As entrepreneurs we like to take action, fast. We want to see results, fast. When we get an idea in our head we often want to start seeing it turned into a reality as quickly as possible, since we always believe that our idea will be the next big thing.
The problem with this is that it’s more important in the early stages to slow down rather than speed up. The reason why 90% of startups fail is most often because they have an unviable business model. So if there's a way to make sure your business model is viable before leaving your day job, wouldn’t you want to do it?
1. Plan your business model
Having an idea without a business model is like having a sports car without a steering wheel, it’s pretty useless really. Sorry to be such a grump, but everyone has ideas. The difference between the successes and the failures is that the successful people plan their business model and test it continuously, adjusting it as they learn. You don’t start with your perfect idea of a business and run off to build it. You start with a Plan A and iterate until you get to a plan that works.
In the beginning stages of a business there are so many unknowns, so many risky elements that need to be tested, so what is the point in spending hours (potentially months) of your life working on the perfect 60+ page business plan? There is a better way.
The Lean Canvas by Ash Maurya (adapted from Alex Osterwalder’s Business Model Canvas) takes 20 minutes to complete and summaries all the juicy bits into one page for you. It’s the easiest way to show your business model to an investor, an advisor, anyone with no background in what you're trying to achieve. And the best part is that it focuses on the customer and their problem so gets to the heart of what drives a successful start-up.
2. Get the support you need
One of the hardest things about being an early-stage entrepreneur is that you have to wear 100 hats in one day, every day. You are in charge of marketing, product design, business planning, financials etc. This is fine in the early days, but one of the most common reasons Venture Capital firms source for startups failing is that there is a single founder. without having someone to be accountable to and have someone to carry the load with you, it can get tough and can make it too easy to drop the whole thing when it feels too overwhelming.
The type of support that helps early-stage entrepreneurs is often masterminds, coaches and advisors. There are plenty of options out there for each type of support, but you need to choose what's right for you.
It’s also important that you get the support from those at home and around you. Your boss is possibly not going to be your biggest supporter on this idea, but friends and family can be. It’s often very hard to talk to those close to you about this big life change you're considering and it’s a great time to think about what you ‘e trying to achieve and most importantly why. When you can tell people a story about why want to drop your comfortable job with a secure pay-check to pursue this crazy new idea, it helps to start with a why.
Is it for more freedom? Is it because you need a new challenge? Is the problem you are trying to solve so important to you that you can’t stop thinking about it? Or are you just so done with being told what to do each day? What's your Why?
3. Speak to your tribe
So you have a business model all planned and you have theorised that there is a cost/revenue model worth chasing. Now it’s time to find your potential customers. This is probably the hardest step for most entrepreneurs. Most often, we fall in love with our own solution and want to go about building it as soon as possible. But we have zero proof of whether anyone out there will spend a penny on it! Doesn’t that sound a little bit crazy?
Before spending months of your life building something nobody wants, take a few weeks to find out if you’re solving a problem that your customers will actually pay for - talk to your tribe. If you think you can’t find your customers, then what will make it easier to find them once your product is built? People won’t just come flocking to your door, you will need to get out there and market it. So if you can market it, then use those connections to start talking to them now. If people have a problem, they will be happy to help you solve it for them.
When you start the conversations with potential customers you aren’t pitching your idea, you aren’t trying get them to buy it just yet, you are only trying to find out exactly what they struggle with and where you can help them. A great book to read on this is The Mom Test: How to talk to customers & learn if your business is a good idea when everyone is lying to you by Rob Fitzpatrick.
If you’re holding down a full time job, time is of the essence for you and you may need to get help with your customer interviews, or work it all around your lunch hours and after work hours. It’s tough, but will be so worth it when you learn what you need to build for a successful business.
4. Build an MVP
Your MVP - Minimum Viable Product is the best way to test if your idea can gain traction. It is the simplest version of your product that has just enough features to validate learning. The point of your MVP is to start getting feedback early, so you can save time and money on building the wrong thing.
Too often we fall in love with our solution and assume that it’s what other people want, but this is crazy think! How do we know what complete strangers have in their heads? The usual line used here is that if Henry Ford had asked people what they wanted they would have said faster horses. This is so true, people often struggle to imagine new technologies or for things to be done differently to what they already know. So what Henry Ford needed to find out was that people wanted to go faster. This is the problem he set out to solve.
Deciding what goes into your MVP and what type of MVP to build can be tricky. There are pros and cons to each type and often one type of MVP suits your product/service better than others. The main thing is to remember that you are building the simplest thing that enables you to learn what customers actually want.
5. Get your first paying customer
This is the absolute holy-grail for early-stage entrepreneurs like yourself. If you can get 1 paying customer, you can get 10. And if you can get 10, you can get 100! You just need to know how to build something they will pay for and the strategies to get them to pay for it.
If your conversations with your tribe were well structured and you got the information you set out to get, then this step should be a million times easier than those who skipped step 3. Your conversations with those customers would have shown exactly what problems they have that need solving. Then step 4, your MVP, would have highlighted exactly what customers love and hate about your product. It would have given you the chance to adjust as you build to create something that people are lining up to pay you for. Isn’t that magic!
There are also clever ways to get your first paying customer before even building the full product. These are all linked to your type of MVP you have built and the way you go about it depends on the type of product/service you are building.