Proceed, Pivot or Kill!
So, you’ve got an idea for an exciting new startup, you’re building your MVP and have no doubt it’s going to create traction and make a real buzz as soon as it’s launched — Congratulations!
Are you ready for a reality check?
Yes — I’d like to know if I’m wasting my critical time, energy, and money on this idea.
No — I’m sure of my startup idea, I’ve got the resilience and ability to keep going!
This blog gives you the tools and resources you need to avoid the pitfalls early-stage founders so often make — when we care so deeply about an idea or have a powerful vision for something our emotions can blind us to reality, leading us to take ill-informed decisions and miss out on observations and act on opportunities that can create real value for our end-users.
Inspired by our monthly #VineConversations series led by Mirav Vyas — Co-founder of Rize — a platform that expands the network companies can tap into for hiring, by empowering employees to be Talent Scouts — Mirav shares his own tools, lean startup methodology, and best pieces of advice to help startup founders speed up and de-risk their innovation activities.
Bluntly put, applying the tools and decision frameworks in this blog will help you to look objectively at your startup, experiment rapidly and not get stuck: saving you critical time, energy, and money!
Three simple questions
Throughout the process you should be asking yourself:
- Is there demand? (What value are you giving to your customers)
- Is it worth it? (Is there a viable market)
- Can we do it? (Are the skills, knowledge, and resources in place to execute).
Fail before you succeed
Thomas Edison created 10,000 failed prototypes of his electric bulb before succeeding. His reaction? “I have not failed. I’ve just found 10,000 ways that won’t work.”
This is a common trait of most successful people — as Mirav described: “the most successful entrepreneurs I have met have gone through a number of failed startups first”
Mirav has gone through three failed startup attempts: the first — an app that was built the wrong way: “I had built every feature first”, the second — a tool for B2B lead generation that was hatched within a corporate incubator and the third was a B2B concept that just couldn’t get the right metrics and after much time, energy and resources spent came to the conclusion it just wasn’t working. Today, he’s taking those lessons and applying them to his startup Rize — where together with his co-founder, they’re iterating fast.
So what should you focus on in the early stage?
- The problem,
- Minimum viable segments
- Hypotheses prioritisation
- Lightspeed experimentation.
Know your problem before your solution
Einstein said: “If I had an hour to solve a problem, I’d spend 55 mins thinking about the problem and five on finding the solution.”
The best advice Mirav received was from his mentor who asked Mirav about the problem his startup was solving. Mirav spoke for 3 minutes, and his mentor turned around and said: ‘Mirav, you do not know your problem — top tier founders can talk to you about their problem until they go blue in the face.’
So here’s a challenge for you: Record yourself talking about your problem for at least 15 minutes. How well do you truly know it? Do you have co-founders? Do this activity separately and you might uncover new insights about how you view the problem differently.
Identifying your minimum viable segments
In an ideal world, we are presented with a problem — our startup has the solution, we launch said startup within 6 weeks and it gains traction. However, you came here for a reality check — for most founders, it can take 6 months, several feedback loops, and iterations before seeing monetisation growth and market fit.
We’ve talked about knowing your problem and the next step is knowing what your venture helps your customers (or minimum viable segments) get done, a good framework to use is jobs to be done.
Understanding who your startup is for and how to get access to them is the first step — go and find 100 people that love your solution for a sustained amount of time — try to be absurdly narrow about who to start with and then look at their traits and habits. Never stop listening to your end-users — they are the lifeblood of decision making.
Then you ask yourself the question: Are the problems we think the most important based on what we’ve learned from our end-users?
Resource: The Mom Test: How to talk to customers & learn if your business is a good idea when everyone is lying to you is a book that can help you look for behaviours and act on evidence.
Take your learnings after speaking to your minimum viable segment and write your hypotheses about ideas to solve their problems and prioritise based on their impact on your venture:
Time is Critical. Optimise for Speed.
After identifying your most critical hypotheses to test, the next goal is to run rapid experiments to prove or disprove them.
Sometimes you must make decisions on little evidence and gut feel, Mirav shares his approach — a ‘Burden of Proof’ Trello board that helps him and his co-founder focus on each experiment which has a measurement and success criteria, as well as time limit — this structure helps the team be super strict on the experiment and timing.
Now it’s time to assess where you are at against the scorecard, are you believing your own hype or are you seeing the evidence?
The scorecard takes us back to the three questions at the start: Is there demand? Is it worth it? Can we do it? A shout out to the Lean Start-up Consulting team at Deloitte where Mirav learned this framework.
The scorecard will help you answer questions like
- Is the problem compelling enough that people talk passionately about it?
- Is it worth it — what is the market size and competition?
- And is it technically feasible, does it align to where we want to go?
Tip: This 5-minute video by DREAMIT ventures helps you to avoid pitfalls and calculate your startups Total Addressable Market (TAM) the right way.
The Decision Framework
Now after identifying your minimum viable segments, hypothesis prioritisation and running rapid experiments to help you complete your scorecard, it’s time to move to the decision framework:
Did you manage to turn all statements green? Move onto MVP iteration — if you’ve yet to launch something, write down what you could launch within a month: Remember to think big and start small… YouTube started out as a dating website!
If there were some oranges in your scorecard, consider what it will take to move them into greens. Are there salvageable elements of your value proposition? If yes consider a pivot, if no consider killing the idea.
Your willingness to continue, as well as your ability to continue, are deciding factors within the framework. Deciding to quit can be the hardest decision an entrepreneur can make, but if there’s still a will — think about how to get to the solution point and problem-solution fit in the leanest way possible.