There has never been a better time for entrepreneurship.
The cost of starting a technology business has reduced ten fold, the number of tools to help you grow your business today are innumerable and early stage funding has become highly accessible.
If you are looking to transition into the sexy but scary land of entrepreneurship , here are 15 things to help you move from idea to product market fit to scale.
1. Learn The Lean Startup Methodology
Lean Startup is a methodology developed by Eric Ries that follows the simple process of build, measure and learn with customer feedback loops.
You will learn a form of systemic/pattern thinking that will help you start your business effectively. The concepts are simple and life changing.
You’ll forever change the way you think of starting a business.
2. Explore Your Customers
Once you have an idea, start with customer development. Its a phase of exploration where you try to get qualitative information around their problems and current behavior.
Don’t stop exploring till you have identified a customer segment and their current problems. Want to learn by doing, check out this great blog by Kissmetrics.
3. Pitch Your Idea
Only once you’ve identified a customer segment that has a problem worth solving, then look at pitching your solution.
Pre-sell and see how they react.
The messaging for a product/service is the same whether you have the product or not.
This is a highly effective process to check for demand of your service.
4. Identify Early Adopters
While pitching your idea, look for those early adopters.
Early adopters are those who are excited about your product, will talk about your product incessantly and have been looking for this solution themselves.
They are your biggest evangelists, your cookie monsters, your everything. Don’t stop looking till you find them.
5. Concierge Your Service
Once you have pitch your idea, its important to manually deliver the service in the simplest way possible.
Whether its via an email, a Google doc, a spreadsheet or actually going to the customer’s house to deliver a box, the process of providing this service in small batches will help you become more efficient.
It might be inefficient in the long run but in the short run it helps you create better user flows and product life cycles.
6. Start Building User Flows
The next step after having delivered the service is to build a user flow.
Build a flow that shows the interaction of your product with a user from start to finish.
It should have a list of objectives and goals and the actions you want them to perform.
7. Build Wireframes
The next step is to start sketching your skeleton of your product by building wireframes. Wireframes is a bare boned structure of your product on paper.
It displays the functional elements of a website and is a great starting point to planning your structure and functionality.
Here are some great tools to build your first visual guide. Check out the top 20 wire-framing tools here.
8. Use The Lean Canvas
You’ve identified a solution, a product flow and have started building the rough schema of the prototype.
The next step is to analyze what makes your business different, what’s your unfair advantage over your competitors, and how do you plan to make monetize your product/service. It's a fantastic canvas to look at your business in one snapshot.
To learn more about how to use the Lean Canvas, here is a detailed explanation.
9. Build Extensive Customer Personas
You have a product flow, identified your early adopters and have your business model chalked out. The next step pivotal to every business and most companies fail to do is build your customer personas.
Customer personas are a semi-fictional representation of your ideal customer based on market research and real data about your existing customers.
When creating these personas, its important to include customer demographics, behavior patterns, their motivations and goals. The more detailed you are, the better.
10. Build Prototype
Now you are all set to start building your prototype. A prototype is defined as the simplest functional model of a product that performs all the basic functions.
At this stage, you might have to get developers (front end, back end), designers, head of engineering involved to build a prototype that can be scaled in the future.
Prototyping can take anywhere between 3–9 months depending on how simple or sophisticated the product is.
11. Measure Product Market Fit
Ah, this is the pivotal point of most startups: product market fit. “Product/market fit means being in a good market with a product that can satisfy that market.
The best team with the best product will fail if the market is not there (using product and service interchangeably). It’s the only thing that matters” according to Marc Andreessen, to whom the term is often attributed. Companies should strive obsessively to achieve it until they do.
Every startup should try to run as many experiments, talk to their customers regularly and see the best fit their product can provide to a market. Here are certain ways to find out if you have achieved product market fit.
12. Set Business Goals
Once you have achieved product market fit, its time to start looking at hyper growth. Growth starts with setting ambitious business goals.
What’s the revenue you want to achieve at the end of 2015?
Once that’s defined by key stakeholders in the company, we move towards defining Objectives and Key Results (OKR’s) for every individual. Goals of each person should be tied to company’s objectives.
We then further continue to setting other important metrics like
- Cost Per Lead (CPL),
- Cost Per Acquisition(CPA),
- Life Time Value(LTV).
This systemic approach will help decide which metrics to concentrate on, which ones to tweak that can directly impact revenue.
13. Implement Tracking Tools
While trying to grow its extremely important to do 3 things:
- Implement tracking tools to collect data.
- Analyze Data & find areas of improvement
- Run an experiment
Top 10 tools for tracking web metrics.
14. Define Lean Analytics Flow
Lean Analytics aka Pirate Metrics is a system around which companies like AirBNB, DropBox have built their systems of growth.
The Lean Analytics consists of 5 major metrics:
Its important to maximize the conversion of a user from Acquisition to a user who pays for your product. This whole process is known as Conversion Rate Optimization and its important every company analyzes these five main metrics.
If you want to read more about Lean Analytics, check out this post written by Ash Maurya.
15. Optimize and Scale
- Business goals defined.
- Metrics in place.
- Tracking tools installed.
- Analyze Current Data
- Identify Areas of improvement
- Decide Metric to focus on.
Time to start running some experiments!
The whole process of scaling is to run as many experiments and see what resonates with your customers. When you find that unicorn of growth, that absolute maxima, chase it. Double down on it and go on and change the world.
Cover Image: Invalidate My Assumptions - Lean Startup Machine. | Tech Yizu