Guest post by: Peter Gjersoe Coach & Founder, Dominate Selling
Imagine for a moment that you are hurrying up the steps to your ideal client’s office. You are full of enthusiasm looking forward to sharing the excitement of your new product. Developed especially for this client. You have identified a burning need. You have developed the perfect solution. The price is very reasonable. And you can’t wait to get the new product going so that you can all benefit.
A couple of hours later you leave. Your beautiful solution has been bluntly rejected: They do not want it, ever! What happened? You know it is a great product. You know they have a need, and this will solve that need. What went wrong? Perhaps more importantly: Has something similar ever happened to you?
To put more context in the above example: The exuberant sales rep bounding up the steps was Thomas Edison, the most prophetic and successful product developer ever. The prospect; US Congress. And the fundamental problem he wanted to solve; the inefficiency and time waste associated with voting on issues.
In the traditional product development sense - find a need and solve it - Edison was right. The vote counting system was totally inadequate and wasted a lot of time. However, he missed the most important driving force behind keeping the voting system going: The pollies loved the system. It gave them a great opportunity for politicking and posturing when they stated their voting preference.
Have you ever been in a similar situation? Believing you have a great solution when in reality you are spending time and money on something nobody actually wants? After his bitter disappointment Edison swore: “Never again will I create something that nobody wants to buy.”
If the above strikes a chord; read on, this is going to help you.
Who is this article written for?
In his excellent book “Zero to One” Peter Thiel distinguishes between two very different kinds of product developments:
‘One to N Developments;’ this covers the majority of product and service developments worldwide. The product or service aims to deliver an improvement or an enhancement to a basic concept that is already known and accepted.
- This is the kind of development Lean StartUp is created for, and if you are a StartUp Founder, Business Owner, Product Developer or Investor in this area this is for you.
Then there is ‘Zero to One Developments’. Or as Steve Jobs called it: ‘Making your dent in the universe’.
This is an environment where nothing currently exists, and the objective is to provide a solution that will fundamentally change the way people do things. PayPal is a good example: Changing the way payments are made. PayPal changed the world for the better making bank account to bank account transfers simple, fast and inexpensive.
- A Zero to One Development is not the ideal environment for the Lean StartUp methodology. It is a great guide. However, a number of actions have to be modified and tweaked.
Finally, I do not believe Zero to One is the best environment for most new StartUp initiatives. The requirement for a broad client education and associated time lag before income will require a huge financial burden most StartUps are unlikely to be able to meet in the current
For Zero to One Developments the best customer advisory board continues to be ‘the person in the mirror’. And as a StartUp, Business Owner, Product Developer and Investor you need to have a strong belief in a lottery mentality.
Why does Lean StartUp Methodology matter to me?
My background: I spent 27 years in 'corporate life', from Trainee Sales Rep to CEO, and 7 years working with StartUps and SMEs. Throughout my career, I have been involved with 7 product developments.
Of more interest; in four of those developments I was the person outside the ‘development bubble’ who had to explain to increasingly irate Executive Management, Boards and Clients why the development was running late, beg for more time and money, while at the same time protect my team.
Does this sound familiar to you? Then this is written for you.
The more I have learned about Lean StartUp methodology and compared it to my experience, the more convinced I am that I could have saved stakeholder's money, frustrations and sleepless nights, yet brought better products to market, in less time.
Therefore, I want to do what I can to help business owners, product developers and investors understand the benefits, and how they may be able to benefit in their developments by deploying this methodology. And, I am eating my own dog food. I have recently become involved with a product development “Get and Keep Better Clients” and it is being done according to the Lean StartUp methodology.
In summary: This article is based on my experience being involved in 7 product developments combined with lessons from the Lean StartUp methodology and 34 years in selling.
Please read on, I promise there will be actions and ideas here you can put in place immediately and benefit from.
So, lets get into it…
A couple of definitions, and a disclaimer:
- Customers vs. Clients: In my view customers are people and businesses who shop around constantly looking for the-best-deal-of-the-day. They have no loyalty and relationships are all one-way; theirs.
Clients on the other hand are people and businesses who value what you offer and how it continues to enhance their lives. It is people and businesses that you can build long-term relationships with. Providing you continue to respect them and provide value way in excess of their investment they make in you.
I chose to work with Clients, not customers.
- When is a Startup not a ‘Startup’, but an ‘internal-Startup’ and part of a larger business?
A StartUp does not have to be a traditional ‘couple of people in a garage wanting to put a dent in the universe’.
Any company with a group of employees charged with developing new initiatives, ideas or products in an environment of uncertainty should be treated as a StartUp: An Internal-StartUp.
Lean StartUp methodology will work for all companies that are faced with uncertainty about what customers want.
I originally got interested because of the ‘StartUp’ tag. However, when I subsequently watched two interviews with product development managers from GE talking about the major benefits and savings they have experienced by deploying this methodology in comparison to doing things following ‘the normal GE process’; I was hooked.
If GE can use this to save big, cut down on administration work yet push out a better product:
This is worth considering.
I have subsequently discovered that clients benefiting from the Lean StartUp methodology include: Entrepreneurs, Universities, Accelerators and Groups within truly big companies.
- Inside vs. outside ‘the bubble’: My experience of product development clearly shows that the most creativity, focused and qualitative development is achieved when you allow a dedicated, well-balanced team of individuals do what they do best: Be creative inside a non-interrupted environment; ‘the bubble’.
You may occasionally have to apply some ‘demonstrative reminders’ about ‘good developers ship on time’ and the objective is ‘quality before ego’. In other words; normal management stuff from outside the bubble.
- Disclaimer: Following a Lean StartUp Methodology is Not a ‘silver bullet’* that will guarantee you success.
* A solution perceived to have extreme effectiveness
However, if you are a company driven by a compelling vision, expect Lean StartUp mythology to benefit you in the following areas:
- Reduces misunderstandings and time wasters; The Team has common language, values, understanding, vision and direction.
- Focuses team on solving client needs
- Reduces the risk of bringing the wrong product to market
- Reduces waste by ongoing rigorous tests of the underlying assumptions
- Reduces documentation, enabling more doing,
- Increase speed to market with the right product.
Another good example of the benefit of knowing the answer to a key question:
Both Honda and Toyota decided to create a hybrid car.
Honda decided to take a model from its popular Civic range and create a hybrid option. The way to tell it apart from the rest of the Civic range is to look at the sticker on the back of the car.
Toyota decided to create a totally new design. Not exactly pretty, but certainly noticeable.
The result: The Toyota Prius hybrid outsells the Honda Civic Hybrid almost everywhere.
Why? Because Toyota understood that people who drive non-petrol based cars not only want to do the right thing, they want to be seen to be doing the right thing.
Question: Do you want to be on Team Toyota or Team Honda?
Getting solid solutions out the door as fast as possible, with minimal risk, that clients will happily pay for from day 1, is what Lean StartUp methodology is about How else can Lean StartUp methodology be used?
A slight aside; have you ever noticed how only communist regimes and some Venture Capitalists still insist on 5-year plans?
Most sane people realise that there are far too many uncertainties that can and will interfere with best-laid plans within an average month, let alone during 60 months.
Still, I am sure you just like me havd spent endless days and sleepless nights creating 10s (100s?) of pages for the required 5-year Product Development or Business Plans. Only to find that all people want is the Executive Summary or Summary Slide Deck?
This is another area where Lean StartUp Methodology will help you.
Everything you need to:
- Explain your product concept and vision
- Explain the financial opportunity, and
- Provide internal and external updates on the development
All comes together in a single page called “The Canvas”. Easy to review, discuss and to update and distribute.
The key people behind Lean StartUp and where you can get more information:
- Steve Blank (http://steveblank.com/ ) is a Silicon Valley serial-entrepreneur and academic who teaches entrepreneurship to both undergraduate and graduate students at U.C. Berkeley,
Stanford University, Columbia University, NYU and UCSF. Steve is recognized for developing the Customer Development methodology, and author of Four Steps to the Epiphany. His latest book, co-authored with Bob Dorf, The Startup Owners Manual integrates 10 years of new knowledge.
- Eric Ries, (http://theleanstartup.com) also known as ‘the Farther of Lean StartUp’ was a enthusiastic student of Steve Blank’s. Eric’s personal StartUp experience combined with insights about the Customer Development and Agile process was a sea change in thinking.
Eric’s book: The Lean Startup is a “must have” for your library.
- Alexander Osterwalder (http://alexosterwalder.com/) . Alex created the Business Model
Canvas, ‘The Canvas’ and lead author of Business Model Generation is the first book that enabled readers to answer “What’s your business model?” intelligently and with precision.
Alex’s follow-on book Value Proposition Design describes how to get product/market fit right. Both books are highly recommended.
- Ash Maurya (http://ashmaurya.com/) has very constructive practical comments on Lean
StartUp, although not entirely in line with the gentlemen above. Ash is a self-published author of “Running Lean” (http://runninglean.co/), as well the host of a great series of videos and presentations
- Finally, the following article may be of interest: Harvard Business Review: “Why the Lean Startup Changes Everything” (https://hbr.org/2013/05/why-the-lean-start-up-changeseverything/ar/1)
Summary of the Lean StartUp methodology:
This is what it is all about:
1: Building the right solution:
Far too many new developments fail to meet their expected results and end up as duds.
As high as 9 in 10 new developments are duds, draining away money, time and good careers.
Ash Maurya in his video “Why products fail” refers to a recent Silicon Valley study of 1,000 duds. Number 1 reason was not that the development team had failed in building what they had set out to build. They failed because they had built the wrong product, a product that has no market.
2: Avoiding the ‘PUC effect’ (“Put Up Crap”)
PUC comes from the website building sector where PUC is used to claim internet ‘real estate’ quickly. The perception is that as long as you have a good offer, you can always come back later and through A/B testing and other means improve the visitor’s experience. Maybe ten years ago, not today.
Unfortunately, PUC is not limited to website builders. PUC is well acknowledged and not limited to dominant stakeholders pushing their agendas, nor to teams falling in love with their creation and pressing through developing a dud in spite of conflicting opinions. It only takes seconds to ruin a reputation that has taken years to build.
What you want is solid evidence that brings you closer to delivering a solid product that will ship on time, to a waiting and anticipating crowd of clients.
3: Have a better plan that can unite people behind you
I appreciate Iron Mike Tyson’s quote: “Everyone has a plan 'till they get punched in the mouth!”
However, if you don’t have a plan; you are planning to fail.
4: Have a better plan for resource scheduling. This is especially important for the various skill sets required in a development team during the development cycle. Creating and following the plan provides you with a tactile confirmation for when resources will be required.
One of the major benefits of the Lean StartUp methodology is ‘The Business Model Canvas’, or
‘The Canvas’ for short. This will work equally well for a single individual getting their BHAG together, as for a Team going from a concept to delivery.
‘The Canvas’ is a single piece of paper with 9 building blocks. The following has been downloaded from http://businessmodelgeneration.com/canvas/bmc:
For a detailed description, and larger version of The Canvas, please refer to Attachment 1: “A walk through the 9 building blocks of The Canvas.”
Following are the tactical issues associated with a successful Lean StartUp project:
1: First challenge: Everything must be seen through the eyes of the client. Delivering successful products means understanding – in measurable terms - how this product will improve the life of the client. There is no room for ‘features, feeds and speeds’.
2: Second challenge: ‘Deliver The Vision’, not ‘a product’. Never get too attached to the various options you will be considering along the way. The Vision is to deliver a solid product that will ship on time, to a waiting and anticipating crowd of clients.
3: Start by creating a Big Canvas, i.e. A0 size (84.1 x 118.9 cm). This will enable you to create your initial ‘Plan A’ while you go through the various building blocks.
- Note 1; it is highly recommended to create multiple Canvases on A4 size paper and review the same challenge, but coming from different angles.
As an example; try to work through how you would solve the challenge if you had absolutely no financial limits. You can use any material or manufacturing process available anywhere, and you have no time constraints. You should also consider options like solve the challenge coming from an industry, different from yours. It only takes 30 to 40 min to create a canvas, once you get used to it.
Once you have consolidated your various options and have settled on your initial ‘Plan A’, your
Big Canvas should be full of post-it notes meeting the requirements of each of the 9 building blocks.
4: “Get out of the building.” You must verify your theories, your hypotheses, about the various parts of the 9 building blocks. This cannot be done inside the bubble; it will lead to misdirection and waste. You must get out and discuss face to face with the appropriate stakeholders.
Further, this task cannot be outsourced or delegated. The discussions must be done by the individual responsible.
- Note 2: Conformity amongst team members is a must. While conceptually the team will be moulded together within the bubble sharing viewpoints and experiences, it becomes a challenge outside the bubble interfacing with non-team members.
There is a methodology called “5 Whys” that it may be beneficial to ensure everybody is trained and skilled in. For more information, the following link is a good start:
As you return to the bubble and update your hypotheses; you also update the Big Canvas
- Note 3: I recommend you use traffic light colours for your Big Canvas, i.e.:
Red stick-it notes: Original Plan A thinking,
Yellow stick-it-notes: Updated iterations and pivots on Plan A ideas as you learn
Green stick-it-notes: Your hypothesis has been verified by multiple sources, and you are confident you have not just Nailed It when it comes to the client’s problem. But you have also Nailed It in the other 8 building blocks of the Canvas.
- Note 4: Starting at the conclusion of Plan A of your Big Canvas; download a PC based version of the Canvas and regularly update in line with your changes. This will serve as record keeping of work achieved, as well as provide updates to internal team members, as well as
whoever-need-to-know on the outside.
- Note 5: Do not destroy disregarded hypotheses. You never know when, under different circumstances, they become valid.
5: OK, you have completed the work. You have a Big Canvas full of green stick-it-notes. You have
Nailed It! Time to start building the product?
This is the time to congratulate the team on completing a great first part of the job.
Your next job is to sort through and prioritise the requirements for the features required to meet the expectation of your product.
This is the time to channel Steve Jobs: ”Less is more”: What are the absolute minimal number of features we need to solve the problem, improve the life and make it a great experience for the client?
Another Steve Jobs obsession you may want to consider is: How can we create a product that solves the client’s problem, improves their life and make it a great experience in the most straightforward way? Read: No user manual is required.
- Note 6: This is a great challenge for engineers who by nature will try and load up on features that may be elegant, but will do nothing to solve the basic problem you set out to solve.
6: Continually update all stakeholders about what is happening.
Following is a truism from sales: ‘”A win has many parents. A loss is an unwanted orphan”. Never exclude people you believe can be beneficial to the project.
This is not about ego, but about making everybody desire to be part of your amazingly exciting project. The more key contributors are involved; the more risk is minimised.
- Note 7: About bad news. Bad news will happen, so get over it. Never keep it to yourself, you will not be able to solve it alone and sharing problems will not reduce your stature.
The opposite is true; people grow and step forward to help when they are trusted with the truth.
7: When you have decided on a minimal-features-required product, this becomes your MVP (Minimal Viable Product), which of course will have all stakeholders - especially first-ship clients’ support and approval - before any code is cut, or plastic mould ordered.
However, the good news is that you have something concrete you are about to be able to touch and feel and get people focused on.
8: Because all stakeholders have been kept up to date during the ups and downs of the project so far, you are in a position where you are meeting budget, timeline expectations and shipping your product to a group of clients, who know exactly what they will receive, and are
excited. Now you can celebrate.
9: From here it becomes a leveraging issue. You will be able to get great testimonials from firstship clients that can be leveraged onto associated client groups with minimal risks, And internal purse strings will be loosened as you have delivered on the most critical part of any product development: You have built the right product for a grateful market.
10: Some final comments about first-ship-clients. It is very critical to get this right. Happy firstship clients will carry you, and your product. Unhappy clients will do the opposite. Ensure when you start identifying the market niche for your first-ship clients you make it a micro-market-niche.
If you need a reminder, think Facebook. Mark Zuckerberg did not start with an initial plan to enslave the world and have 1.4 Billion users (Q4, 2014). He started building a dating site for his classmates at Harvard University. When he dominated that market niche, Facebook became available to the whole of the Harvard University. From there Facebook was opened up to east coast universities. Then US universities as a whole. Then European universities and gradually non-universities became involved country by country.
The same is true for Amazon and eBay. Both started with a micro-niche they could dominate and gradually leveraged into associated market-niches until they became the massive entities they are today.
Are there other areas that should be considered for a complete solution?
I believe that the Lean StartUp methodology is brilliant for the core product development. Create the plan, build the MVP and gradually leverage into bigger and bigger markets.
However, there is a potential dichotomy. Product creation is traditionally, and quite rightly, the area of Engineering. Whereas taking a product and leveraging into larger and ever bigger markets is a Sales activity.
Is there a clash? I do not think so – providing it is handled as part of the plan. Sales need to be part of your plan from the start and has valuable input to provide - just do not allow Sales to take over your project.
What can Dominate Selling do to help?
Apart from educating and training people in the Lean StartUp methodology, there are three other areas we can help:
Right client, Message and Media:
- A lot of focus and time needs to be committed to identifying who exactly is the most suitable client, the client who will most benefit from this product. This is normally done by identifying the client’s age, sex, position, income, marriage status and so on and so on. However, that
is only part of what you need to know.
At least as important is seeing the issue from the aspect of your client: What kind of a supplier do they expect to buy this product from? How do they expect to buy it? And so on.
That will determine what you have to change to become the ‘right supplier for the right client’, as part of this, and is that something your company is willing to undertake.
- Secondly, getting the message right so that it will attract the right client. One of our biggest issues with advertising is that we have taught ourselves to totally ignore the estimated 8,800 ‘requests for attention’ we are bombarded with every day. How to break through to the
people that matter to us? Difficult, but not impossible. Requires a lot of social science and sociology feedback. However, the same feedback also provides input to how that group of the population wants to be serviced, so the effort
is worth it.
- Thirdly, when the right client group has been identified, and the right message to attract them it becomes an issue of what is the most effective media to communicate with your ideal clients.
I keep getting surprised at how little attention is placed on making sure the people that work together, want to work together in the first place. Reality is that if you think you have won, or lost, you are right. And it takes very little in terms of right, or wrong, mindset to cause
havoc inside the bubble. Make sure you have the right mindset team working with you.
This is the last contributing factor. You need somebody who can and will take the longer-view.
Once a StartUp of any size has been established; it is very difficult to change. It is at the start the crucial decisions regarding vision, mission and values are set. Unfortunately, this is another victim of the PUC effect: “We can always come back and make changes if required later. Oh no you can’t; it is very difficult to do without big human costs. Lastly somebody needs to watch out and ensure internal and external systems and regulations are met. Not always something getting a lot of attention during the excitement of development.
Your best next step:
Following are a few options for you:
You can get up to speed by yourself. Start by Google “Lean StartUp” (2,970,000 hits) or “Lean
StartUp methodology” (203,000 hits) and start reading, and or looking up people referred to in the articles.
We can help you. The following may be of interest:
(1) Please send an email to me at email@example.com asking to be included in the next webinar where we will be expanding further on the principles discussed in this article.
The webinars are normally held monthly. Or
(2) Contact me directly (firstname.lastname@example.org or +61 407 900 939) and arrange a suitable time for a conversation.
The way we do this is:
- We will send you some questions regarding your objective, which will remain confidential between you and me, and agree on a time that is convenient for you.
- Based on your answers, we will research your issues in preparation for the conversation.
- The conversation will take place using Skype and during the conversation, I will do everything possible to help and assist you put a plan together to resolve your challenge.
Up until this point there will be no charge, nor any further commitment expected from either party.
Should we subsequently agree to work together, we work on a very reasonable investment basis.
To further minimise your risk, every invoice from Dominate Selling comes with the following statement: “Unless you feel that we have delivered value in excess of this invoice: Please tell us, and then tear up this invoice”.
Summary of the Lean StartUp and getting Dominate Selling involved: No Surprises
To the best of your success
Coach & Founder, Dominate Selling
+61 407 900 939
Right Client, Message & Media + Right Mindset + Governance = No Surprises
Lean StartUp Methodology
Attachment 1: “A walk through the 9 building blocks of The Canvas.”
For the purpose of this walk-through I have downloaded Alex Osterwalder’s original ‘Business Model Canvas’ from http://businessmodelgeneration.com/canvas/bmc The website also has a number of videos explaining the Business Model Canvas.
First comment: Always focus on client needs, and how will this benefit the client?
Second comment: Do not get hung-up on the definitions of each building block. Focus on the intention of the building block and consider replacing the descriptive words for the block with something that resonates with you, your team.
Third comment: The process of going from a concept to success in each building block is dependent on the owner getting “out of the building to test and validate”. This cannot be outsourced or delegated.
- The objective of getting out of the building to test and validate is to eliminate the unknowns early, and get bad news out of the way soonest. Bad news may be painful but knowing where the roadblocks are early, will enable you to redo and pivot early and possibly often. This in turn will save you money, time and frustration, in the long run.
Last comment: Make sure you focus on and measure only what matters.
- Q: And what matters? A: Whatever will bring you closer to creating a solid product, which will ship on time, to a waiting and anticipating crowd of clients.
Reminder: The objective and benefit of a ‘Business Model Canvas’ is on a single page to map-out the entire business model using 9 building blocks.
The following is a summary of the intent of each building block. Please note, the process of filling out the Canvas does not follow a left to right sequence, but follows a logical process starting with:
1: Client segments:
This is where we identify whom we are creating our value proposition for; defining our ‘Ideal
Client segments’. (Example: Let’s say ‘newspapers’ are your target market. Within ‘newspapers’ there are two very different client segments, each with very different needs or problems: Readers and Advertisers)
- Who is our ideal client?
- What is the problem, or pain points, which each client segment needs solved?
- How big/costly to each client segment is this pain?
- Is this a niche or mass market potential?
- Centralised or geographically spread?
2: Value proposition
Identify for each client segment: the specific value proposition (include bundles of products and services required)
- What client pain point(s) do we solve?
- What is our unique value proposition?
- How does this solve our client’s pain?
- How does the client describe the solution: I.e. “I used to…, but because of …, I now ….”
How are we going to reach each client segment to deliver our value proposition?
- How does each client segment want to be communicated with pre-sales
- Direct or through channels (if through channels: => Building Block number 8 ‘Key Partners’)?
- What are all the touch-points that need to be in place to deliver value to each client segment?
4: Customer relationships
What kind of relationships does each client segment expect us to establish and maintain with them pre-sales, during-sales, post-sales?
- High touch vs. Low touch (example: A private bank has ‘high touch’, close 1:1 relationships vs. K-Mart that has ‘Low touch’, low personal relationship)
- How are channels integrated and managed?
5: Revenue streams
What is each customer segment really willing to pay for? (Newspaper example: Are people really willing to pay for news? Or is cross-subsidy better through various kinds of technology. Example: The Australian including a Samsung tablet to read the news on as part of a subscription).
- Who is each client segment expecting to deal with for payment?
- How and through which pricing mechanisms will the business model capture income?
- What is the client lifetime value?
- How and why?
6: Key resources
What is the infrastructure required to create, deliver and capture the value we are offering, and what key resources must be retained in-house?
- What is it we do?
- What is it we, and only we, do better than anybody else which can enhance this process?
7: Key Activities*
Identify what activities you need to perform well to succeed.
Go through each area and identify which is more important;
- Plant & equipment
- Information systems
- What will we need to scale big?
* I recommend adding another component to this building block: Key Metrics
- Number of leads to sales conversion
- Client acquisition cost
- Client Lifetime value
8: Key partnerships
Who are the key business partners we want to create Joint Ventures with?
- Leveraging what they do best so that we can outsource to them
- Do not need to invest in those services in-house
- Optimise the process
- Reduce our risk by leveraging known and tested processes
- Include suppliers in key partnership
9: Cost structure
As the financial impact of the preceding 8 business blocks’ infrastructure is understood and detailed, it is possible to realistically identify the cost structure to support the business model.
Attachment 2: Some final comments:
Knowing where roadblocks may hide will make your journey smoother. Following are observations and comments that will be good to keep in mind.
Team members sometimes believe they know better than the prospects and will avoid going-outside-the-building for verification.
- Proven again and again, NOT to be a good idea. You need to continually verify that everybody is on the bus and doing what is expected: “You need to inspect what you expect”.
- Another underlying reason for getting outside verification is the fact that if you want to create something successful it is a question of risk mitigation. And risk mitigation is about continually verifying that you are on the right track.
As you move into the phase of outside verifications you have started down a path with an objective; Dreamtime is over! The mantra; “Viability is more important than concept” has to be your main focus. However, that does not stop you changing and pivoting in your pursuit of meeting the objective with the best solution.
As owner of the project you need to identify very early what you determine is success criteria, especially “What” and “When”. Then add in what evidence procedure you need to achieve for you to know that success has been reached
- Sounds weird, however unless you have a clear vision from the outset, there is the possibility that the project goes on and on striving to achieve minimal improvements.
‘Why’ – what a good question, often forgotten.
Remember, it is not just about shipping a solid product on time. There is always a bigger picture, the longer-term company objective. Do not lose sight of the wood, because you are focused on the individual trees.
- ‘Why’ are you doing this product development? Where does it fit into the bigger picture and what else outside the bubble do you need to keep an eye on, otherwise it could come out of the dark and torpedo you and your project.
Initial ship clients: Do not get side-tracked by others wanting to make this group bigger than you want.
- Remember if you believe everybody is your prospect, you will end up with none. Focus on the correct micro-market-niche. Using Facebook again. Mark may have had wild dreams about world domination at the start, but he focused on his class members as Initial ship clients. When he dominated that micro-niche, he leveraged into larger and associated markets. First the rest of Harvard University then other US universities. Before he knew it, Facebook had become ‘freakishly addictive’ and the snowball was on its roll down a very big hill.
You must nail the client pain early. This means inserting yourself deeply into your client's mind and understand what problems and issues they want solved. The question you then need to answer is: “Should we build this?” not “Can we build it?”
- Today it is no longer a situation of ‘if you build it, they will come,’ Hollywood has a lot to answer for.
As soon as you have verified that you have nailed the real client pain, you should start to shape ‘The Offer’.
- ‘The Offer’ is what will initially get, and keep, your ideal client’s attention. It is never about ‘the product’, which is likely to change over and over.
You need to combine two facts that will not change:
Your client's pain combined with your unique ability to solve their pain. Based on external verification, keep changing and modifying The Offer until you get verification: ‘That is it! That is exactly what your ideal clients wants to hear.’ Then make it the common rally-point and the foundation you can build the rest of your campaign on.
A difficult question, especially for very new startups is the key question in Building block 2:
“What is our unique value proposition?” That in turn leads to other key questions you need to have good ready answer to: ‘Why should the client deal with us? Why are we the right and only option for our clients?”
- First appreciate that the questions are tough questions for any company, big or small.
Never go for platitudes; your clients will see straight through them and never forgive you.
For very new startups without previous wins to leverage from, the most important factor is:
You! You are unique. Your values and commitments are what will set you apart, and what your clients want to know about. Do not allow others’ perceived grandeur to minimise your dreams and aspirations. Never compare your backstage chaos to others’ front stage.
Be very careful with your resources. Money is like oxygen; once gone; you’re dead.
- Ensure you are aware of how much runway you need, compared to how much you have.
Don’t just have a Plan A, make sure there is a Plan B and C when it comes to resources.
Speaking about having back-up plans. Above I only refer to having resource back-up plans, I am not referring to the major development.
- Never allow alternative, just-in-case plans, to creep in and steal oxygen from your major objective. Reality is that if you have a back-up plan that is where you are going to end up.
Burn the ships on the beach, and make a dent in your universe.
‘First mover advantage’ is old hat. When you analyse Toyota, Ford, Apple, Microsoft, Google and Facebook, they are all fast followers.
- The companies that are striving for first mover advantage today are the cowboys of yesteryear: easily recognizable by the arrows sticking out of their backs.
My closing wish for you:
Go Forth and Create, Then Deliver Value While Capturing Profits