This post could also be titled: How to avoid unnecessary risk.
I encounter it with entrepreneurs more often than not: the willingness to take a leap of faith over doing the necessary ground work, or being reckless in the name of their “risk-taking confident” self-image. Eric Ries calls it “waste” in his Lean Start-up approach.
And yet these entrepreneurs embrace Lean Start-up, or at least say they do and use all terminology. A term like “MVP” is almost always used in the wrong way: let’s build a version of our product with a minimum set of functionality, then go to market with it and we will find out if it will sell.
It is probably about falling in love with your idea and not wanting to invest any time, energy or money into proving you are wrong, or at least may be wrong. Completely understandable in that sense: cognitive dissonance. “Trust me, I know what I am doing.”
Or even saying that the research has been done: we designed a Value Proposition we believe in, we asked experts what they think, we developed a prototype/wireframe and did user tests, we ideated a business model with the big numbers based on solid market analysis.
And yet, no sale has been made, no letter of intent signed, no validation that customers will actually buy the product. That has to be taken as a leap of faith.
Fortunately most entrepreneurs that I ask the hard questions start to realize that they may indeed not have the validation they should. That they indeed could and should do more research before building (more of) the product or going for a funding round.
I am a risk-averse person by nature. Does that make be a bad entrepreneur? I believe risk management is an important skill for any entrepreneur. One could even argue that Lean Start-up is a risk management technique at its core. So yes, I am hesitant to take big risks into the unknown. But I am simply unwilling to take unnecessary risks, as I believe it is reckless and “bad business”. Why not do some more research first, bootstrap a bit longer, towards actually validating your problem-solution-fit and product-market-fit?
So often it is possible to sell before you make. Or develop a product incrementally along with getting in revenue. Is that always possible? Probably not, but it is possible much more often than you think.
It is about being creative with the question: How can we test if our customers are willing to buy our product without actually having made the product?
Photo by Alex Radelich on Unsplash