Many first time entrepreneurs believe new venture creation starts with creating a Minimum Viable Product. That’s a common misconception! There are many steps you should take to know that you are starting a venture for the right reasons, and many frameworks to learn that will help you get started and make progress.
In this module, we will cover two sets of concepts:
- Getting started: Why we should always start with “why”; ideating and selecting a market problem worth solving; and basic considerations in building and running a high performing founding team.
- Common frameworks: You will learn about the mainstream frameworks that the startup community typically uses to help guide their progress to iterate their way to a financially sustainable new venture.
Start with why: what are you passionate about?
Starting a new venture is not easy. The odds are not in your favor: 90% of all startups fail. It takes years of hard work and grit. Colin Angle, cofounder and CEO of iRobot and the leader behind the 14 failed business models of iRobot, used to say:”iRobot is a 13 year overnight success”. This is why the first thing an aspiring founder should think about is not the product they should build (which a naive interpretation of Lean Startup might indicate) – but to answer this question: “why should I go into business?” What is it that you HAVE to do no matter what it takes? Look deep inside to see what you really care about.
In this section we will provide you with a few resources to help you find your own “why”. Enjoy.
Choosing market problems worth solving
First time entrepreneurs frequently make the rookie mistake of building a solution before validating the problem. But how do we go from our “why” – which often involves broad social causes one believes in (such as “climate justice”), or passion about using technology to improve things (such as “using technology to help people improve their health and fitness”) to something specific and actionable?
In this section, we will provide some resources to help guide your process to narrow down the playing field and put structure around your problem statement.
Sean Harper has a great 2018 article published on Forbes.com about how to identify problems worth solving in the startup context.
Bill Aulet, author of "Disciplined Entrepreneurship" and the "Disciplined Entrepreneurship Workbook", provides free access to a workbook chapter about how to find an idea to start with via either a market-pull pathway or a technology-push pathway.
Marius Ursache, a serial entrepreneur who maintains the d-eship.com site, has created a Problem Statement Canvas to help entrepreneurs define their venture's problem statement in a structured mannner.
Building and running a great cofounding team
Did you know that team problems are the #3 reasons why startups fail (right behind “No market need” and “Ran out of cash”)? Building a great team is key. It starts with understanding yourself: How do you form habits and adhere to goals? What is your work style? Then look at whether you have diversity of thought and experiences in your team. Then you can develop collaboration norms and processes that helps you become a high performing team.
Following are some resources to help you work through the following questions about building and running a cofounding team.
Take this working styles assessment to understand how you like to work - and look at how your teammates like to work, then co-create team processes based on who's in the team.
Sergio Pereira has a great 2018 article on the "hacker, hipster, hustler" model of building a well rounded cofounding team on Hackernoon.
Contrary to common misconception, design thinking is not just about design or product development, although that is where the concept came from. Originally developed at the Stanford d.school and brought into the mainstream by the product design firm IDEO, Design Thinking is a framework that encourages us to solve problems by building empathy with the user / customer to understand their needs, wants and expectations. This helps us define the problem and rapidly prototype and test solutions. This human-centric approach is universally applicable whether you are creating a product, service or user experience. Note that it is a solution-centric framework that does not typically include business/financial considerations.
The five stages of Design Thinking are:
Two additional frameworks that are closely related to design thinking are “user centered design” and “jobs to be done”. Read more below.
The Lean Startup is a canonical framework that all entrepreneurs need to know. It was created by Eric Ries in his book “The Lean Startup” which is now a classic. According to his website, the Lean Startup ” provides a scientific approach to creating and managing startups and get a desired product to customers’ hands faster. The Lean Startup method teaches you 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.” Lean Startup helps entrepreneurs avoid perfectionism and analysis paralysis and provides a structured way to test and iterate your way to product-market fit.
There are several extremely important concepts in Lean Startup that are core to entrepreneurial success. Read more below.
- Build-Measure-Learn: An iterative process where we build something quickly, test it with real people, learn what works and doesn’t work, then rinse and repeat.
- Minimum Viable Product (MVP): Defined as the smallest possible thing one can build to complete a build-measure-learn loop.
- Five Why’s: Adopting a root cause analysis methodology from lean manufacturing to get to the bottom of any problem.
Business Model Canvas & Lean Canvas
The Business Model Canvas (BMC) is a strategic tool for venture builders to develop new business models or document old ones. It was introduced by Alexander Osterwalder in his seminal book, “Business Model Creation“. It offers a one-page view including 9 building blocks that entrepreneurs need to think about. There are many variants of the BMC including the Lean Canvas, the Mission Model Canvas and more.
The Disciplined Entrepreneurship (DE) framework was introduced by Professor Bill Aulet of MIT in his book, “Disciplined Entrepreneurship: 24 Steps to a successful startup” and subsequently elaborated on with his second book, the “Disciplined Entrepreneurship Workbook”. It iprovides a step-by-step guide to key steps in new venture creation.
The framework divides up the 24 steps into 6 themes and is well aligned with the user-centered approach of Design Thinking, the experimental approach of Lean Startup, and the holistic, full-business approach of the Business Model Canvas.
- Who is the customer?
- What can you do for the customer?
- How does the customer acquire your product?
- How do you make money off your product?
- How do you design and build your product?
- How do you scale your business?