The following is a guest blog post by Dan Casas-Murray.
Over the years, we’ve observed many startups – some brick and mortar, some hardware, some software, and some services. So we’ve put together a list of waypoints we typically see Entrepreneurs pass during their journeys. This infographic is for you if you are curious about starting a business and want to see what’s ahead before you start out. You can scroll all the way through for an overview, or click on any of the Tools & Resources links to drill down and learn more.
Enjoy!
Finding Out Why
What’s Involved: You’ll need to do some soul searching & discover your unique skill set. Your unique skill set is at the intersection of 1) what you’re good at, 2) what you love doing, and 3) what people will give you money for.
Things that Come Up: You don’t have to know right away, but keep thinking about this as you go along. Are you doing this because you’re just trying to make money? Do you want to leave a legacy for your children or loved ones? Are you trying to create a lifestyle for yourself? Or do you want to create an empire? There’s not a right answer – but the one you pick will help you focus while on your journey.
Value Proposition Design
What’s Involved: Your main focus is on finding people’s problems and understanding them deeply. Every customer has emotional and functional needs, and your job is to get so good at defining their problems that they look to you for the answer.
Things that Come Up: You’ll want to choose customer segments, make assumptions about them, and then get out of the building and talk with people to validate your assumptions. You’ll use your potential customers to try out problem-solution sets. Finally, you’ll describe what your solution does, who it’s for, how it helps the customer, and what kind of person they become as a result of using your solution.
Getting Traction on Your Solution
What’s Involved: There are various ways to get your solution to new customers, called Channels. Getting traction means testing different channels to build awareness and deliver your solution’s value. You’ll test many, score with a few, then dial in those channels that are successful.
Things that Come Up: Landing pages, websites, and sales funnels are digital assets, designed to capture potential customer leads. They should test for three things – 1) you have a validated value proposition, 2) there is interest for your solution, and 3) customers are willing to give you some form of currency (time, money, pre-orders). Use these assets for people to land on while testing your traction Channels.
Creating a Minimum Viable Product
What’s Involved: A Minimum Viable Product is the most basic version of your solution people will give you money for. Your MVP will take the form of a Service, Software, Hardware, or a mix of all three. You’ll prototype your solution and test it on living, breathing customers a few times before getting it just right.
Things that Come Up: Prototyping is the main focus, though the very first versions of your MVP don’t have to work. This is usually a good time to start looking for a co-founder. You’ll also continue testing traction, so you’ll start to formalize your sales funnels and websites.
Planning the Business
What’s Involved: You have everything you need to put together a business plan now. You have customers, how you reach them, and the thing that produces the value they want to pay for. You also have an idea of what it may cost to produce and who will supply you with the resources you need to build and serve it. The Business Model Canvas is a good place to start creating your plan.
Things that Come Up: After understanding how you’ll make money, you can loosely classify the business model. From there, you’ll decide on which type of legal entity you want to use, learn some accounting basics, and delve a bit into Intellectual Property. Patents, Provisional Patents, Copywriting, Trademarking, and Licensing are a few subject areas to look into.
Making Your First Sales
What’s Involved: You don’t have to have a fully built sales solution – just a manual, “I’ll give you this for X dollars” exchange method. As you trade your solution for currency, customer issues will arise that you can use to make your solution better. You will also begin learning how your customers like to purchase your solution. Branding will become the way that customers identify you in the market.
Things that Come Up: You may need help fulfilling the first few orders, so employees become a part of your business. Remember that employees are there to do the things that you want to do but don’t have enough time for. They are not there to do things you don’t want to do. You cannot pay someone to care about your business the same way that you do.
Deciding on Funding
What’s Involved: Sometimes you will receive orders that are too big for you to finance yourself. Different types of funding can be available – debt financing, the three F’s (family, friends and fools), and equity. You will need to decide which type and which products are right for you and your business.
Things that Come Up: You’ll want to clearly communicate your business, so assembling a slide deck is a good idea. Remember that money comes with strings and investors have needs – they are all different, but most of them will want to stay updated on your operations and your Profits and Losses.
Serving your First 100 Customers
What’s Involved: By now, the business is too large for you to handle by yourself, but you are still able to affect procedures, policies, and customer experiences. You’ll take time to pay attention to (not necessary fix, however) every small issue that arises. You’ll start thinking about systems and ways to automate your solution with machines and people.
Things that Come Up: You’ll start needing to address Payroll, Points of Sale, Managing the Customer Experience, Growth, Employee Issues (will later become HR’s job), Billing, Accounting, and Taxes. You’ll also start paying attention to Revenues, Costs, and Profits.
Serving Your B2B (Business to Business) Customers
What’s Involved: You’ve created a solution for customers that is now proven in the market. Other businesses will start to notice and will want to purchase more than one of your solutions at once. They have unique challenges, and are likely to want your solution but with a modification here and there. Eventually, you will begin to see similarities and can formalize “Business Solutions.”
Things that Come Up: Your organization will grow to the next level after receiving Purchase Orders from other companies. You’ll have greater revenues and will need more help taking care of your customers. You’ll need to formalize policies, hire managers, and account executives. For business development, you’ll need to starting thinking about crafting proposals and other business sales documents.
Scaling Your Business
What’s Involved: You now manage two books: your B2C customers and your B2B customers. This means that you’re buying resources in bulk, you are producing many units and different types of units, and you are keeping track of all of your customers. Departments will start to form and you must drive your company using other people’s talent and labor.
Things that Come Up: Leadership is a key discipline to exercise now. It’s always been important from the beginning, but it is a non-negotiable at this point. You must learn to be consistent, concise, and simple in your communications with other leaders in your organization, managers, and employees. And yes, you’re still responsible for things that do – and don’t – happen.
Our goal at The Lean Innovator is to bring together what we’ve learned and put it a place that will let us host a community of empowered entrepreneurs. Entrepreneurship is definitely a solo undertaking, but it doesn’t have to happen without support.
