.

• Marketing and customer acquisition costs.

• Partnerships and cooperation.

• A Cybertruck for Each Founder

Ultimately, you can't define your success by money alone. It's okay to define it clearly. Now is the time to do it:

8. Key metrics:

• Customer acquisition costs (CAC).

• Monthly Recurring Revenue (MRR).

• Customer retention rate.

• Number of socks delivered/replaced. Customer satisfaction and feedback.

9. Unfair advantage:

This is one of the most important steps, and every investor will ask you about this. What is your competitive advantage? What makes you special, why can't anyone else solve this problem the same way you can? What do you have that will give you a competitive advantage over other companies?

This could be your knowledge of specific industries and verticals, R&D and/or patents, innovative technologies that others don’t have, established partnerships with existing players in the industry, and so on.

In our case:

• Proprietary sock matching technology for easy re-ordering.

• A strong brand focused on sustainability and convenience.

• Established partnerships with eco-friendly brands and laundries.

As you can see, this is not a difficult process, but it is very important. In the end, you will have a much clearer understanding of your idea and how to make it a reality. This will make it easy to create a presentation for investors and future employees.

I am a co-founder of AI integrator Raft.

Sharing my experience in TG-channel.

Good luck and positive mood to everyone!