How to start a business: The lean-mean-cost-reducing-startup-machine
Have you ever written a business plan? If you haven’t, good for you, no need to start now. This is what members of the Lean Startup movement teach. The goal of the Lean Start-up Movement is to help startups save some money and achieve success. In order to do this, they offer many events and meet-ups in cities worldwide.
Skip the business plan
Business plans take too much time and don’t leave any room for trial and error. Business plans may be a smart thing for established companies, who already know their market and competition, but for startups they’re not ideal. Startups that dive head-first into a business plan tend to “scale up too early”, which is apparently the number one reason of small companies failing these days. What you should do instead: form a vision, but don’t fall in love with your product too early, because it might end up breaking your heart.
Find thy customer
Before you make a product that you love, make sure that you’re not the only one that does. There is no point putting blood, sweat and tears (and loads of money) into a product that won’t sell. Of course it’s hard to know whether something is going to be successful beforehand, and that is why Lean Startup is here to help. Gregor and Christoph of Lean Startup emphasized the importance of trial and error. They encourage startups to make assumptions about their potential customers and then to go out and ask them.
Don’t ask mom
When you decide start conducting interviews with your future customers, try to really venture out and find people in your network that would actually buy your product in the end. Don’t ask your mom, because she loves you and would buy anything from you. Find your peers, plan potential interviews and don’t try to sell them anything yet, there’s plenty of time for that later on. Even if the results are not satisfying, don’t be desperate. The Lean Startup process, build-measure-learn, is not linear, but rather cyclical.
Proud to fail early
Everybody knows the phrase “failure is not an option”, but the truth is: failure is good for you. At least you learn how not to do it. The key is to fail early and without spending too much money. If your build-measure-learn cycles go fast you will have several attempts of pivoting your vision to make sure it fits to the customer’s needs before you run out of money.
What’s your problem?
One of the most important parts of the lean startup process is talking to people, and learning how to connect with the right people in the right way. Your personal network (mom not included) is a good starting point. You should try and find the “early adopters”. When talking to these people focus on the problem that you are trying to solve and not on your assumed solution. Find out if the problem you have is really worth solving, and then see if it is also important to your customer. The three points to follow in potential interviews should be:
- Setting the direction and tone of the conversation and nailing the problem down
- Have an anchor question and become acquainted with the emotional signals of the interviewee
- Deflecting questions and keeping the conversation away from your product – focus more on the problem, and then think about how it how it can be solved today.
Need some more help?
Once you have interviewed your peers, there are a lot of other additional tools for you, such as the business model canvas. This canvas is licensed as creative commons and free for everyone. With the canvas model, you can map out the nine building blocks you need for your startup to succeed. It includes everything from customer segments, to channels, to revenue streams. Get your sticky notes out and your brainstorm on.