I enjoy helping people develop and incubate their business ideas. I subscribe to Steve Blank’s lean startup model which, in-a-nutshell, teaches you how to fail fast, verify the assumptions you’ve made about your business, and pivot quickly when needed. Many small businesses fail because they haven’t looked at how they’ll get, keep, or grow their customers. They make faulty assumptions about the need for their product or service and assume their revenue will grow each year (we’ve all seen these hockey stick revenue charts).
I encourage you to review the free videos, books, and information from Steve Blank. But I’ll give you a broad overview below. Before you drop everything (including your hard-earned wealth) on a business idea make sure you review this handy checklist:
- Get all your ideas down on paper. No ideas are bad ideas.
- Articulate the problem you are trying to solve for your customers. How are you fixing the problem or creating value?
- Review how customers are currently solving this problem. How is your solution different?
- Once you’ve developed all these hypotheses, talk to real-life potential customers and clients. Get them to tell you in their own words what ongoing problems they have. Do your ideas solve the problem they’ve told you they have? .
- Revise and re-test by talking to even more potential clients
- Watch out for your confirmation bias – the tendency to listen for and gather information that proves your hypothesis. Instead ask open-ended questions, and continually ask yourself, “what assumptions drove me to this?”
You know you have a good business idea when you have people saying, “I want to buy that now!”
Once you’ve gotten to that point, only then will you need to start thinking about pricing, marketing, onboarding, cost structure, financing, etc. Lots of people start with these operational aspects, without verifying that the problem they’re solving is real and their solution is useful to clients and scalable.
Blank has lots of thoughts on the best strategies for testing pricing and marketing to clients, but I’ll save that for another post. Hint: you test the market, ask your clients and verify your assumptions.
