Don’t Make These Mistakes – The Secret of Starting Your Own Business – HOT TOPICS INSIDER

Don’t Make These Mistakes – The Secret of Starting Your Own Business

This is the fifth 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.

Here it is:

Customer Development Model

What could be simpler?

In reality, doing the wrong thing. That’s because the right thing above requires a good level of dedication and focus to execute properly. Going into the specifics is well beyond the scope of this blog, that’s why the purpose of this post is to point you in the right direction of study and shine a light on the key concepts.

There are two books that you need to reference.

The first is ‘The Four Steps to the Epiphany’ by Steven Blank. Here is what I see as the key points:

  • Get out of the building. Qualify your hypotheses about what kind of product your customers (or potential customers) will ultimately buy.
  • Theory of market types. Different start-ups face wildly different challenges and time horizons; the key drives of which are if you are creating a new market, entering an existing market, or re-segmenting a market.
  • Find a market for the product as specified. Do everything possible to verify your belief. Don’t get caught up in a destructive (capital burning) cycle of including new features just because they were mentioned.
  • Phases of product and market growth. A four segment road-map that helps orient you as to what leadership should be doing as the company changes.
  • Iterate, return, or exit. Expose your guesses to the marketplace, refine based on feedback, and repeat. Don’t be afraid to pull the plug and asking if you’re in the right market.

The second book is ‘E-Myth’ by Michael Gerber. It is based on Gerber’s observation that most people launch their own business for the wrong reason. Being a skilled technician – they do a good job of what the business provides to the customer – they believe they can earn more by doing it in their own business. In short order they find that the role of the business owner is really quite different.

A business owner’s mission is to create an entity that works independently of himself or herself. And this is where Gerber’s work steps in. It focuses on helping you develop repeatable, teachable processes so that the concern isn’t as reliant on you being involved in every operational aspect.

Why heed this advice?

Recent research has indicated that some of the most successful start-ups did not follow the traditionally prescribed product-centric model. They intentionally, or not, utilized a game plan that was centered on institutionalizing customer learning and discovery.

Donald McMichacel teaches BE 261 Starting a Small Business.