start-up
Testing Assumptions with Customers
When you are testing the assumptions you generate in the Assessment stage of the ACE Methodology, you have to first define and verify them through research in the Confirmation stage. This means asking a lot of prospective customers the three critical questions: 1) do they really have the problem you think they do?, 2) do they have an urgent need to solve it?, and 3) does your product seem to offer a compelling solution? The customer investigation process is an important part of designing a successful product.
To do this, you have to ask people these questions, either in-person or virtually. Conducting face-to-face interviews is best because you can judge their reaction and ask probing questions. In Startup Assembly Manual, we discuss the Seven Steps of customer investigation; it’s a sales process structure.
Virtual interviews need a different strategy. You have to test your marketing message through a web site or social media to get the answers to the questions. The best method I’ve tried on the web is where your home page has a random redirect function to four different pages. Each page has a different message, which basically asks… Continue reading
Pitching to Investors is a Sales Process
When entrepreneurs try to raise money at any level, it involves a “pitch”. Pitching to investors can be defined within the context of a sales process where you and your idea is the product and the investor is the customer. There are some rules, but first, don’t pitch until you are ready.
Before the pitch, entrepreneurs have to understand the investor’s mindset, what they are looking for. They want a place to put money that has the potential for maximum return with as minimum of risk as possible. They don’t normally want to “take a flyer” on an unproven concept. Therefore, you have to prepared with as strong a “proof of concept” as you can. There are three flavors of proof of concept: technical (does it work; does it give the customer the value proposition it promises); economic (is the price customers will pay be more than a summation of the costs involved in producing and selling and distributing it).
The third is “social” proof of concept where you have proven that there a lots of people with a) a real problem (the one you think they have), b) an urgent need to… Continue reading
Sculpting an Entrepreneurial Elephant
In a college art class (a long time ago) we were told to sculpt a “successful elephant” with a lump of clay. The puzzled guy next to me asked how to start making a successful elephant. Consistent with my smart-ass nature, I said, “remove everything that doesn’t look like an elephant”.
I meet a young entrepreneur last week and he asked ”how do I make a successful business”. After a quick flashback, I answered: “remove whatever will make it fail.”
But, after thinking through why I was getting a blank expression, I realized the problem was he didn’t yet know what will cause failure. Of course, he didn’t know how to succeed, either. I quickly revised my answer to “try everything that sounds smart, be willing to fail, remove that and then leave everything that works; whatever is left over will look like success.” Failure is a part of the entrepreneurial process – just don’t make it a permanent part.
I don’t know if that’s wise or not, but I thought it is pretty cool.
After an entrepreneur STARTS a business
The dream of every entrepreneur is to start and run a business that will provide a rewarding, challenging, and fruitful life. Or maybe it’s reaching that pot of gold in three to five years—or someday. Most founders I know see overcoming the challenges as the fun part, where the journey is as—or more—important as creating the exit. For me, that’s true. It was never about the money, it was about the puzzle-piecing, the arranging the parts of the business in a well-oiled symphony of ever-expanding efficiency and production. The money just comes along with doing that well.
OK. Maybe that sounds a little dramatic. It is really true, though. If you don’t love the challenge of arranging and massaging each detail of growing the business, from engineering to manufacturing to eCommerce to the mail room, you may miss some critical component. A business is like a big machine, with gears and levers and belts and motors, all whirring in fine precision—at least it SHOULD be. However, trust me, if you don’t pay enough attention to that little gear over there, you could break the machine. Or, more likely, make it run inefficiently. It runs, but it might be losing power.… Continue reading
ACE Methodology – Personal Assessment 1
ACE Methodology
The concept behind the ACE Methodology for Startups applies itself well to most endeavors intended to create success. The Startup Assembly Manual uses it to lay out a road map for entrepreneurs and people with an idea but no clue what to do with it.
ACE is Assessment, Confirmation, and Execution. The Assessment stage leads you through the process of assessing yourself, your customer, your product, and your business idea. From that comes a set of assumptions which are refined, defined, then tested in the Confirmation stage – first with research and customer investigation then with sales. When you have a proven set of assumptions, you build a business plan and Execute it.
In this article, we’ll discuss one of the most important assessments you will make, personal assessment. In future articles, we’ll discuss more personal qualities that make up a foundation of success. But, let’s start with this:
After forty years of being an entrepreneur and knowing a lot of them, certain personal characteristics seem to determine success or failure. Someone asked me what is the most important trait of a successful entrepreneur. I answered: objectivity. This is the ability to see things… Continue reading