I am personally loving this Series on Start-ups because besides sharing with you the little I got, it is rolling simultaneously with an idea that I am implementing. I feel that Start-ups require people of thick skins and undying spirits. It is not enough to just be in love with the notion of self-employment as this demands you to be ready to fight, fall and fight another day. I also feel we can access ourselves and check if deep down we have got the heart for Start-ups. It is not expected that you have it all, knowledge is acquired and communicable. I have two objectives for this piece; to introduce you to Start-up actions and to Start-up principles.
Actually there is nothing new here but we can never overemphasize the fact that entrepreneurship and startup is all about identifying a need or problem in the society and meeting it. There are two ways to go about it; meet it profitably or become a donor. However, the latter is an outdated model in this era of sustainability and eradication of poverty. Let’s concentrate on the former; meeting the problem or need profitably. An entrepreneur is a bi-dimensional player as he meets a need in the society and gains by profits made. A start-up founder takes a multi-dimensional edge, he or she meets a need, makes a profit, generates revenue for a larger group of people and also grows to become immortal.
A good example is Uber. The founder created a taxi operating system that is used throughout the world. He automated it to run as a mobile computer device application where a customer requests for a cab via the app. The app shows the number of drivers available in the same geographical region and selects one who is available. The driver makes a phone call and connects to the customer. As if that is not innovative enough, the application calculates mileage under kilometers covered, time spent on trip and base fare. Comparing this business with normal taxi business, the Uber wins the day. It is incredibly cheap while being tremendously efficient. The driver is assured of making sales regardless of being new. It also offers a chance for any city citizens to become entrepreneurs in their own way. To the company, each Uber trip worldwide gains them revenue. Startups are easy to run as they are capable of running autonomously or in applications and websites.
Then someone may ask, “If they are so easy to run, why are there a limited number of successful startups?” This article is all about starting up but before we embark on the intricate details allow me to answer this question briefly.
Startups demand more than capital and a brilliant idea. It is a process but all we want is up and running companies in less than a year. Existing startups took over three years to have a conclusive system of operation.
The Startup Actions
- Problem and Solution Interview
Before investing time and resources in a start-up venture, take time to interview the problem. What is the need in the society and how are people striving to meet it? Is the problem worth solving in the first place? How does the problem relate to you? Maybe the society lacks proper education, does it spark an insatiable need to solve it? How long is the problem going to persist? What changes might occur within the next one decade and how will you adjust to it?
Secondly, interview the solution in mind. Is the solution affordable? If not, what can you do to scale it down to the society’s level? What impact does the solution achieve? How will it fit into the people’s livelihood? What do you need to build the solution? How long will it last?
- Minimum Viable Product
With regard to the answers you got from the problem and solution interview, proceed to analyze the MVP you are testing. A Minimum Viable Product is a product with just enough features to satisfy early customers while providing feedback for future products. It means that it is way cheaper than the product with more features.
- Design Principles
Most ventures start up as uncertain ideas. There is so much ambiguity surrounding an idea even after doing the problem and solution interviews and MVP analysis. Most entrepreneurs rush to produce a product that is nice to have for large numbers of people. This means they blow up all the benefits of being a startup plus resources. It is like proceeding straight to the main course then getting stuffed up half way because you did not prepare your stomach aptly.
With a proper design, a start-up utilizes a tool box of biases and heuristics to adopt a modus operandi. A keenly designed principle allows for affordable loss and a small pool of early adopters who feel that the product is a must-have.
The Start-up Principles
I am employing this model of start-up; it gives me more freedom while giving me enough evidence to reduce the downside of decision bias. Next article I will be covering more principles of start-ups. It is good to have a mash-up of several principles to achieve more success.
One traits that common in all is the ability to make decisions under uncertainty.
The Principle of Lean Start-up.
Let’s create a mental image. You are sleepless one night-say 3 a.m. and lately you have been thinking a lot about starting up something. So at that hour of clarity, ideas flow and the next morning you have to make a decision. You have a job or are jobless or you have just finished campus or you are in mediocre business. The first thing you do is to make a decision; for being human you give yourself a grace period of six months before forwarding the resignation letter. Six months sail by and before you realize it, you are out of employment or whatever. All you have is an idea, a laptop and very little savings not worth mentioning. The lean start-up is your go to start up principle.
Here are three features of it that are so relatable at that point;
- You have limited resources and tremendous uncertainty hahaha.
- You can adopt more flexible ventures at a lower cost.
- You have got tons of implicit assumptions which you are raring to make work.
Here are six action points to tick as you master.
- Find a problem in your area and define a solution. Coin your solution to fit the problem as the problem is more rigid.
- Engage early adopters for market validation. Early adopters are the users.
- Continually test your solution with smaller but faster iterations.
- Proceed to build a function and use it to measure customer response.
- Make evidence –based decisions on where to pivot in order to change the plan’s course.
- Maximize efforts for speed, learning and focus.
Next we will be looking at the other six Start-up Principles and touching briefly on the traits of a start-up founder.