The tools and techniques of Entrepreneurship: A distillation
February 7, 2023
4 min read
Say You Want a Revolution
The front-end activities of starting a business enterprise have gone through a radical rethinking in the past decade. In the previous century the thinking was to apply the tools and techniques of business administration in a scaled down version.
Lean Startup has developed a process that incorporates the scientific method in searching for a business model that matches customer needs with novel products and services.
The scientific method has been so successful in creating progress and innovation, discovery and invention because it tests assumptions and guesses against reality and refines the guesses in the face of evidence.
It is evidence based learning and revising and it works really, really well.
A startup is not a mini-me version of an established company. A startup is a temporary organization searching for a sustainable business model. A startup’s goal is to evolve itself out of existence and become a company, like a caterpillar to a butterfly.
This is a revolutionary conception of what it means to start an enterprise and what kind of mindset the entrepreneur needs to achieve success.
We usually think of innovation as technology driven: bigger, faster, cheaper, smaller etc. The Lean Startup Methodology is a radical innovation but it’s an innovation in techniques and methods. It represents a paradigm shift in thinking. It is very powerful and has rapidly been adopted through Silicon Valley culture, government, military, and academia, both throughout the US and internationally. There are hundreds of accelerator programs based on Lean Startup all over the world.
Everyone wants to replicate the incredible success of Silicon Valley as an engine of wealth generation, innovation, and economic development. Lean Startup is at the core of all those initiatives.
Meat and Potatoes
There are three core concepts of Lean Startup:
Business Model Development
This part uses the Business Model Canvas and its nine aspects to organize the details any business idea into a readily graspable conception that can be analyzed and tested.
In order to find a sustainable business model you need to achieve Product/Market Fit. This means that your product or service’s value proposition and feature set needs to address customer needs, wants, or desires. This brings us to the next two concepts: developing your product through interaction with potential customers.
We an paraphrase von Moltke’s hard won insight into:
no business plan survives initial contact with customers.
This is the process were you talk to humans, gather data and information, analyze it and revise your value proposition relative to the feedback and evidence.
This is about developing products and services in an iterative way by starting with the basic feature set in a minimal viable product MVP and presenting that to customers and being prepared to continually go back to the drawing board until you hit upon the features that really meet a significant customer need or desire.
Tools of the Trade
The tools and techniques include:
Business Model Canvas
Minimal Viable Product
Customer Discovery and Validation
Iterate, Pivot, or Persevere
This is where you course correct based on the feedback you receive from potential customers. This is the process.
These concepts work for any commercial venture not just high tech venture backed startups. A plumber, a nail salon, a barbershop, any business will benefit from this type of analysis, assessment, and action plan to reduce risk and increase the chances of success.
Everyone can benefit from learning to employ these tools, techniques and methodology in formulating and executing on any practical idea or business conception. This is a great approach to adding rigor to anything you want to get out of your head and from ideation into the world where it can make an impact.
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