In this lesson, you will learn about two key concepts, the business model canvas and the lean method. Mastering the business model canvas will help you analyze and synthesize information about your new venture idea. The lean method will frame how you iteratively design and test hypotheses to validate your evolving business model. >> Before reviewing these concepts, it is important to understand that entrepreneurship is as much about the journey as it is about the destination. Entrepreneurship is not actually about having a eureka moment with a detailed master plan and perfect execution of that plan. >> Entrepreneurship often starts with a vague fuzzy idea of an opportunity, and financing a plan too early may result in a product that nobody wants and a significant amount of wasted time and money. >> Usually entrepreneurs only plan smaller steps towards a fake outcome and review the progress on outcome after each step so they can make changes accordingly. However, a word of caution, being too reactive to feedback may run the risk of drifting away from your initial vision, as well as not building any core capabilities. >> The lean method is a systematic way to iteratively test ideas. It helps you quickly figure out where to focus and what to ignore. It promotes iterating quickly and using low cost tests. This avoids over-investing in a fully functional product and a strategic plan towards a future that probably would not work out exactly as planned anyways. Schematically, the cycle involves building something,measuring how well it works and learning from that observation to improve the next version of that something. For example, the first iteration can start with something as simple as a sketch on a napkin to get feedback from someone else before revising the idea and updating the sketch. Early on, that feedback that you get might be ambiguous. As you evolve your idea, the feedback should become more concrete with each iteration and you should become increasingly specific about the nature of the feedback you are trying to get and learn from. >> The business model canvas helps manage the evolution of your business idea by concisely summarizing your idea as nine separate but interrelated components on a single page. Having everything on one page maintains an overview of all the components. To illustrate how you can use the canvas to summarize the business idea, let's walk you through a hypothetical business idea, household ornaments that can be smashed for stress relief, like stress balls, but more dramatic. The value proposition is stress relief that is safe, affordable and fun. The customer segments might include grad students, young parents, and others who are having a particularly frustrating time who would feel better by smashing something. >> The relationship to the customers would initially happen by our website and social media. The distribution, or the distribution channel, rather, of the smash balls to the customers would be by post or courier straight from the warehouse. >> The three boxes on the top left, key resources, key partners, and key activities, summarize the inputs, their sources, and how they are combined to deliver the proposed value. The bottom two boxes summarize the cost structure and the revenue streams. For this rather silly but plausible idea, we recognize that we are making assumptions about each of the nine components. These assumptions and how they relate to each other need to be tested. Now that we have introduced the lean method and the business model canvas, it's time for you to put them into practice. Your first activity for this module is to fill in your first business model canvas. Then we will guide you as you find a mentor who will give you your first feedback, and hopefully continue mentoring you throughout this course.