You are doing everything right; you have a great product with a brilliant team behind it coupled with the right technology. You are doing exactly what you need to be doing; at the right time and at the right place. You know you are onto something. Its not working out yet. You know you are almost there, but not just yet.
What is holding back your success? You are working hard, you are determined, and brilliant, and have perseverance. So what is wrong?
It’s the process. The process of building, managing, and selling your ideas, products, and services requires a new way of thinking and tapping into the passion, energy, and vision that exists in small businesses and start-ups.
In his book, “The Lean Startup”, Eric Ries outlines five principles that I believe any small business can implement in 2014 and better succeed where others have failed.
1. Entrepreneurship is Management
Building a Startup is an exercise in institution building; thus it necessarily involves management” – Eric Ries
Most small business owners will rarely think of management when getting started; but this is exactly what building a business is all about. Entrepreneurship requires a managerial discipline in order to harness the opportunity that exists.
Small businesses commonly experience failure in product dissatisfaction, turnover, failure to meet demand among others. Managing failure thus becomes an important part of growth. Such aspects as the product concept, development, marketing, scaling up, and partnerships may become failures or successes during the early stages and need to be managed effectively to keep the business focused on its vision.
2. Validated Learning
“I’ve come to believe that learning is the essential unit of progress for start-ups.” – Eric Ries
Entrepreneurs have a hard task of learning the truth about what is working and what is not. They must learn what their customers really want and not what they think they should want. Learning should thus not be an excuse to hide failure, but rather, demonstrating a path that will lead to a sustainable business. This is validated learning.
Customers may not tell you what they want, especially if they have never heard or used a product like yours. The most important thing in such a situation is to experiment and iterate, not form focus groups or rely on market research. As you collect this vital customer data, patterns will start to emerge and you may be surprised at how distant your original strategy was to what customers really want.
Validated learning is thus any knowledge gained that creates value for customers. Any other form of learning is simply a waste since it takes you away from figuring out the right things to build.
3. Innovation Accounting
“Remember, if we’re building something that nobody wants, it doesn’t matter if we’re doing it on time and on budget.” – Eric Ries
In order to see whether your efforts are bearing fruit, you need some quantitative approach in your product development. Creating learning milestones allows you to assess your progress more accurately and objectively. This includes identifying and differentiating vanity metrics from actionable metrics for customer analysis.
In order to do this, start by establishing real data from a minimum viable product to know where the company is. Second, tune the engine by making micro changes and product optimizations towards the ideal from your product prototype. Third, ensure you are progressing toward the pivot, or the decision point, which determines whether the current strategy is working or a new strategy is needed.
“The Lean Startup method builds capital-efficient companies because it allows start-ups to recognize that it’s time to pivot sooner, creating less waste of time and money.” – Eric Ries
For small businesses, any products you develop and services you offer are essentially experiments. You are learning how to build your business and this is more important than what you make or the popularity that you get since it influences your next set or wave of ideas. All of this creates the build-measure-learn feedback loop that is essential to growth.
You need to enter the build phase with a minimum viable product as soon as possible. The measure phase will help determine if you are making any real progress in your product development efforts. This creates learning milestones from where the feedback loop starts all over again.
The above principles apply to all businesses that are either getting started, growing, or looking to accelerate growth. These principles have helped many companies and organizations eliminate uncertainty, work smarter not harder, develop a viable product, and validate learning, and they can help your small business to do the same.
5. Entrepreneur is Everywhere
“What makes you an entrepreneur is not what kind of noodles you eat, but rather the context in which you operate.” – Eric Ries
Small businesses and start-ups operate with a lot of uncertainty. They are ever learning who their customers are, and how their products should look like. The innovation and chaos in such working environments require a dynamic and exciting management model which is very different from the more traditional approaches that rely on solid strategies and thorough market research.
David Gitonga is a full-time Web content creator and strategist working with various companies in developing and executing online marketing campaigns on social networks and search engines. He mostly works with small and medium-sized businesses looking to leverage the Internet to drive sales, innovation, and engagement online. Connect with David on Twitter and Google+ or through his website.