An Innovation Framework for testing business ideas
The NEXT Canvas helps your startups to determine what to validate next
About the NEXT Canvas
In 4 steps to scale
The NEXT Canvas is an innovation framework to track a business idea’s progress from a great idea to a validated business model.
The NEXT Canvas visualizes the four types of proof an idea needs to become a profitable business model: First, the team needs to prove there is an actual problem to solve. With a clear problem in mind, there is proof needed that the team can create a solution to solve that problem. After there is a proven solution, there needs to be proof that customers will pay, and finally, the team needs to prove that the business model can scale.
1. Prove there is a problem
The most important part of any business model is the question of what problem are you solving for which customer? The first stage of the canvas focuses on finding proof there is an actual problem. It helps you define an early customer segment and zoom in on the problem.
2. Prove your solution solves that problem
After you have defined your customer’s problem, it is important to understand why they would hire your solution. What job are they trying to get done? Only if you know that you can start thinking of a solution.
Of course, most corporate startup teams and even startup founders start with a solution in mind. A vision of a brighter future. It is important, however, to start at the beginning and define a clear problem. Otherwise, you won’t be able to create the perfect solution to solve that problem.
While working on your solution, you might notice that you target the wrong customers or haven’t really nailed down the problem. It helps to make an iteration back to the Problem stage to revisit your assumptions and proof to build a product or service your customers want to use.
3. Prove they will pay
After building a solution that your customers want, it is important to prove this by first setting up the right metrics and then by proving your customers are actually willing to pay. There can be no profitable business model without customers taking out their wallets and transferring money to yours.
At this stage, it regularly happens that it turns out the envisioned perfect customer segment is not willing to pay or not pay enough, and you have to make a pivot. Making a pivot means you have to revisit all previous stages. From Problem to Solution and Revenue.
4. Prove you can scale
The hardest stage towards a profitable business model is proving you can scale. You have to be able to grow from an early evangelist customer segment to a much larger and broader segment that can help you scale. This broader customer segment has (slightly) other problems, has another job to be done, might need a different solution, and might not want to pay the same or in the same way as your customer segment. You are now juggling all eight puzzle pieces from the canvas to prove the final stage.
The 8 building blocks of a scalable business model
The top of the NEXT Canvas is dedicated to the Customer. Who is this customer segment, what is their JTBD?
The bottom part of the NEXT Canvas is about your solution. What problem is the solution solving, how are you solving it, how will you make money?
Customer Segment
Who are you solving a problem for? The smaller and more homogeneous the better. You can more easily solve their similar huge problem. In the Scale phase, you will expand the customer segment to adjacent customer segments with similar problems.
Job to be Done
Value Proposition
What value are you bringing to your customer with your solution? Even when you get the solution right, you still need to bring value for the customer to pay for your solution. You want to be Notion and not MS Word.
Channels
How will you reach your customer now you are scaling? Will that be outbound or inbound? Social or paid advertising. This is closely linked to how you will make money.
Problem
What problem is your customer experiencing? Is it a vitamin or a pain killer and is it big enough to build a solution for?
Solution
How are you solving the problem of your customer and how are you fulfilling their job to be done? What type of solution do you want to build, and which features are most important?
Revenue Model
How will you make money? A subscription or one-off payments? Who is your customer and who is only using your solution?
Growth Engine
How will you grow? Will you grow via paid advertising, repeated use or word of mouth?
De-risking a business model is not a linear process
Although the four stages from great idea to scale are directional, using the NEXT Canvas is not linear.
When validating the Problem and Customer segment, you are using two segments of the NEXT Canvas.
When you have gathered enough evidence to validate the Problem and Customer Segments or de-risked it enough to feel confident to take a step forward, you move to the Solution stage.
Validating the JTBD and Solution does not mean that you don’t have to look back at the Problem and Customer Segment. It is not a linear process! You are now trying to solve a puzzle with 4 pieces instead of 2. All pieces need to fit together to be able to scale.
