Over 80% of startups fail and the primary reason given is that there wasn’t a market need for their product/solution. So what can you do to see the race to its end? To Be or Not to Be. That’s the question.
Often (first-time) entrepreneurs feel that step 1 involves writing a business plan/building a slide deck and getting funded, rather than actually investigating whether the product or service they are building is one that consumers want!
Hindsight is a great thing as the saying goes. But, what if we could skip the wait for the benefit of hindsight and guide our entrepreneurial journey with useful insights? Lean Startup, customer development and business model innovation are transforming the way in which new products and businesses are built and how growth strategies are developed.
In my ‘Entrepreneurs Create Jobs – Can We Help Them Increase Their Chance Of Success?’ post, I spoke about my belief that entrepreneurs are driving the strong recovery and growth in Ireland over the past few years. But looking at the failure rate mentioned above, it is imperative that we support our entrepreneurs, and help them to create profitable and sustainable businesses that will in turn support and strengthen our economy. This is why I was delighted to be invited to give a keynote on Lean Startup to a group of particiapnts on the Enterprise Ireland ‘s New Frontiers Entrepreneur Development Programme.
New Frontiers is a great national initiative run by Enterprise Ireland, designed to help and support up-and-coming entrepreneurs accelerate the development of their sustainable new businesses, or business ideas. The programme offers early-stage entrepreneurs a unique opportunity to avail of a high calibre of training and mentoring through Enterprise Ireland and the Institutes of Technology, to network with the right people, to benefit from peer learning and to access practical and invaluable resources (such as scholarships and office space).
My keynote was aimed at the Phase 2 participants who are in the process of validating their business proposition and identifying their customers. The talk, entitled ‘In Hindsight’ was centred on the key lessons I have learned during my journey as an entrepreneur, and the value that Lean Startup methodology would have brought to me at that time.
The key message in the Lean approach is that organisations must design and build products that customers want.
To briefly explain the concept of Lean, it is essentially about eliminating waste (achieving efficiency), and was an idea originally developed by Eiji Toyoda and Taiichi Ohno at Toyota (known as the ‘Toyota Way’). Customer Development is a term that was popularised by Steve Blank in his book ‘The Four Steps to Epiphany’, and takes a customer-centric approach to understanding customer needs and problems. Alex Osterwalder, in his book ‘The Business Model Generation’, describes a business model as how an organisation creates, delivers and captures value. The Osterwalder business model canvas is a great tool for a startup to validate their assumptions. Think of the canvas as a set of hypotheses (guesses). It will help to organise your thinking. The real task is to change these guesses into FACTS.
Entrepreneurs must first identify a problem/need before setting off to validate a solution. Then they must establish that there is a market need out there for it. It is not a ‘nice to have’ but a ‘must have’.
Thank you to Enterprise Ireland for organising a great networking event for the New Frontiers entrepreneurs and giving me an opportunity to talk about Lean Startup!
You can view the slides from this talk below. I have added a few extra slides to the appendix which were in response to the Q&A session that followed my talk.