Designing a lean business model for your mobile startup

Most entrepreneurs get really excited when an awesome idea pops into their minds. Even if it is completely new in the marketplace or already familiar to some, its execution continues to be an important criterion for a successful startup. As Ash Maurya highlighted, “The problem is that startups fall in love with the solution too early”.

By choosing to take your idea to market without insight from your potential customers, you will face the huge risk of losing focus on two main elements. These elements are essential for discovering if people want your mobile product: the vision and the strategy.

Help your startup do it right the first time

As a startup founder, you should always be open to change in order to make improvements. Since the costs of any change in the beginning are lower now than in the later phases we always advise our clients to share their mobile product ideas with potential investors as early as possible. This way you collect feedback, talk to future users and hear their opinions. Without getting an external perspective, you won’t be able to build a product people will want to pay for.

Extracting from Seth Godin's theory, a strong business model has to answer these 4 important questions every entrepreneur (including yourself) should have in mind when getting a startup off the ground:

  1. Why would people pay for your product?
  2. How would you acquire what you are selling for less than it costs to sell it?
  3. What structural insulation do you have from a price war?
  4. How will people find out about your business and decide to become customers?

Use all the answers to the questions above to create a strategy. Calculate your investment in your business and see if it's worth it. Do not forget that startups live only if the cost of acquiring a customer is smaller than the lifetime value of a customer. Evaluate your activity after a determined period and see what worked, what didn't and what improvements can be made.

Attributes your lean business model must have

People often start businesses that lose money. Studies show that 90% of startups fail, 10% of which during the very 1st year and 70% during years 2 to 5. A complex and well thought through business model leads to a good strategy.

What is a lean business model?

A lean business model is a business strategy that revolves around the concept of continuous improvement. It aims to eliminate waste and bring efficiency into all aspects of a business while meeting customers’ needs. It involves identifying improvement areas, pinpointing what does not bring business growth, stripping away any unnecessary elements and implementing suitable processes. 

Let’s zoom in on your startup business model and have a look at the 4 attributes that are mandatory for a successful lean business model:


Take time to see if your lean business model can make profit to survive. A lot of startups get carried away by ideals and reach bankruptcy. You might have some other objectives that are not money-related, but you must remember that profit has to be on your priority list.

For example, Small Giants, a community focused on the promotion, implementation and advancement of successful value-driven businesses, revised the values that they consider mandatory for a Small Giant Company, and included that, in order to be part of the community, you have to have a financially sound business model. In their opinion, even businesses that do not consider profit a key component of their strategy should find a way to look after it, as it guarantees their sustainability.


Here you have to find out how safe your market is and how easily can competition enter and kick you out.


Analyze your audience through your product. Is your mobile app easy to use? The mobile market presents serious competition. Figure out what their wishes and their needs are to come up with a suitable product.


Constantly get feedback from your users and fix the errors as soon as possible. Make sure your idea is not a rigid one. The thing with startups is that sometimes you have to change everything if it's needed.

Lean Canvas and Business Model Generation Canvas

A very good place to start structuring your ideas is any of the following “canvases”: the Business Model Generation Canvas or the Lean Canvas. Any of them will do the job for you in the mobile startups industry. These tools can help entrepreneurs build a lean business model that covers the following key elements:

1. The problem. Think of it and note down 3 top problems your product solves.

2. The ones who need you are the customers. Make sure you have a detailed segmentation in order to know exactly who they are and if they are not part of the same category, create a separate canvas for each segment, because the results will not be the same.

For example, when clients come to us, they want to know what kind of app they should develop first. This depends on the audience they build the product for.

3. What is your Unique Value Proposition? What makes you different from the competition and, more importantly, why are customers going to pick you and pay for your offer?

4. The solution. Have you got an MVP (Minimum Viable Product) that sustains the Unique Value Proposition? Customers need evidence to trust you.

business model

5. What is your key activity? In other words, what action do customers take in order to bring you revenue/retention? In other words, what actions do customers take to bring you revenue? If you are an e-learning platform, a key activity your users should perform is to consume content in the platform (watch a video, go through a course, take a quiz etc).

6. Having settled all this, the next step would be to list all free and paid channels you are going to use to reach your customer.

7. How much money do you need? This question needs to get a detailed answer regarding all your fixed and variable costs (Cost Structure).

8. Revenue Streams: You need to identify your revenue model, note what your streams of income are: subscriptions, ads, freemiums, etc. and outline your back-of-the-envelope assumptions for lifetime value, gross margin, break-even point, etc.

9. The Unfair Advantage is the most delicate part of the whole process because it is harder to find. A concise definition of unfair advantage would be something that cannot easily be copied or bought.

People often make no difference between the unfair advantage and the unique selling proposition. USP is the element that makes you different, but it's not the skills or assets that help you get there. Take a look at some great examples of unfair advantages.

One company, many business models

None of us are big fans of change. On top of our preserving-the-status-quo preference came a pandemic that, for numerous companies meant deciding to shift fast toward a digital operation model. 

So it's clear that you must be ready to adapt your idea, reinvent your business, your sales strategy, and sometimes your whole career. Customers want different things today than they did in the past, and will go for different ones in the future. Being aware of their needs and expectations is critical for any type of business, especially for a startup.

By changing your business model you create opportunities. If you want to see a few examples of big companies’ business models, give the following links a try: Apple, LinkedIn and Skype. By seeing older versions of them, you will be able to compare those strategies to their present tactics, products and services.

Always begin with the business model

You can run a startup with an idea and a well-planned business model. Fortunately, you don't have to write a 100-page business plan for your startup anymore (unless, of course, you are applying for a bank loan). To conclude, the business model helps you:

  • know your market better
  • see if your solution fits the customers' needs
  • find out what are the activities that bring revenue and increase user retention
  • make fundamental business changes in the beginning; it is cheaper than at later stages of the startup
  • build your MVP, launch it on the market as earliest as possible, collect feedback, gather opinions, make changes
  • avoid building a product nobody wants
  • identify hypotheses, assumptions and risks
  • plan validation testing
  • find ways to add value or reduce costs.

What do you think? Let us know.

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