An insane amount of people assume that creating a startup is an easy business. There is this strange belief that entrepreneurs have won a lucky golden ticket and magically became rich overnight. Because of that, a lot of young adults assume that entrepreneurship is a path straight to magical candy land.
That is far from being true. To begin with, it is a business. And unless you are running a lemonade stand, it is going to bring you a lot of challenges and make you burn pretty bad. So remember, Startup is a business that requires a lot of hard and strategic work.
And not only that. If you want to run a successful lean startup you have to be able to react quickly, adapt and in order to fulfil the needs of your customer, keep on changing and improving your idea. In other words, you have to run an agile and lean startup.
Startups are not all about coming up with a brilliant idea and becoming an overnight success. That would be quite nice, though.
Less talking and more doing. We are going to tell you one of the main paths of how to assure your startup success.
Let’s dive in.
How to push your startup towards success?
If you want your startup to succeed you have to choose the right path with a lot of trial and error. One of the correct ways is to work with a methodology. that is called the “lean startup”. We bet you have heard this term many many times. A lot of hip people use it as a trendy thing.
But what it is and how to make your startup lean?
If you put it simply, making your startup lean, means that you are going to choose experimentation over elaborate planning, customer feedback over intuition, and iterative design over traditional slick and polished-up design development.
Entrepreneurship is all about testing and learning faster than your competitors.
So you have to test, tweak, test, tweak and test once again.
You can’t really know what your customer wants unless you try it out.
Let’s look at a great real-life example.
When Jorge Heraud and Lee Redden started Blue River Technology, they had a vision of producing robotic lawn mowers for commercial spaces. But after talking to over 100 customers in 10 weeks, they have learned that golf courses, the initial target customers, didn’t need their solution and wasn’t actually their target audience. But they didn’t give up. They began talking to farmers and found out that there is a huge demand for an automated way to kill weeds without chemicals. It became their new product focus, and within 10 weeks Blue River had built and tested a prototype. Nine months later the start up had obtained more than $3 million in venture funding.
Where to begin to become an owner of a lean startup?
First, doesn’t matter what most of the old businesses are saying, do not flood yourself with months of planning and research. As an entrepreneur of a soon-to-be lean startup, you are going to realise that all you have on the day one, is just a series of untested hypotheses—basically, a bunch of good guesses. So instead of writing a complicated and overly detailed business plan, summarise your assumptions in a framework called a business model canvas. Which essentially is a diagram of how a company could bring value to itself and its clients. Remember, the goal of creating a startup business is to create a product that would meet the needs of your perfect customer.
What you will have to do is to think of 2 to 3 key expectations that are going to determine the success of your product. Make it clear and palpable.
Then you have to build a prototype of your product and think of the most efficient way to test it and collect the data for product improvement (about that later).
In order too avoid bias after you collected the data, try to come up with the baseline of metrics upfront.
Let’s say if you are measuring conversions or email sign up, you need to determine how many you need for it to be a success. A clear number that you are aiming for. Because testing something without knowing the outcome you want from it is quite useless. It is the same if you would be trying to pass a math test, you evaluate your knowledge and based on that you determine what grate would be bad or good. Simple.
Just be clear what success and failure of your product could look like. It is going to be harder to distinguish it later.
How to test your product?
The idea of a lean startup is getting your potential product out there, or in other words, you have to use your customer to test your predictions.
You have to build – measure – learn, react and revise it.
Your goal is to build a product (MVP minimum viable product; more about MVP later but first let’s get this out of the way), find an easiest and quickest way to test it, give it to people, observe reactions, improve it and give it back to the customers once again. Use your clients’ input and revise your hypotheses. And start the cycle over again. Rinse and repeat.
It looks something like this:
Zig-zag your way to execution.
Go out and ask potential users, purchasers, and partners for feedback on all elements of the business model, including features, price and distribution channels of the product, as well as easy customer procurement strategies. Concentrate on agility and speed: New ventures rapidly assemble MVP and quickly obtain customer feedback.
Your next logical step is to assess what you have learned. Find out if you should you pivot or persevere.
If your assumptions are confirmed you can continue improving the product. Once it is updated, give it to your potential customers once again and find out if there is more room for improvement, or you can start working on the final piece of product.
Although, if any of the assumptions are wrong, you might have to pivot. In this case, think what why it had failed. Do you have to change your idea completely or maybe focus on the different customer segment (Remember the Blue River example)?
If you have changed the idea or customer segmentation, start the cycle over again.
You will have to experiment way more than you have expected before you will find out what your customers really want.
But this is a great practice and a skill to have for the future endeavours. Once you will learn how to quickly adapt to any situation or alter your product depending on your customer’s needs – you might become invincible.
Let’s look at another awesome example of a company which is a genius of self-tuning:
A Harvard Business Review study of Ali Baba — a tech titan that scaled up from tiny startup — christens the business as “the pioneers of the self-tuning enterprise.” What does it mean? The companies’ overarching business model is focused on constant process iteration.
This meticulous strategy, in which processes are continuously refined through trial and error, is visible all across the organization’s performance management processes. As the study shows, this helps “internal HR systems keep up as operational teams frequently re-align themselves to market needs.” Of course, it is not that easy. If you want to maintain something even slightly bit similar to this approach, a highly sharp and agile team is a necessity.
What is the MVP and why is it important for lean startup?
Lean startups practise something called agile development, which originated in the software industry. Agile development works hand-in-hand with customer development.
As we have said quite a few times before – lean entrepreneurs don’t use typical yearlong product development cycles that assume knowledge of customers’ problems and product needs. They choose agile development that eliminates wasted time and resources by developing the product iteratively and incrementally. It’s the process by which startups create the MVP minimum viable products that they test and improve.
What your MVP should look like?
Don’t be afraid it shouldn’t look or be close to the final product. It is not even going to be a product you will be proud of. Far from it.
Your MVP needs critical features to give meaningful results. So it should be something super basic that could show off the main features. Nothing too fancy. Meaning, do not try to cover up the essence of your product with a cool-looking exterior. That is not the point of MVP.
MVP’s role is to play a role in your testing process. It is going to have a lot of flaws. That’s why you need only a skeleton of your idea. The rigid base that your idea lies on, but something that you wouldn’t attach to. A product that would have a room for unexpected and expected improvement.
So don’t waste your time on trying to make your first MVP’s perfect. You are making your MVP not to prove someone a point that your product is perfect as it is, but to make it a blank canvas for improvement.
How to know if you are there yet?
Let’s say you have done all of that. There are dozens of MVP’s on your work desk, you have tested and improved many times. But how to know if your idea is final?
Test and improve your product until your customer sends you a clear signal that you have successfully developed a product that equips the market need.
If you are feeling quite confident with it, then just give your product a try and put it out there. You can always perfect it more, but as long as if your product has been born through a great deal of trial and error, tweaked multiple times based on your customer needs – you should be good to go.
As we are all aware, entrepreneurs have a tendency to dive in headfirst with the idea that they are passionate about. Maybe it is due to the marketed idea of a startup – a dreamland that is easier and more fun than the traditional 9 to 5. It is more fun if you are built for it, but do not hope for magical and effortless success. There is a way that is tested out, or you might even call it a scientific approach of how to build a startup that works – lean startup.
Having a spine and a process in the chaos and uncertainty which every startup is filled with, can be a lifesaver and help you to avoid the fast-growing list of failed startups.