This is the third in a series of six posts that focus on showing you how to improve the prospects of successfully launching a business. Click here to view previous posts.
In my last post, ‘Are You the Fool at The Door?‘, you tested your business assumptions by running it through a sieve of close connections. Now it is time to turn up the heat. Our goal this week is to truly leave the guesswork behind.
For those of you familiar with technology development the term ‘beta testing’ is an old friend. The principal behind this stage is similar. Work with a small group of outside customers, but instead of determining if the product/service works as specified we want to discover what the market values.
The entire formula is comprised of just two parts, examine & express.
Study and be able to explain the value proposition from the consumer point of view.
We want to determine whether the problem you believe you are solving is in fact important, or better yet what is significant. Successful businesses are rooted in their ability to exploit observable behaviors.
For this you need to take on the diagnostic approach followed by the Mentalist’s (CSB television show) lead character Patrick Jane – astute observation. Introduce your service to a limited market of early adaptors and map their reaction.
And, if the evidence proves your intended value proposition wrong admit it. This is perhaps the most difficult step on the path to epiphany. It takes a significant amount of humility, effort, and willingness to scrap every belief when the results dictate doing so. In a society that views going backwards as a failure few of us can easily do this. But it is critical that it be done with integrity and honesty.
So exactly how is this done? By instilling a mind-set that rewards controlled experiments. Provide yourself the freedom to honestly see the marketplace and put forward your observations.
Get it in one sentence; X helps me Y by Z. You know that you’ve hit the core value when you can tell a first grader why people use your product or service and they get it. Here are a few examples:
- Google helps me understand something by getting me correct information fast.
- Wal-mart helps me spread my dollar farther by providing the best prices.
- Nike helps me play better by having clothes that keep me comfortable in hot weather.
The Bottom Line
It’s OK to screw up… if you learn from it. You’re on a journey of discovery.
What have you learned from your most recent misstep?
P.S. Want a clue as to where to look for real value? Most often it comes from:
- better processes (FedEx)
- better people
- better raw materials
- scarcity (diamonds)
Donald McMichacel teaches BE 261 Starting a Small Business.