Not only do you have a lot to learn on this journey (which is a big part of the fun for us EntrepreNerds). But, unfortunately most everything you thought you knew about business is probably wrong. The sooner you can realize that, the quicker you can harness your inner genius to aide your efforts.
Reflection Questions
In what ways do you need to pivot your business model to better serve the needs of your market?
In what ways are you making “smart business” decisions that do not serve your needs?
What is at the heart of your business model?
It may seem, in terms of business smarts that you get it. I learned quickly that, as a consultant, I needed to have a scalable business model if I were to expand my earning capacity beyond my time. So, obviously I needed to make quick work of scaling EntrepreNerds. I did a year long experiment in licensing the model that was doomed before it even started…Live and learn, what seemed like a business smart move was not the wise choice in the end!
I have since realized that before you can have a scalable business model you have to have a repeatable business model. And I thought just because I came up with a repeatable process, the EntrepreNerds framework and book discussions, that I had a repeatable business model. Turns out, that was not true.
Change How You Start a Business
Most people who start a business have a similar checklist in mind of the things that they need to do first. It usually goes something like this 1) Choose a name, 2) Get a logo 3) Make a website 4) Write a business plan…for whatever reason, most people feel like they cannot talk to anyone, especially not perspective customers until they have everything figured out.
The truth is that you will only figure it out by talking with your customers and it is a continuous process called Customer Discovery. These conversations with customers are not pitches though. You are not selling them on anything to start. In the beginning you just want to connect with them. Learn about them. Understand their perspective; what is important to them and why?
So, if we were to change how you start a business it would look more like this 1) Document your Business Model, 2) Conduct Customer Discovery Interviews, 3) Validate the Problem, Pivot or Fold.
Yes, it is that simple, only it is not that simple because there is an art to the Customer Discovery process. It is a scientific approach to starting a business that requires both quantitative and qualitative data. Like anything, learning how to test and validate your business model just takes practice, so you might as well get used to pivoting!
Document Your Assumptions
These are a lot of ideas to grapple with at once, and this is just the tip of the iceberg. How do you document all of these moving pieces of your business so that you can remain fluid in your thinking and open to possibilities?
I recommend using a one page planning document called the Business Model Canvas by Alexander Osterwalder. It’s simplicity makes it easy to update so that you have a living document instead of an expensive dust collector, i.e. a business plan. While it is a simple tool it is also rather comprehensive. There is a lot of deep thought and reflection you will engage in to document the initial ideas of your business model.
Customer Discovery Interviews
After you have documented some of your initial assumptions it is time to test them through Customer Discovery Interviews. Asking people “What do you think of my idea” does not actually validate that it is a good idea. Unfortunately, this is the most common question people ask when deciding whether or not to pursue an idea. We long for affirmation, any affirmation. It makes sense, you are putting yourself out there a lot in this journey. It is scary and you’re not sure what will happen. Positive affirmation helps you persevere. The problem is that you get a false positive feedback in this scenario.
No one is going to tell you that your idea sucks. In the off chance someone does tell you it is easy to write them off. And you don’t actually get any valuable insights. What about your idea is good and what about your idea is bad? How does your idea fit into the lives of your customers? What things may stop customers from buying your product or service?
Ultimately, you need to find out, what are the problems that your customers feel a need to solve? You need to validate the problem without asking people what they want. Steve Job’s was adamant when he stated that, “A lot of times, people don’t know what they want until you show it to them.” In essence, you need to validate that your idea will solve a problem without asking questions the way you normally would. So, what kinds of questions do you want to ask? A lot depends on the type of business model you have, and who your customers are.
If you have a B2C model and you are addressing a common problem. If it is easy to establish trust quickly. You may frame a direct line of inquiry to gain insights. For example, Rank these challenges about being an entrepreneur in order of importance for you to resolve? A) Feeling lonely or isolated, B) Access to capital, C) Marketing, D) Business Know-How E) Bringing in new team members, F) Other?
If you have a B2B model or you are addressing a more private issue, it will likely take time to establish trust and you may want to frame a more open line of inquiry. For example, I ask people, what is the hardest about being an entrepreneur? It is an open ended question that allows people to share what is on their top of mind, which is where a prominent problem one feels the need to resolve often resides.
What I love about the Customer Discovery Process is when you gain insights that strengthen your business model while building your tribe. It is a genius sales strategy. Instead of pushing your idea, and gunning for a sale. You are pulling them into your vision so that your customers become a part of building your dream.
Digging Deeper
Beyond practical, this book is an artistically presented, universally adaptable tool for successful business innovation. It might be the first book about business models that also looks fabulous on your coffee table. Osterwalder and co-creators teach readers a simplified method for collaborating around your business model. They also share exercises that help teams build a shared understanding of who they serve, where they’re going and what drives their business. If at first you find the design of the book bothersome, give it some time to soak in. It is sure to stimulate your creativity.
Comments