“The Lean Startup” has become a book that every tech entrepreneur has read and quotes regularly. Eric Reis, the author of the book, coined the term “lean startup” to reframe what it means to be a startup and the process that a startup should follow to ensure success… or at least to take a good stab at it. The main premise of the book is that a startup is simply a
series of experiments. Experiments that have a hypothesis (an idea to test), limited variables to test (test certain aspects of your idea, not the whole idea at once), and success measurements (how you know when you succeeded or failed).
series of experiments. Experiments that have a hypothesis (an idea to test), limited variables to test (test certain aspects of your idea, not the whole idea at once), and success measurements (how you know when you succeeded or failed).
By executing and completing these experiments, you are continually refining and defining your product and target market. Through the experiments, you might find out that no one will buy your product, or that a completely overlooked demographic is actually your target market. In the long run, testing small aspects of your idea will save you time and money because you will be forced to focus on the product that will sell and not on superfluous
aspects of your business that do not contribute to your bottom line.
aspects of your business that do not contribute to your bottom line.
While “The Lean Startup” is written specifically for tech startups, the principles can be and must be applied to small start-up business and social ventures. Here are some examples on how applying the lean start-up principles might look in a small business.
Business idea: Car mechanic Hypothesis: People want a car mechanic in a convenient
location.
location.
Experiment: Find a neighborhood that has to travel 5 miles to get to a car mechanic. Go door to door and offer to provide basic services at their residence.
Measurements: Get 30 percent of car-owning neighborhood residents to pay for services.
Why it works? You will be able to determine if a convenient location is a problem. You will start to build a customer base before making the capital investments into a building.
Business idea: Organization services
Hypothesis: People want to get organized because it makes them calm.
Experiment: In the same time frame, send out two sets of marketing materials. One that uses words and colors that reflect calm, peace, tranquility, etc., and the other that uses words and colors that represent efficiency, time-saving, productivity, etc.
Measurements: Record which marketing materials created the most interest.
Why it works? You will be able to see what motivates people to get organized and develop a customer-centric marketing strategy.
Using the lean startup principles can be intimidating and might be counter intuitive to traditional startup thinking. The fact is you can plan as much as you want but in reality business plans reflect the world that’s in your mind, and not the world that actually exists. To start a successful business from the beginning, you need to be in the trenches with your
potential customers.
potential customers.
Now time for my experiment: Are you interested in learning more about lean startup rinciples and how you can incorporate them into your startup or existing business or nonprofit? If you are, contact me at kmozian@chemeketa.edu or 503-399-5088 and let’s chat.
Kristen Mozian is a business advisor working with the MERIT Microenterprise Program at the Chemeketa Small Business Development Center, www.sbdc.chemeketa.edu.
Collaboration Can Boost Your Business
The word “collaboration” is used a lot these days. But
what’s the practical application of that word and concept for a business owner?
Turns out there’s a lot contained there that can help you with your business.
There’s a synergy to working with others that can mean great things for you, and
success for your business. Tap into the power of others and watch what
happens.
what’s the practical application of that word and concept for a business owner?
Turns out there’s a lot contained there that can help you with your business.
There’s a synergy to working with others that can mean great things for you, and
success for your business. Tap into the power of others and watch what
happens.
A common way to build a collaborative partnership is
when a for-profit business (a pet store for instance) teams up with a nonprofit
(the humane society). They have some common goals, they have a common
constituency, and they can mutually benefit each other.
when a for-profit business (a pet store for instance) teams up with a nonprofit
(the humane society). They have some common goals, they have a common
constituency, and they can mutually benefit each other.
Another pathway to collaboration is when a group of
businesses in a given industry (retailers, manufacturers, service providers,
etc.) or a group of similar businesses (specialty food producers, health
services providers, artisans, etc.) work together. Perhaps they host an event,
perhaps it’s a group marketing campaign, or a series of meetings where they get
together to share best practices and common concerns.
businesses in a given industry (retailers, manufacturers, service providers,
etc.) or a group of similar businesses (specialty food producers, health
services providers, artisans, etc.) work together. Perhaps they host an event,
perhaps it’s a group marketing campaign, or a series of meetings where they get
together to share best practices and common concerns.
There are several good reasons to enter into these
mutual arrangements. First is to promote your business to customers (with the
intention of driving sales). As a business owner, this is always on the top of
your mind, and a collaborative effort is another way for you to do achieve that
end. When you team up with other organizations you may gain access to their
customer lists, their ability to reach customers, their expertise, and many
other benefits.
mutual arrangements. First is to promote your business to customers (with the
intention of driving sales). As a business owner, this is always on the top of
your mind, and a collaborative effort is another way for you to do achieve that
end. When you team up with other organizations you may gain access to their
customer lists, their ability to reach customers, their expertise, and many
other benefits.
Another good reason is to generate publicity for
yourself and your collaborative partners. The more awareness and name
recognition you can create, the better. Cross-promotion helps everyone.
yourself and your collaborative partners. The more awareness and name
recognition you can create, the better. Cross-promotion helps everyone.
There are a couple of things to consider before
entering into a collaborative effort with others.
entering into a collaborative effort with others.
• Consider carefully who you align yourself with in
order to ensure compatibility of mission. Ask yourself who you want to be
associated with.
order to ensure compatibility of mission. Ask yourself who you want to be
associated with.
• Be sure to plan everything out in advance and put it
in writing. The more time spent up front, the smoother things will go.
in writing. The more time spent up front, the smoother things will go.
• Each partner’s responsibilities need to be spelled
out and agreed to.
out and agreed to.
• Reach a consensus on a common vision for what will be
accomplished and how each partner will benefit.
accomplished and how each partner will benefit.
• Speak well of each other in public; dirty laundry
needs to be kept strictly out of sight. Keep a professional tone, both when
speaking with, and when speaking to, your collaborators.
needs to be kept strictly out of sight. Keep a professional tone, both when
speaking with, and when speaking to, your collaborators.
Marcia Bagnall is Director of the Chemeketa Small
Business Development Center.
Business Development Center.
