As an entrepreneur I have drawn amazingly helpful insights from Eric Ries’ The Lean Startup method, since the publishing of his book in 2011. By 2013 I realized, that even founders and managers that are well embedded in the Berlin startup community still despair of problems that are virtually inexistent, if you go by his book.
Founders (besides the copycats who can copy best practices and from there go straight to identifying and optimizing KPIs) are creative souls who want to show the world what an amazing, polished and meaningful product they can develop. It’s the product of the essential entrepreneurial resource called confidence. But to often it’s overconfidence.
“Startups don’t fail because they lack a product; they fail because they lack customers and a proven financial model.” says Steve Blank, professor of entrepreneurship at Stanford. Yet founders often hide with their product in stealth mode until the day of the big launch (which is often postponed several times) and as a result bet the entire company on a single shot.
But the real challenge of successful entrepreneurship is not to perfectly execute a plan that, in the end, might turn out to fall short of having an accompanying working business model. It’s to be humble enough to question your own strong vision and allow yourself to discover a real customer need worth supplying a solution for, before running out of money: A real need, a big enough market, space for a sustainable margin and a large and cost efficient distribution channel.
As Nobel Memorial Prize winner in economics Daniel Kahneman points out in his 2011 book Thinking, Fast and Slow: We assume that success is based on a coherent plan, but often it’s luck. We assume the Google founders had an exact plan to get where they are today. While in fact they started with a different business model and tried to sell their company at a mere 1 million USD, but didn’t find a buyer. If they had tried to blindly execute their plan, they wouldn’t be around anymore.
You can discover these opportunities called luck in a systematic fashion if you use The Lean Startup’s system of innovation accounting based on validated learning that helps you decide when to stick with and when to change your plan.
Let’s stop making 5-year plans (it didn’t lead any communist country to prosperity) and on-road test ideas at contained costs. So no matter if you only like to learn from interesting real-life cases or need hands-on help from someone not stuck in your company’s daily business routines that will share his honest and unbiased opinions, I’ll be glad to help. [find out what I do]