Introduction
As a startup founder, you're actively exploring new business models. You shouldn't expect to know with certainty who your customers are, what product you should build for them, or how you're going to make money.
As recently as 10 years ago, business schools taught business plan writing as a core discipline for entrepreneurs. They would have aspiring entrepreneurs write lengthy tomes on what problem they intended to solve, who their customers would be, and what business model they would adopt. They even asked entrepreneurs to create detailed five-year cash-flow forecasts!
The truth is that a business plan for a prelaunch startup is largely an exercise in creative writing. Most of what goes into the plan is pure speculation.
Based on the work of thought leaders such as Steve Blank and Eric Ries, it's now accepted that startup founders achieve better outcomes by engaging with customers early to learn about their needs. Then founders create a lightweight business plan that can be easily adapted as the company progresses. This course of action is the essence of the lean startup methodology.
In this module, we're going to focus on putting the lean startup methodology into practice. We test and validate your startup idea quickly and cheaply with customers before you build a product. If you already started building your product, that's fine. This module helps you check that you're on the right track.
We're going to use the Value Proposition Canvas by Strategyzer and the Lean Canvas by Ash Maurya. Two great (and free) tools that help you engage with customers. These tools can also validate your problem and solution hypotheses. You're able to use this information to decide what product to build.
This subject is arguably the most important one we're going to cover. Of all of the things that cause startups to fail, building the wrong product is by far the most common.
Learning objectives
By the end of the module, you're able to:
- Articulate your idea by using the Value Proposition Canvas.
- Set out your proposed business model by using the Lean Canvas.
- Use design thinking to identify critical assumptions.
- Build user personas that represent your target customers.
- Plan and conduct customer interviews.
- Test your assumptions by creating experiments.
- Make decisions about what product to build based on the results of your customer interviews and experiments.