The very earliest days of a startup’s life are some of the most exciting, but they’re also arguably some of the most risky. Decisions must be made in the early days about all sorts of things that will affect the future of the business: what products to offer, what kinds of customers to serve, what marketing channels to use, what sort of company culture to build, and on and on.
Although for many startups the table stakes (investment of time and money) are relatively low, there are plenty of funded startups with a substantial amount of capital on the line. Whether the investment is time, capital, or both, there are ways to reduce the risk involved in starting a business.
Today’s guest, Ada Ryland, works with early-stage entrepreneurs to help de-risk their startup enterprises.
Success or failure in business really comes down to whether or not you can create (and keep) a customer.
One of the most common mistakes we see early stage startups making is focusing too much energy on building an MVP—Minimum Viable Product—before validating that they have a viable business in the first place. Don’t misunderstand: the MVP stage is an important step in validation, but it is a later step, best taken after the business prospect has been validated in other ways. Building an MVP is expensive, whether you build it yourself and spend time, or whether you hire someone to build and spend money. And that expense translates to risk.
In this episode, Ada Ryland walks us through four models that can be used to validate a business idea before expensive investment in the MVP stage. We’ll talk about:
- The Business Model
- The Customer Model
- The Market Model
- The Financial Model
Each of these models has a role in reducing the risk by exposing your business idea to hard questions.
Even if you’re already launched, you’re sure to get a lot out of this episode. These questions are not only for early-stage startups, and some of the tools (like the Lean Canvas) can be applied at any time to sharpen your offering.
Links in this Episode
- Jobs to Be Done
- Clayton Christianson
- The Milkshake Example
- The Milkshake Example Youtube Video
- Jason Fried: Who are you Competing With?
- Running Lean by Ash Maurya: O’Reilly | Amazon | GoodReads
- Ada Ryland on LinkedIn
- Bootstrap Austin: Interview with Bijoy Goswami
- 12 MVP Models PDF on Booster Stage.