How To Create A Lean Startup
How can entrepreneurs make their financial obligations, keep the economy going and thrive, overall? How can they launch lean startups and work towards guaranteed success?
During the session, “Startup Fundamentals from Idea to Launch.” at the Project Entrepreneur Summit LA: in November 2016, Deldelp Medina Director of Residency at Code2040 and Aisha Lewis Director of Partnerships at American Underground, weighed in.
Entrepreneurship is down. New business creation in the U.S. is at nearly a 40-year low. Only 452,835 firms were born in 2014, according to the most recent U.S. Census data released in the past week. That’s well below the 500,000 to 600,000 new companies that were started in the U.S. every year from the late 1970s to the mid- 2000s.
The Lean Startup method provides a scientific approach to creating and managing startups and get a desired product to customers’ hands faster. It teaches entrepreneurs how to drive a startup, how to steer when to turn, and when to persevere-and grow a business with maximum acceleration. It is a principled approach to new product development. It is about sparking passive interest in an individual to making them a customer to, ideally, getting them to become an evangelist?
The following questions should be considered:
- What are you doing?
- How many people have actually paid for it?
- Is the product I’m which is being built a want or a need?
Too many startups begin with an idea for a product that they think people want. They then spend months, sometimes years, perfecting that product without ever showing the product, even in a very rudimentary form, to the prospective customer. When they fail to reach broad uptake from customers, it is often because they never spoke to prospective customers and determined whether or not the product was interesting. When customers ultimately communicate, through their indifference, that they don’t care about the idea, the startup fails.
So, how can entrepreneurs avoid this?
- Think as social scientists do: The most successful entrepreneurs it into discover not only what a customer wants but also how they will interact, your product and pay for it. validate what you have? And so that’s what I would ask all of you. Who is your target customer? What is it about them that interests you? And where can you find them? And how much do you think they’re willing to pay? Ask yourself those questions and have an answer for them.
- Create validation via personas: Entrepreneurs should have as many experiences as possible with potential customers: their target personas. Only if you can think like, feel like, and behave like your audience, will you be able to communicate with them effectively. Consider the who, what, where, how, how much will your target customer pay. How many of those these individuals can you interact with and are they willing to put money down? You can go as deep or as topline as you wish when building personas. Ultimately, the goal is to get the answer to how are you going to build your minimal, viable product.
- Start small and be patient with yourself: Too often entrepreneurs believe they must react on all of the feedback from individuals. It might be as simple as starting a small community around what you are building and getting enough financial investment to keep you afloat. The current climate calls for entrepreneurs to prove a product works and clients want it before investors contribute.
- Consider the customer (not the investor) as your priority: Why do you want investment money – this bucks the traditional thinking. The narrative is built, gain capital and build bigger. When you are looking at how you want to build your company, consider the customer first and then think of the investor. Your validation should come from your customers which will make your product even more valuable.
“Every experience you have is not wasted. It just isn’t,” says Medina. “As long as you think that you’re in a learning mode, as long as you’re open to learning and listening to people, then the better off you are, the more experiences you have, and in a short period of time (if you can condense all of that and you can really get things going) that’s when you’ll be able to find that sweet spot and actually build something where people are already are.”
Learn more from Deldelp Medina and Aisha Lewis on episode 25 of our podcast, #theTools, “How to Take Your Business From Idea To Launch.” and be sure to subscribe.