10 Easy Steps to Start a Startup Business

Step 1- Prepare the stage

Before starting the project for searching a viable business idea, resources must be ready and sponsor of the project must be committed and dedicated to achieve untapped values. Team is considered as the most essential resource to deliver a project successfully. There is no specific requirements for a team to be successful except being committed and passionate. Team number and speciality is varied from two members to as many as possible with the necessary competencies relevant to the field of the digging business. A founding team can be consisting of, team leader (entrepreneur), finance expert, marketing expert, customer expert, tech. expert and design expert. Another resource is time, which is considered valueless to identify and trace success. Another set of rules, are those related to applied tools and approaches to deliver the business project. The leader and team should be sharing a common-ground rules as for the applied rules to discover business-sound ideas and time allocated for the project. The current common practices for developing a business concept are those derived from the lean methodology, which is based on principles such as, value streams, flow of values, pull of values, efficiency, innovation and validated learning.   

Step 2- Identify a pressing challenge

Big opportunities are based on pressing challenges. Challenges are mainly determined by customers who are doing certain jobs and facing pains. Challenges are difficulties or obstacles facing people or businesses to perform a job and can be discovered through different ways such as, customer mapping. Challenges can be determined through a powerful observation of how key jobs (could be professional, social and emotional) are being done. If a challenge is a pressing one (in the sense that it needs a quick and urgent fixing) and facing a larger group of customers (worths investigation), then it is worth looking at and digging more. While customers doing their daily jobs such as commuting, socializing, communicating, eating are usually facing different levels of pains or challenges and thus they are desiring expected and unexpected gains. Those gains for certain jobs are enabling customers, who perform jobs, to perform jobs easily, with less time and cheaper. Customer’s desires or gains are those related to expected benefits of acquiring a product, such as a built-in camera in a mobile phone and unexpected benefits such as, mobile touch during conventional fixed telephone sets. The most powerful challenge is a disruptive one, which leads into a new product, new customers, low price and new ways of doing jobs. An example for the disruptive challenges or ideas are, the invention of internet, android mobiles, WhatsApp, Twitters, Facebook, electric cars and many other inventions. A pressing challenge is the one that is proven to be affecting a large group of people and people are looking into a quick and attainable solution for it. Furthermore, a pressing challenge will lead into a compelling product that a group of customers desperately want to acquire. A challenge after a deep investigation may turn out to be a problem and lead into an opportunity. A problem must be tested with a group of target customers or stakeholders to evidence acceptance. Testing a problem goes through stages of deciding on a problem, interviewing potential customers (i.e. 5-10 customers) and analyzing answers. If your defined problem is confirmed acceptance by a large group of customers, then this problem is worth further investigation and looking for a solution. Finally, a problem must be clearly defined in terms of scope, target customers and level of compelling.

Step 3- Set goal and a map of challenge

After deciding on a pressing challenge or problem, a team will agree to a long-term goal on how to fix this problem and succeed. This is an interactive processes between team members and leads into raising questions to be solved and what has to be true to solve the long-term goal. Team will ask questions on the critical causes of identified problem and ideas for solutions. It is recommended that team’s discussed notes and comments are listed in a whiteboard to enable creative thinking, team working and inspiring solution ideas. One of the successful practices for diagnosing the workflow and identifying the challenges are those related to developing a map of the challenge, which shows the actors (i.e customers), a flow of works and end result. A map of challenge can be drawn through listing the actors (main players or stakeholders including customers, suppliers, producers)  in the left side and the end result at the right side. Between these two sides, the list of actions and arrows will be written. The map of challenge will illustrate the challenging subject and how to ease bottlenecks and achieve the set goal. It is advisable to list the map of challenge at the whiteboard. It is simple and creative thinking to solving the challenge. Entrepreneurs are encouraged to seek assistance from experts and share what they know about the challenge and solution ideas. Then, team will be listing their notes and findings on the whiteboard for further team discussion. These notes will be used to edit the questions (problem-solving ideas), edit the map and source of solution ideas. These notes are organized into grouping, subject to priority listing and voting basis. The map of challenge will be re-edited according to the expert-brainstorming notes and discussion. Team will also pick up a target (a customer and a critical factors on customer’s experience). Finally, the team will redefine the problem, solution ideas, and updated map of challenge.

Step 4- Sketch a solution

The outcomes of step 3 above will be used as source of information to define the problem and exploring notes on solution ideas. The best way to discover a unique solution to a pressing problem is the one that encourages brainstorming and critical thinking. To sketch a solution, I introduce the SPRINT’s method, which goes through 4-step processes: notes (gather key information on the problem and critical causes), ideas (develop rough solutions), crazy 8s ( sketch ideas in 8 crazy sketches in one page) and solution (sketch one solution). It is an interactive approach that enables team members to think and propose his/her solution ideas. A solution idea will be sketched using a simple drawing and text explaining the solution idea. A sketch practice is based on the factual principle that a good idea is usually easy to be sketched and illustrated. Every team member will be given the time to present his/her solution and answer questions . All members’ solutions will be then listing on the whiteboard and subject to team’s final decision on the best solution sketch. Finally, one solution sketch will be chosen based on voting basis or evaluation criteria.

Step 5- Prototype a solution

A solution idea will be then expanded and reproduced as a storyboard. This is the way how to prototype a solution using the SPRINT approach. A storyboard describes the potential customer’s experience story using the solution product. A storyboard will describe details of the prospective solution including, functions, benefits and unique value propositions. A storyboard will be used to build the solution’s prototype for testing. To develop a storyboard, It begins with an opening scene (i.e. web search, store shelf, apple store, new article on your product, social media coverages,..etc); then navigating the product or service with brief description on each step; then writing enough details so that customers will not need to ask for assistance. Once it is done, the team must approve it. You try to make the storyboard as, easy to be read and understood by customers and enable product’s prototyping and testing. The advantage for a prototype is to enable testing of a solution using limited resources like time, effort and money. Further, it will enable changing assumptions and rebuilding of a prototype with limited resources too. Developing a prototype requires an entrepreneur to change a mindset and philosophy on developing a prototype, as from perfect to just enough and from long-term quality to a temporary simulation. An entrepreneur must believe on the prototyping facts such as, he can prototype anything, prototype is disposable, build just enough to experiment and learn and it must appear real. To develop the right prototype, an entrepreneur must do two important things, which are first developing a prototype that is well illustrating the prospective solution and second picking up the right tool for delivering the prototype. The prototyping tools are varied and such as, Keynotes, PowerPoint presentation, specialized software for prototype making, using website and mobile, a manufacturing sample, paper prototype, 3D printing, brochure, landing sheet at a website, video. Keynote is always the perfect tool to develop a prototype. Developing  a prototype of a solution consists of making the individual components, stitching them together; inserting the right texts; include images, videos, links, icons, sample content, etc; stitch then all together; and make it as a fake real and run a trial.

Step 6- Test a solution

Testing a solution is an art and encompassing of planning for interview, interviewing potential customers (evangelists) and learn by watching them react to prototype and analyzing results. Questions and the prototype should be prepared before interviewing the customers. Researches have shown that tests are run for 5 interviews as minimum and 85% of results are discovered during the first 5 interviews. Results are analyzed and prototype is modified accordingly. A criteria for accepting or rejecting assumptions should be prepared before interviews begin. It is recommended to run a one-to-one interview with customers instead of conducting virtual interviews with customers. Testing interview goes through friendly welcoming, open questions about the customers, introduction to prototype solution, detail tasks of prototype and watching customer’s reactions (or and answering questions) and debriefing. Interview is recommended for a video recording to enable the rest of team monitoring testing and later on analyzing. If an interview is lively broadcasted, the team will watch the video live and writes their comments on stickers. Then SPRINT’s approach recommends listing team’s comments for each interviewed customer, followed with a team evaluation and note taking. Team may also watch the video some other times and take notes. Then, team will evaluate the testing outcomes and decide on the solution prototype whether to modify or accept and move forward.

Step 7- Develop MVP

Based on the testing of solution, the product’s specifications will be finalized and a sample product will be made. The Minimum Viable Product MVP is the smallest version of a product that can be developed for testing the product offering and product-market fit. The MVP can be a tested prototype or a physical product. Whatever the level of developing the MVP, the MVP must be arranged to test the product’s specifications, benefits, value propositions, commercial offering and its market fit.  

Step 8- Test product-market fit

It is about testing a product and its commercial offering whether they are accepted and will be bought by potential customers or not and why. It aims at verifying customer validity, understanding of sales processes, prove repeated sales, prove salability of the product, workable distribution channels and profitable business model. In summary, it is about proving the sales roadmap of your business. It encompasses phases as, to get ready to sell (arrange a sale plan), sell to visionary customers (execute the sale plan and evidencing validity), develop a market positioning for the company and product ( it is the process of comparing your product with the competitor’s ones and develop the unique value propositions) and verify findings (decide on the assumptions for the product and offering based on the results of product-market fit).

Step 9- Develop a strategy

It is about building and testing a business model for a business. A business model is showing ways how to develop, deliver and capture values. The aim of developing and validating a business model is to take the business to next level for business creating and accelerating. A business model is built on the structure of resources (tangible and intangible assets to run a business), transactions (activities necessary to create, deliver and capture a value) and value creation (uniques value propositions). Applied business model depends on the level of a startup progress. For the pre-venture stage, it is not advised for applying a complexed business model; where, a lot of information is missing. Instead, it will be advisable to apply the business model with its basic structure covering the key resources, transactions and value creation. For the startup stage, where is at the stage of developing a product and testing the product-market fit, it is advisable for applying the business model developed by Ash Muraya, encompassing the problem, solution, key metric for testing problem-solution, customer segments, channels unfair advantages, unique value proposition, cost structures and revenue streams. For a startup looking for a growth, it is advisable to apply the business model developed by Alexander Osterwalder, encompassing the customer segments, value propositions, channels, customer relationships, revenue streams, partnership, activities, resources and cost structure. A business model will be produced with assumptions for the key components and then subject for testing through interviewing customers and analyzing results. A business model will have no value if it is not tested at market, proven viability and scalability. A business model will be designed and be visible for the stakeholders, such as customers, investors and employees, to help communicating and testing the business model.

Step 10- Develop customers

Steve Blank in his book ‘The Four Steps To The Epiphany’, has argued the difference between the product model and the customer model. He argued that the product model is not a suitable model to build a successful business, due to the reasons that it doesn’t take in consideration the customer development, focuses on the first customer ship date and emphasizes on execution instead of learning and discovering. For those reasons and others, he believes that the product model won’t lead into a workable business model. Instead, Blank is proposing the customer model as a solution for the flaws resulted from using the product model. A business model is based on the theory of crossing the chasm (Moore, 1991), which explains the technology life cycle adoption curve, where encompasses the phases: innovator, visionary, pragmatic, conservative and skeptic. According to this theory, the startup will face 4 different groups of customers during its development and will face a big chasm between the visionary (early adopter) and pragmatic (mainstream early ) group of customers. The customer model has introduced the four steps to the epiphany. Those four steps are discovering the customers (validate problem-solution fit and get to know the customers), validating the customers (validating the product-market fit and test sale road map), customer creating ( creating demand, capturing value and creating customers) and finally building the company (developing organizational structure, appointing management and managing operations).

 

Prepared by: Munther Al Dawood- Lean Startup Professional

Enterprise Development Services

www.growenterprise.co.uk

maldawood@growenterprise.co.uk

Reading, UK

 

Main sources:

Jake, Knapp, 2016. SPRINT, Bantam Press, UK

Moore, G. 2013. Crossing the chasm, 3rd edition.

Blank, S. 2013. The four steps to the epiphany

Womack, J. & Jones, D. 2003. Lean Thinking, Simon & Schuster, London UK.

Categories entrepreneurship, startupTags , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this:
search previous next tag category expand menu location phone mail time cart zoom edit close