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How to Ballpark a Multi-sided Business Model

Last time, I showed you how to model a multi-sided business using a Lean Canvas. In this post, I’m going to show you get more specific and ballpark these types of business models to test if its a model worth pursuing.

Multisided Customer Factory

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How to Model a Multi-sided Business

Today I am going to show you how to model a multi-sided business using a Lean Canvas. Products like Facebook, Google, Twitter, and YouTube all fall into this category. Unlike a direct business model where your users become your customers, a multi-sided business model is a multi-actor model where your users and customers are distinct segments.

Facebook model with numbers

The 50% Rule for Traction

If you’re starting a company, chances are you can build a product. Almost every failed startup has a product. What failed startups don’t have are enough customers. Justin Mares, Co-author of Traction shares lessons on when and how to pursue channel building while running lean in this guest post.


How to Test Whether Your Business Model is Worth Pursuing

Last time I emphasized getting specific on your revenue streams – down to the customer segment, pricing model, and customer lifetime assumptions. If you don’t have a “big enough” problem worth solving (that’s not even plausible on paper), then why expend any effort on it. In this post, I’m going to show you how to use these simple inputs to ballpark your business model and test whether it’s worth pursuing.

Inputs for Minimum Success Criteria

There is No Business Model Without Revenue

I created the Lean Canvas back in 2009 as a way to more effectively document my most critical business model assumptions for my products which were predominantly SaaS software products at the time.

Lean Canvas is now taught at over 200 universities (including high schools), close to 100 startup accelerators, and used at hundreds of businesses (including large enterprises). We just crossed the 125K users and 175K canvases mark with our online Lean Canvas tool.

But with expansion comes challenge.

Business Model Story

How to Make Running Lean a Habit

Keeping a locked knee (or a completely straight leg) is key for one-legged balancing yoga poses. A locked knee provides a solid foundation that keeps your foot grounded as you progress through the rest of the pose. I can’t help but draw a parallel to running lean where “locking your knees” corresponds to “tackling what’s riskiest in your business model”.


How to Identify Your Riskiest Business Model Assumptions

While you might be really excited by your idea’s potential, others don’t see what you see. What they see instead is something untested and risky. It logically follows that that you should prioritize tackling what’s riskiest, not what’s easiest, in your business model. But while tackling what’s riskiest is a simple enough concept to grasp, it’s ironically quite hard to put into practice.

3 Meta-principles of Running Lean

The Science of How Customers Buy Anything

A basic tenet of running lean is validating a product or feature ideally without having to building it first
The first battle isn’t fought on the ground but in the mind of the customer. It isn’t fought with your built out solution but instead with an offer.

Physics of Customer Acquisition