Most entrepreneurs start a business because they have a great idea for a product or service and think they can make money selling it. Entrepreneurs take on considerable risk in launching ventures and then pushing businesses forward until they either take off or run out of money. But all too often, entrepreneurs are dreamers far too in love with their ideas. Reality dawns and the market response to their products doesn’t match their expectations.
It’s not only startups that face these challenges, either. Existing companies often change services or develop new products because either the CEO wants to try something new or a person on staff thinks they can do something a better way. The rub here is that none of these ideas is driven by customer needs or interests. Just because you can offer a product in more colors or with new features doesn’t mean more customers will buy that product. As a result, many new product launches fail because the market response isn’t consistent with expectations.
Of course, we’d all like to know how the market is going to respond before launch. But that type of crystal ball hasn’t yet been developed. Instead, we need to rethink what it means to take an idea to market. We need a launch model that’s less like jumping off a cliff and more like figuring out how to fly.
Luckily, I have a suggestion. I really like the book “The Lean Startup” by Eric Ries because it provides all sorts of good ideas for how to think about how to operate a business in a way that keeps everyone’s eyes on the customer. I’ve been using the concepts from this book with my clients and in my own business ventures and think it’s pretty much right on target. So, here are a few ideas for changing the way you look at business growth.
Before you make any changes to business, make sure you know for whom you’re making the changes. If your new product or service was developed by your top team members sketching out ideas on a whiteboard in your conference room, stop. Your new product ideas should come from your customers and not from your conference room. Great products don’t come from really focusing on being good at making things. Great products come from companies that really know the needs and desires of their customers.
The next step is to approach business development like a laboratory scientist. Come up with several ideas for what you think will appeal to the market and experiment with them. Don’t do a full product launch, but rather test the market with every new idea. Get really good at pulling together enough resources to launch a prototype or beta test a product offering and see what the market says. You can’t really know what the market will do without testing, so get really good at testing.
Stop trying to hit home runs. Just get on first base. Too often we tweak and polish products until we think they’re prefect and then take them to market. A better idea is to see if you can get your idea 80 percent finished — good enough to provide value, but not finished — and try it out with your customers. Ries calls this developing the “minimum viable product.” They core principle here is that you’re going to change and improve the product or service once you see how customers respond. Why try to get it 100 percent perfect when you’re going to change it anyway once you know what customers think? I like to think about just focusing on hitting the ball and not worry so much about whether each swing will hit it out of the park.
Finally, watch your results like a hawk. Make sure you track everything. Know what’s selling and to whom and why. Are you attracting new customers? Who are they? Are you selling more to your existing customers? Why? Watch the market response carefully so you can continue to experiment and test until the business is really flying.