Have you ever heard of the Lean Startup Model? Go ahead and read all about the model.
The lean model is basically this:
Idea —> Build —> Measure —> Learn —> Iterate
- Generate an Idea
- Build a prototype (quickly)
- Test your hypothesis (make sure you can measure it)
- Learn from the test
- Then develop those learning points into your next iteration OR change your idea slightly/completely (called a pivot)
One of the main things we love about this method is that it helps you avoid spending months and months building something that isn't tested. Your goal should be to get into the market and test, then create your product around what your paying customers need.
The key here is: “Would you pay $XYZ per month if I could solve this problem for you?” Then show your potential customer what you’re working on. Listen to them. See if the need is really valid or not.
If they’re excited about it, stay in touch with them and get their commitment to buy from you when you solve their problem.
We get a lot of requests every week from African entrepreneurs who have brilliant ideas. The majority of these ideas are untested. For us to get involved (or for any future partner, investor, supplier), we need to see traction on the ground.
- Have you tested a hypothesis and had it validated?
- Are you beginning to onboard customers quickly?
- Are revenues flowing in?
- Do you have any partnerships lined up?
- Can you show specific traction online (orders, likes, shares)?
Even if these results are small scale, but you can prove the track record is strong and the sales are growing, then those are all positive things.
And please focus.
Pick a piece of the business you're going to own and dominate, then showcase that on a micro level and begin to test and scale it out systematically.
Investors love to see those systems and those thought processes laid out.
Here’s a quick example with easy math:
We tested our idea and now have 100 paying customers monthly, which equals $1,000 in gross profits. We know that it costs us $1.25 in FB ads to generate a new inquiry, and then an additional $1.75 to follow-up and close the sale. Our average customer is staying with us minimum 9 months…
That type of explanation, with the lean model (testing everything and learning from it) will put you on a road to success in your business.
(photo via david hamann)
Posted on June 29, 2017
by Tim & Tommy filed under