Most entrepreneurs start with a strong initial vision, and a Plan A for realising that vision. Unfortunately, most Plan A’s don’t work.
Smart people are great at rationalising almost anything, but entreprenuers are especially gifted at this. It’s important to realise that your initial vision is built largely on untested assumptions.
Lean methodologies can help you systematically test and refine your initial vision. Running Lean by Ash Maura outlines, and gives practical examples on how to do so.
Running Lean has four parts:
- The Three Stages of a Startup (covered in this post)
- Documenting your Plan A
- Identifying the riskiest parts of your plan
- Systematically testing your plan.
These are my personal notes. I hope that you’ll find them useful.
The three stages of a startup
1. Problem / Solution fit
It is expensive to act on ideas, and the biggest risk for most startups is the risk that they’ll build something that nobody wants. There are two costs to this:
- The cost of building something that nobody wants - this is an very visible cost because it can be measured in dollars, time, staff turnover due to dissatisfaction related to lack of meaningful work, etc.
- The opportunity cost of building something that nobody wants - this is a more insidious cost; you’ve wasted months or even years of your time.. time that could have been better spent validating and working on things that people actually want.
Because of this, it is important to identify whether the problem is one that’s worth solving.
Problem / solution fit is about about answering the following three questions regarding desirability, viability, and feasability:
- Is this something customers want? (is it a must-have?)
- Will they pay for it? If not, who will? (is it viable?)
- Can it be solved? (is it feasible?)
You can attempt to answer these questions using a combination of qualitative customer observations, and interview techniques.
From there, you can attempt to derive an MVP.
2. Product / Market Fit
In this phase, you measure whether you have built something that people want.
Once you have identified a problem that’s worth solving, and your MVP has been built, you can then test how well your solution solves the customer problem.
Achieving traction is the first significant milestone for a startup. At this stage, you have a plan that is starting to work - you are signing up customers, retaining them, and getting paid.
Once you have product/market fit, and have gained some traction, the next step is to shift toward growth, or scaling your business model.
Want to read more?
I’ve written the notes on this book in several parts, you can read the other parts here:
Thanks for reading!
I hope you found this post useful. Do you have any questions? Are there any follow-up blog posts you’d like me to write relating to this? Feel free to leave any feedback in the comments below.