When you start a business, you take a giant leap into the unknown. Some of the questions you will be asking include whether there is a market for what you want to offer, how much are people willing to pay, what technology is required.
It’s a thankless task – one thing you can be sure of is that most of how you think you know about the market, technology and your business will be incorrect. Worrying isn’t it?
As someone who has been through this process, what tips would I pass on to budding entrepreneurs starting their adventure into start-up land?
My advice falls neatly into A, B and C. It’s not based on a 2×2 Business School matrix or consultancy jargon, but it’s what I think is important.
I think that the important things are: assume nothing, believe only what you know to be true and challenge everything.
One of the biggest mistakes you can make is think at the outset that you understand the market, and know precisely what customers want. This will not be true. Assume nothing – start by asking yourself the key questions what, how, where, when and why. Keep on asking these questions until you get down to what’s really going on. Don’t rely on Google – get off your backside and ask those people already consuming and providing the service or product in the market you are focusing on.
My best advise is to build a set a business assumptions – which taken together become part of your hypothesis of how your business will work. Be prepared for this to take weeks – no shortcuts.
The lean start-up fraternity use terminology such as customer and market hypotheses, which lead to the development of a Minimum Viable Product – something that people will want to buy.
Believe only what you know to be true
Be careful not to take what people tell you as true. Sometimes they are plain wrong, or have hidden agendas. Google can be a nightmare in this respect – just because someone says it’s true, don’t take it as gospel.
My best advise is to triangulate information. If three unrelated parties come to the same conclusion, then the chances are they may be correct. Only when you have your own data can you come to an informed decision on the validity of the data.
You are constructing a neat model (spreadsheets come into their own here) of how you see your business idea operate and make money. The most important thing is to continually check each assumption in the model. This challenge process needs to be evidence based: quantitive (from your website and Google Analytics) and qualitative (via verbatim feedback).
Follow these tips and you will stand a fighting chance of getting your business off the ground. Don’t follow them, and you need to hope that you are one of the very few businesses that get it right first time.
If you take my advice, don’t leave it to chance, remember to run through the A, B, C for your start-up.