Category Archives: Starting A Business

Learning Through Failure: Startup Edition

Failure is a fact of life. While some people prefer to gloss over that reality, I would rather embrace it. In any endeavor we undertake, no matter how successful it ultimately proves, we will fail in some small way. That’s a deeply humanizing truth, and while it may seem pessimistic, our failures (small or large) often hold the key to our success. If we can learn from our mistakes, we emerge stronger, smarter, and more resilient.

I’ve written previously about what we can learn from products that failed, and even highlighted a few prime examples of major missteps from some of the most successful companies in the world. While major corporations often experience failure, it’s an even greater specter in the startup world. Passionate entrepreneurs are launching innovative new ventures every day despite the fact that 90% of startups fail, as Neil Patel recently reminded us in Forbes. Thankfully, this harsh truth conceals a silver lining.
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Yea or Nay? How to Create your MVP

You're almost across the finish line! If you've tuned into the previous installments of our “Yea or Nay” series, we have discussed strategies surrounding vetting your idea and building your initial team. Now it's time for the final step: building your minimum viable product. 

The idea of an MVP was introduced to the world by Eric Ries, a Silicone Valley entrepreneur and Yale graduate, around 2008. As its name would indicate, the idea is simple. In his blog Startup Lessons LearnedRies explains the idea of MVP as this,

“The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”

In other words, the minimum viable product is another crucial step in what I believe is the most vital key to business success: extracting as much customer feedback as possible. As N. Taylor Thompson of the Harvard Business review writes,

“In creating a minimum viable product, entrepreneurs choose between experiements that can validate or invalidate their assumptions about a business model. If your MVP is a worse product than your imagined final version, success validates your idea; failure, on the other hand, doesn’t necessarily invalidate it. If your MVP offers a better experience, then failure invalidates your business model; success doesn’t necessarily validate it.”

If you're racing to the finish line of startup success, here are some simple steps for building your MVP and determining whether or not your startup approach is valid. 

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Your Customer Satisfaction Survey Stinks: Getting Meaningful Feedback

As your business begins to grow and your customer segments begin to expand, you’ll have to start addressing the idea of customer feedback and all the complexities that accompany it. From my experience, you’ll learn two things immediately:

  1. There are many great tools to use to create customer feedback surveys.
  2. Using these tools to create meaningful surveys can be extremely challenging.

Most entrepreneurs discover this the hard way. Hours of valuable time are wasted creating surveys filled with ineffective and confusing questions. For some reason, customer feedback surveys have become a “trial-by-fire” learning process for most new entrepreneurs. And while “trial-by-fire” may sound note-worthy, it is wholly unnecessary and a waste of valuable time and money.

We’re here to help you skip this arduous process, breeze through the fire, and ensure you are capturing a clearer understanding of your customers' experiences and your company as a whole.

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What We Can Learn from the “Pivot”: Simple Steps to Rebranding Success

In movies, television shows and magazines, entrepreneurs are idolized and presented as individuals with laser-focused plans who are willing to work through obstacle after obstacle to make their big vision a reality. While most entrepreneurial success arises from an understanding of where you are and where you want to be (i.e. the big vision), this emphasis on stubborn determination is a bit overblown and, frankly, bad for business.

The truth is: great entrepreneurs must be willing to change. The really good ones understand that new businesses and products are unreliable, and they will likely need to change their idea at some point in the future. In the startup world, we refer to these changes or strategic shifts as “pivots.”

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Is This A Good Time To… (Part 5) – How To Derisk Your Venture

inzenka

Larry Zentner, Director of Inzenka, recently wrote a great letter to the Financial Times’ editors with the headline, “What successful entrepreneurs share is a ruthless approach to derisking.

He notes that, “Breakthrough innovations such as.. the iPhone are not simply the result of entrepreneurial luck, but of brilliant commercial management.” He points out that successful launches have a solid pipeline of sales long before launch.

That, my friend, is the essence of derisking a venture. Here are several examples of brilliant commercial management.

#1 – In the past year, we were engaged to help launch a US-based manufacturer of all-electric trucks. For two years in advance of the formal market launch, the company’s investors had funded a full time sales manager who pre-sold the company’s products. For the launch press conference, representatives from three Fortune 500 truck fleet operations attended to show support for this new company and its products.

#2 – During the development of his innovative mutual fund analysis software, Bill Chennault shared the process and the prototype product with an online community that included several prominent financial journalists and notable financial planners. Overlap launched with several key customers and journalists completely engaged with the product. Overlap became an industry standard and continues to evolve today.

#3 – In preparing the launch of the original Macintosh (1984), Apple set the standard for building a pipeline of support long before a formal product launch. In his book, Selling the Dream, Guy Kawasaki details his role as the Macintosh evangelist. His assignment was to sell the third party developers (both hardware and software) on creating hardware and applications for the new Macintosh OS before the product launched. At the time the Macintosh emerged in 1984, the third party developers delivered an array of complementary products that helped make the Macintosh an immediately useful product. The availability of compatible laser printers, PostScript and PageMaker helped to create the desktop publishing category and, ultimately, a huge Apple success.

In launching your product, it is imperative that you start very early engaging the key players in your market space. The more your engage, the more you will benefit from the input from key prospective customers, key prospective distributors, key collaborators with complementary products and key suppliers.

The more you can engage with your key players in your market space, the more you derisk your venture.

Is This A Good Time To Start A Business? (Part 4) – Finding An Opportunity

The problem of identifying a new business opportunity is best summed up by science fiction writer, William Ford Gibson’s observation that, “The future is already here – it’s just not very evenly distributed.”

Interestingly, the topic of identifying new opportunities does not get a lot of attention. Many experts focus on trying to understand unmet consumer needs. That’s tough to do at best.

In his book, Innovation and Entrepreneurship, Peter Drucker summarizes the best approach that I have seen — look for the unexpected. The genius in this approach is that it focuses on what is happening in the marketplace that is positive and unexpected.

Drucker points out that most businesses tend to focus on what’s wrong. As a rule, business meetings focus on the negatives — low margins, low sales volumes, unsuccessful products, lost customers.

Virtually no meetings have an agenda item for “what went right”, “what exceeded our expectation”, “which customer ordered more than expected and why”. These meetings miss the point. The unexpected is likely the clue to the future –– the clue to the next opportunity.

If you think this is too simplistic to work – remember Ray Kroc, the genius behind McDonalds.

In 1954, Ray Kroc was a salesmen for Prince Castle Multimixers. He called on the McDonald brothers in San Bernardino, CA.

While most restaurants bought one or two Multimixers, which could mix five shakes at once, the McDonald brothers had purchased eight. And Kroc was curious to see what kind of operation needed the capacity to make forty milk shakes at one time. What he learned was the the McDonald brothers had created the prototype fast food restaurant and had, in essence, industrialized food preparation. He bought out the brothers and launched an industry.

If you are working for company today, you need to keep a list of all the unexpected things in the business.

Just one good unexpected business result or outcome could be your ticket.

Is This A Good Time To Start A Business? (Part 3.0)

(In the first two posts, I covered the ideas that 1. a business is principally about creating a customer (not a job for yourself) and 2. the importance of starting with a small, defined group of prospects.)

The next decision is essentially the most important one that you will make in creating a business.

The operative question becomes, "where do I start in defining the best group of prospective customers for my new business?"

The answer is, YOU. You start with yourself.

Almost without exception, the successful businesses we have seen have one attribute – the founder(s) start a business that is adjacent to their life experiences. Adjacency takes lots of different forms:

– Founders leave large firms (accountants, lawyers, chefs, publishers) and start niche or boutique businesses.

– Founders leave careers and create businesses based on their lifelong hobbies or interests. The movie, Julie and Julia, tracks both Julie Powell and Julia Child's paths that began with their love of French cooking and led to successful publishing careers.

– Founders often pursue a technology or process change to create a business. The founders of Garmin did exactly that and created a benchmark company.

Choosing an adjacent category leverages your experiences and gives you a running head start on your business.