What Carly Rae Jepsen’s Call Me Maybe has to do with Startups

July 18, 2012 By 1 Comment

Is it hard for you to get Carly Rae Jepsen’s “Call Me, Maybe?” out of your head too?  Haha, if you’ve never heard this summer-smash, then you probably haven’t listened to the radio over the last couple of months because this song is constantly on!  So love it or hate it, this song is catchy and it’s going to be here for a while.  If you have not heard it yet, here is the video… if you have heard it, just scroll down…

WATCH/LISTEN:

This morning I was on my way to a 7:15am meeting when Call Me Maybe came on… and as I caught myself humming to the chorus it hit me:  “Call Me Maybe?”  is really doing something right… and successful startups are also doing what Carly Rae Jepsen is doing in this song.

You might thinking to yourself, “Bill, how in the world are successful startups doing anything similar to what Carly is doing… and Bill, you’re actually admitting to listening to that song?”  Haha, well, yes, I am admitting to listening to it and I believe Call Me Maybe shows 2 things that successful startups practice:

1. Super-Riduculouly Simple Story with a Pickup Line/Sales Pitch that gives the listener EXACTLY what they want: The story in Call Me Maybe describes a girl  that has a crush on a guy that she randomly meets… after a bit of conversation, and in flirting manner, she gives him her number and says, “This is Crazy, but here’s my number… Call Me… Maybe?”  The story is easy and straight-forward while capturing the emotions around an event that frequently happens… “Hey I just met you, and this is crazy, but here’s my number, call me… maybe.”

You may be wondering what this has to do with business, well, Freshbooks.com has done the same thing for a somewhat boring industry: Accounting.  Their pickup line or sales pitch is ridiculously simple and gives the listener exactly what they want to hear… it goes something like this: “We know your busy and hate keeping track of your financials, but we’ll make it fun and save you money… so try us for free.”

They had me interested and then they said “FREE”   It only took 2 days for me to switch to Freshbooks from outsourcing my accounting work and using Quickbooks… and by doing this, I saved between $700-$1,300/month!

This is all because of the idea they told me EXACTLY what I wanted to hear:
1. That accounting could be fun.
2. That it would save me money… and most importantly…
3. I could experience this with a free trial.

And in the end it got me to spend about $30/month for their unlimited package.

2. Creating Experiences to Encounter the Unexpected:

“Call Me Maybe” is all about the unexpected.  The typical pickup story goes something like this:

Guy: Hey, I’ve seen you here before.  My name is Dave, what’s your name?
Girl: Jill… yeah, I’ve seen you around here before too.”
Guy: blah, blah, blah… so we should get together sometime, what’s your number?
Girl: (gives number) and then waits for him to call.

“Call Me Maybe” however reverses this story in a fresh way and tells the story from the girl’s point-of-view with the additional of one unexpected word that changed everything: “Maybe?” That one word speaks volumes.  It’s not normal to add this word to the end of the statement “Call me,” but in this instance, it sure seals the deal!  What guy wouldn’t call after that?

Well, Mailchimp.com had been doing this same thing for years! While Carly is describing the dating scene, Mailchimp is constantly creating experiences for their customers to experience the unexpected in the boring world of Managing Email Lists.

Look at every other software in the space of email campaign management… it’s the same type of business model, sales pitch and boring interface.  Mailchimp however came into this space with a brand that didn’t look like the competition and peppered humor throughout the interface of the their web application.  An awesome example is when a person opts out of your email newsletter: Mailchimp does not send the normal email scolding you for sending a newsletter to someone that doesn’t want it… on the contrary, they send you a humorous email saying something like, “Bummer, someone unsubscribed from your newsletter!”  Notice the change of tone?

They took something that everyone knows: Customer Email Lists, and made it fun for the user and worth talking about. While Carly says “Here’s my number, call me… maybe?” Mailchimp is saying, “Let’s have fun emailing together!”

When I started using the free version of Mailchimp for my online custom t-shirt business, CoedMonkey.com, my sales instantly went up and I’ve been telling everyone I know to use them… with the super-simple chorus of, “Mailchimp makes managing customer emails fun!” It’s a super-simple sales pitch or pickup line for Mailchimp that everyone understands… so it spreads.

The 2 action points that we can take away from this are:

1. Is your business model and sales process super-simple and offering customers EXACTLY what they want?  If not, how can you make it more direct?  What can you cut from your offering or business model?
2. What are you doing that’s unexpected and that draws customers into interacting with you and talking about you more?  Do you involve humor?  Do you teach them throughout the sales cycle?  Do you have some reward that is unexpected once the sales cycle is complete?

I’d love to hear how this impacted you and if you had any other great examples of how Call Me Maybe? can be applied to your business… or just tell me how much you like/dislike the song!

Filed Under: New Startup Tagged With: , , ,

Turning Bits into Billions

April 19, 2012 By Leave a Comment


Did you hear about Instagram selling to Facebook for $1 billion?

Remember when News Corp bought MySpace.com for $580 million in 2005?
Remember when Ebay bought Paypal for $1.5 billion in 2002?
Remember when Google bought Hotmail for $400 million in 1998?
… and remember when Groupon unfortunately didn’t sell to Google for $5-6 billion just a little over a year ago?

Something is happening and it’s changing the types of businesses that are being created and how people are turning ideas into money.

Steve Blank, the Stanford professor and startup guru has described this as “Bits in Billions.”

My dad owns a successful financial management firm in the Milwaukee, Wisconsin area and I remember his reaction when he heard about Groupon turning down the offer from Google.

He laughed.  See, right around that same time as the infamous Groupon “mis-deal,” M&I Bank, the largest bank in Wisconsin sold to a Canadian bank for approximately $4.1 billion… significantly less than what Groupon thought they were worth… but M&I had been around for decades, had physical assets, nearly 10,000 employees, customers money, ATM’s and physical locations all around the country.  On the other hand, Groupon was an internet startup based out of Chicago with far less employees and a distribution method (internet coupons) with far less overhead than M&I’s nationwide banking network… but Groupon had two very important things… Users & Potential.

“Users” is the new hard asset and Market “Potential” drives the valuation of the company higher than it maybe should be worth… so an internet startup with hardly any physical assets or products, but a lot of users and potential for growth is really worth more than an established company with hard assets?  Yes.  Instragram gained over 35 million users in less than a year with a scrappy team of 8 employees… then liquidity came by being purchased by Facebook, a company that has figured out how to convert 780 million users into revenue.

Now, for any startup, turning bits into billions is as simple as figuring out how to turn users into revenue.

This is the new goal of internet startups.  For another example of turning bits into billions look no further than the internet darling Amazon.com.

When Jeff Bezos left his job at a hedge-fund company in NY he saw the opportunity that the internet presented.  Since the Supreme Court had ruled that online retailers did not need to pay sales tax for sales in states that they were not physically located, Jeff started Amazon out of the small state of Washington since it had such a small resident population (meaning sales tax would only affect a small percentage of his customers)…  and he opened up shop, or rather, he built a website for users to purchase products with no sales tax and has been turning internet bits into billions, ever since.

What does this mean for you and me though?  Here are 2 things that we must do!
1. Any physical business must start investing in bits, not in producing more boxes.  Bits can expand a business model and open new doors for the growth… simply producing boxes makes you rely on someone who understands bits to come in and help you figure out the internet and how to sell your boxes online to a larger customer segment than you currently reach.
2. If you aren’t doing anything online yet, start!  Whether that’s a launching a blog, starting a Shopify site to sell something that you make or just enrolling in a beginners course on how to code websites… the point is, do something!

Filed Under: New Startup Tagged With: , ,

Wax On, Wax Off

January 10, 2012 By Leave a Comment

Remember the original “Karate Kid” movie from the 1984?  After getting beat up by the neighborhood bullies, Daniel (played by Ralph Macchio) learns the art of karate from a “karate master,” Mr. Miyagi.  By the end (beware… spoiler alert!), Daniel masters karate and is able to defeat the kids that once beat him up.

But here’s the interesting thing about Daniel’s transformation… when he began learning under Mr. Miyagi, his lessons never included how to kick, punch or anything else related to karate.  Instead, Mr. Miyagi taught him how to wax a car, with the famous statement, “Wax on, Wax off… Wax on, Wax off…”  Imagine being Daniel though… how would you feel if your karate teacher refused to teach karate, but instead made you wash his car?  I know I’d be frustrated!  You can see the clip here if you’ve never seen it before:

Now I know what you’re probably thinking ,“Bill, how in the world does this actually relate to my life & my business?”

Well, the two things I’ve taken from this are:
1. Profound insights can come from immersing yourself in unrelated fields.
2. Mastering one discipline helps you create the habits that will help you master the next discipline.

Mr. Miyagi knew that waxing a car appeared to have nothing to do with karate, but if Daniel could dedicate himself to this task, then Daniel could also dedicate himself to also learning karate because practicing control over one area of your life will directly relate to practicing control over other areas of your life.

As we’ve entered a new year I’ve thought about this concept a lot, so instead of making resolutions, I’ve started to createda list of “Wax On, Wax Off Activities” that will serve as stepping stones to challenge me to grow:

- Creating a plan for my Physical Fitness.
- Organizing my personal Budget better.
- A new hobby.  (Painting, Drawing, Reading Fiction, etc…. this list could go on & on…)
- Having one night every other week that I make a dinner from scratch & eat it with 3-4 friends.
- Setting daily time limits for Facebook.
- Watching what I eat… only having one Carb-heavy meal per day.

It all starts the big choice to start… from there, with each and every step of progress, mastering the next thing will become easier… and this will roll over into other areas of your life including your business.

What is a “Wax on, wax off” activity that you can incorporate into your own life?

Filed Under: Health Tips, New Startup Tagged With: , ,

Speaking @ Carlson School of Management (UofM)- Powerpoint Deck with Audio

November 30, 2011 By 2 Comments

Here is the Powerpoint Deck with Audio from my presentation at the University of Minnesota’s Carlson School of Management Entrepreneur Club on November 2nd, 2011.  I produced this video specifically for youtube to fit the allowed time, so although this video will give you a feel for what I presented, the full 50 minute presentation will not be available.  Saying this, some of the stories that accompany the teaching points are not in this presentation… I guess you’ll just have to come out for my next presentation, but in the meantime, let me know how this impacts your startup or current business!

Filed Under: Crush Club, Customer Development, Minimum Viable Product, New Startup Tagged With: , , , ,

In Between Now & Then

November 22, 2011 By Leave a Comment


After 9 months in my new startup, I’m anxious.  I’m looking forward to seeing results and the first sale because after months of talking to people within our target market, my 2 co-founders and I believe that we have finally figured out what our Minimum Viable Product will be… and we have a TON of people that are demanding that we build it… and on top of that, we also have people interested in investing too!  Nine months ago we never could have imagined being where we are today… but this brings us to an awkward stage in the life of a startup… a stage where we are living “Between Now & Then…”  Between the present, where we are today (with an idea and a few Powerpoint slides) and where we want to go, the future (becoming a profitable company).

Nine months ago after I would talk with potential customers I felt like my head was being hit into a wall with responses such as, “well, I don’t know if I’d use this type of tool, I might try it but I don’t know…”  Now, however after changing the idea twice, each meeting ends with the typical response of “this is amazing, you need to talk to so-and-so about this… I’ll set up a meeting for you two because they need to hear about this… You need to build this… I can’t wait to get my hands on this!”  What a contrast!  I wish I could bottle up my excitement after each meeting and show you what it feels like!

However, amidst all of this excitement, the most difficult thing for me has been to focus on living in the “now” instead of the “then” of what this could become… because to be honest, even after talking to so many people, we really have no guarantees that this will work.  But that is really what a startup is all about… searching for a sustainable & scalable business model.  Searching is fun, but searching can be a lot of work!

Falling prey to a “Get rich quick” mentality and needing instant results can be easy, but if we are talking about something that could add tremendous value to your life, it is rare that these things will be easy & instantaneous… there’s no such thing as an no easy job, easy startup or even easy relationship… each takes a lot work, time and a stretching of yourself to a point that you might have thought previously impossible.  Amidst all of this, we find ourselves living between the present “now” and the “then” of where we want to be someday.  What we do in that period will tell more about us than all of our premeditated ideas of how we think we would handle success someday.  It’s in those quiet, normal moments that true character and resolve are formed… and that is the substance of amazing stories.

The Bible puts it this way in Ecclesiastes 3:1-2: “There is a time for everything, and a season for every activity under heaven, a time to be born and a time to die, a time to plant and a time to uproot,” so amidst every activity in life, there is a purpose for the waiting.

Think of something that you are currently waiting on… something that is captivating your time & thoughts.  What would it look like to turn your attention aside from the future and instead live in the “now,” and enjoy every single moment, living life to the fullest, taking advantage of every available opportunity?  Waiting helps us move forward with new ideas… after all, new ideas, new businesses and new relationships are all formed out of the “margin” time in our lives, and if we are constantly busy “doing” instead of “being,” it is hard to have margin for anything new.

Take full advantage of the margin and waiting.

Filed Under: New Startup Tagged With: ,

Startup Twin Cities is here!

October 31, 2011 By Leave a Comment

In 2003 I started my first business out of a college dorm room and it all started with a simple idea.  Ryan and I were two normal college guys that were both Business Administration Majors at North Central University who saw starting a business as a great opportunity to apply what we were learning in the classroom to real-life situations.  Now, 8 years later I realize that starting a business is much different than what Ryan and I thought it to be when we were back in the dorm room and I am on track to start my 2nd business that has unbelievable potential.

The Twin Cities has become well-known for the long list of Fortune 500 companies, but amidst all of the “big businesses,” there is also a growing list of small businesses and startups that have shaped the ever-growing business landscape of the Greater Metro.  For years the owners of these small businesses and startups have been left to look for opportunities to learn startup skills and network with other small business owners, but North Central University’s Business Department has recognized this need and has built a Free monthly conference to help equip these owners (and potential owners) with the tools for success… Startup Twin Cities! (Something I wish I had back in 2003!)

Check out this 30 second promo video…

Startup Twin Cities is a FREE event on the First Thursday of each month from 6:30-8:50pm at North Central University in Minneapolis.  Each event consists of:

- A Keynote Speaker to discuss one topic relating to the Small Business/Startup Community.
– Breakout Sessions related to various aspects of business (you choose 2 sessions to attend out of 3-4 offered).
– Opportunity to network with other current/potential owners.

This is not a typical small business networking event though… you will never feel pressured to buy anything and the strongly discourage business card passing to earn sales.   StartupTC’s goal is for you to grow as an owner, not be sold to.

I spoke at last months conference about the Crush Club concept as it has played out in my online t-shirt company (coedmonkey.com) and my new business venture, but the next meeting is Thursday, November 3rd at 6:30pm and will feature a great keynote speaker from Crowdcut.com (a great Twin Cities startup success story) and many interesting breakout sessions following… there is something for everyone and hopefully you will find your place in the this community.  Feel free to check out StartupTC.com for more info (the site is under construction right now, so it will take you to the facebook fan page).

See ya at Startup Twin Cities!

Filed Under: Crush Club, New Startup Tagged With: , , , ,

The Two Most Dangerous Words in a Startup

October 26, 2011 By Leave a Comment

The Two Most Dangerous Words in a Startup

I was recently on a conference call with the two other co-founders for my new startup when something hit me.  After spending 20 minutes discussing everything that had been going on and what our next steps were, the same two words kept coming up: “I Think… I Think… I Think…” 

Although we have spent nearly a year forming our Crush Club, getting in front of potential customers and learning what our Minimum Viable Product should be, apparently we’ve now reached a new place in the process where there are new questions that need to be answered… otherwise the two words “I Think” would have been replaced with something like “I know that xyz potential customers actually want…”

The goal of Forming a Crush Club for your Startup (or current business) is to get you out of your office and in front of potential customers to test your ideas and assumptions (fancy word for guesses), and replace them with facts and a business model… so basically replacing the “I Think” statements with “I Know” statements.

Don’t get me wrong… you need to begin with an “I Think” statement, but this “fact finding process” will give you continual Customer Feedback that will replace your own “I Think” ideas with customer based “I Know” facts that will help you know where you are going (building the actual business, product or service).  Just because you have met with a handful of people and learned a few things does not constitute that your search is over.  You need to continue to Assume.  You need to continue to Test those Assumptions.  And most importantly, you need to learn how to build something amazing.

Here are 3 Steps that will help you as you replace the “I Think” with the “I Know” statements:

1. Write down all of your assumptions (the “I Think” statements) about the following:
- What is the actual problem or need that you are addressing?
- Do people know that they have this problem or need?
- What is the profile of these people? (Age, Sex, Location, etc.)
- If you could create a solution, would people actually want to buy it from you?
- Can you build this type of solution needed?

2. Start forming your Crush Club that will help you test those assumptions.  Identify the people within your network that fit the profile of the person above that might want this type of solution.  If you cannot think of anyone within your network that fits these criteria, don’t worry.  You’ll just need to do a little more digging to search for someone to schedule your first Crush Club meeting with (you can do this in the Yellow Pages, google searching, facebook, linkedin, etc.).

3. Test your assumptions (the “I Think” statements) on a real person to find out if they are true.  Follow the 10 Steps for a Crush Club meeting.  By the end of each meeting, if the person has a “Crush” on your idea, then you can ask them if they know anyone else that might have the same problem and who can also offer advice… then sit back and watch your Crush Club grow based on their referral!

Whenever you find yourself saying “I Think,” (no matter if you have an existing business or a sustainable business), it’s time to get out of the office and replace those assumptions with facts.  In my case, we’ve come a long way since we first started this new venture, but each new step raises new questions that need to be answered, so we’ll keep having Crush Club meetings… but that’s what a Startup is really all about: Searching for a Sustainable and Scalable Business Model.  How is your search going?

 

Filed Under: Crush Club, New Startup Tagged With: , ,

10/11-10/18- A week in the life of a startup

October 18, 2011 By 2 Comments

2 Co-Founders, a Camera & 1min/20sec. to communicate the vision

I think that people commonly think of the founders of a startup working late into the night in a garage somewhere while eating ramen noodles, but needless to say, after 9 months of working on this new venture there have been no late-night “garage sessions” and we have not done any ramen-noodle runs to the grocery store.

Overall, the entire startup process for this new business feels rather ordinary… although it has pushed us out of our comfort zones by requiring us to meet with a lot of people to hear what they think of our idea, and stomaching it when they do not like it.  The good news is that over the past 9 months my two co-founders and I have conducted many CRUSH CLUB meetings and we feel as if we are nearly solidified what our Minimum Viable Product will be at launch date.

Fast forward from the beginning of this new startup to last Thursday with my latest blog post about the “big meeting.”  I wanted to update you on how that went and outline the last week so that you can see what a week in the life a a start-up co-founder looks like (because it’s not actually all that crazy, haha):

Tuesday, October 11th- (Various times from 12pm to 10pm)
- Cramming to finalize our Powerpoint Slide Deck for the lunch meeting in two days with the attorney that can introduce us to one of the biggest players in our target market.  There was a lot of Photoshop and Powerpoint work being done!
Wednesday, October 12th- (7am-8:15am)
- Early morning breakfast at Cuzzy’s (in Minneapolis’ warehouse district) with another co-founder to discuss the Powerpoint Slide Deck that we were going to present the next day.  (I had two eggs, hashbrowns, rye toast, ham and a couple glasses of water… in case you care to know)
- Finalize the last details on the Powerpoint Slide Deck with anything that was mentioned over breakfast.
Thursday, October 13th- (12pm-1:30pm)
- Lunch meeting at Wasabi (in Minneapolis on Washington for their lunch sushi/habachi special).  By the end of this meeting, the attorney liked the progress that we had made since we had last talked in August and offered to introduce us to one of the biggest players in our target market.
- Following lunch my co-founder and I got into my car and were pumped… I told him that in Silicon Valley they would be popping bottles of champagne right now, but since we are here in Minnesota, I’ll just drop him off at work again and we’ll hold the excitement inside.
Friday-Monday, October, 14th-17th
- Waiting to hear back from our attorney to hear if he was able to set up an introduction and meeting for us.
- Approx. 10:15 am- Receive news that the introduction had occurred and accepted… it was now in our court to provide availability… we began lining up our availability for next week.
- Approx. 2pm- Receive news that the attorney’s contact is too busy to meet with us right now because of current work load but wanted us to send info and then we can set up a meeting once his schedule clears… so we go into idea mode and realized  that if this guy is as busy as he sounds, then he probably doesn’t have time to read a long email describing our concept… so we decided to make a short youtube video that described the concept (we are not releasing it publicly).  By 10pm last night we had completed the video and sent the direct link to our attorney to pass to his contact.  The picture above is one of my co-founders and I from the 1 minute, 20 second long video that we made.
Tuesday, October 18th:
Waiting.

From here hopefully the appointment will get lined up but I guarantee you… no one has ever made a video to get in front of this person before, so it is going to get his attention!

That’s what a week in a startup looks like and although we all have day jobs I think that it’s pretty manageable.  How have you spent your last week?

Filed Under: Crush Club, New Startup

Sushi & Crush Club Meetings… it all comes down to this.

October 13, 2011 By 1 Comment

I don’t know if you’ve ever been a part of a startup before, but for the last 8 months I’ve been working on my 2nd one with 2 other guys.  It’s been a lot of work but today is the biggest day in the history of our startup.  Nearly 2 months ago I had an early breakfast meeting with an attorney who works for the target market of our new business.  (For anyone that has never been in a startup before, here’s a word of advice… get used to 6:30am meetings!)  He knows the industry well and hears their complaints, so it made sense to pull him into our CRUSH CLUB to give us feedback as we develop this new startup.

After showing him the concept that we had been working on for the past 6 months, he was very impressed and gave us a few pointers on things that we should continue working on, but he concluded by saying, “Guys, if you build this, every person in your target market will use this software.”   We had spent the previous 6 months developing the concept in coffee shop meetings with our Crush Club, so this was not breaking news to us, but this attorney went on to say, “In fact, if you can make these few tweeks and show me the changes, I’ll personally line you up with some of the biggest players in this field that I work with so that you can show them the idea.  They’ll love it.”

Crush Club 101… if you are truly solving a need and the person that you are meeting with is somewhat experiencing the same need (or knows people that do), then it will not be hard for them to set you up with the type of person that will help you refine your idea and eventually buy your product. 

That was 2 months ago.  No Fast Forward to today.  Paul, Geoff and I have been working for the past 2 months to refine our idea based on the feedback of our Crush Club and this attorney. Right now I’m sitting in a Dunn Bros coffee shop typing this blog post as I’m getting ready for our second meeting with this very busy attorney.  The plan is to take him out for sushi, show him the progress that we’ve made off of his ideas, then ask what he thinks (open ended… we’re not selling him)… then by our last bite of sushi, we’ll know if the 8 months of hard work have been worth it… or if we still need to use our Crush Club to search for the correct business to build.

I can’t wait… but this is what it feels like to be in a startup.

Filed Under: Crush Club, New Startup

Get out of your Office & In Front of Customers (The Case for a Crush Club- Why 9 out of 10 Startups Fail)

October 4, 2011 By Leave a Comment

Get out of your Office & In Front of Customers. (The Case for a Crush Club- Why 9 out of 10 Startups Fail)

The fact is simple: Nine out of Ten businesses fail in the first 2 years… this is not from a lack of business training or not having a great product.  It seems crazy to think, but popular business teaching and common sense thinking actually lead down a road towards failure (don’t believe me?… keep reading).  One of my favorite business influences, Steve Blank puts it kind of like this: The sad reality is that most start-ups fail because they don’t have enough customers, not because they don’t have the best systems in place or their product/service is not good enough.   The reality is that most business owners put all of their time into product development only to find out later that there is no customer demand for what they have been busy building.

So how do we go about building a business based on customer demand instead of the owners assumptions?

Here are the 2 roads that business owners can take… which one do you find yourself walking down:

1. The Wide Road beginning with Product Development (Building your start-up based on assumptions that people will buy from you someday)
2. The Narrow Road beginning with Customer Development (Building your start-up knowing that people will buy from you on the first day)

I’ll illustrate the both below:

Startup Path #1- Hopefully Sales will result after all of the work

Click on the Image for Larger View

1. The Wide Road: (9 out of 10 times this road is traveled and the business fails) The Entrepreneur gets an idea, creates a plan, raises money and starts developing the start-up with the hopes that someday there will be enough customers to actually make a profit. This scenario hinges on the owner’s assumptions in the Business Plan (“Assumption” is really just a fancy word for “guesses”), because in this scenario the owner hopes that Marketing will bring in enough customers to meet the growth projections in the business plan.   Everything is predicated on the Launch Date, because that is the day that the investors (if there are any) and owner(s) hope to start getting their money back.  Without a defined customer base that demands the product/service, many companies will Alpha/Beta Test the product to make sure it works and launch a Free or Reduced Cost version to gain “customers” in hopes that someday they can charge full price for the product.  “Hopefully” is a common word in the marketing and sales meetings, while “someday” is a realm of reality that the company continually lives in.

The problem with this type of Start-Up: Once they burn through the cash and launch the product, they often find themselves asking the tough question, “But where are the Customers?” without enough money to rebuild the company to meet what people actually want.

Now let’s take a look at the Road less traveled that begins with Customer Development instead of Product Development:

Startup Path #2- Sales are Guaranteed at the end because of Crush Club

Click on the Image for Larger View

2. The Narrow Road Less Traveled: (Only 1 out of 10 times this road is traveled and the business succeeds) The Entrepreneur gets an idea, forms a Crush Club of potential customers to replace their assumptions with facts, creates a Minimum Requirements Document, Crush Club “ok’s” plan and then First Draft Business Plan is Written.  In this situation the start-up takes the time to find out the actual needs of a targeted group of people that actually have money to pay for the solution.  In this model, the Potential Customer dictates the type of business that is created and this is accomplished by having Crush Club Meetings where, by the end of the meeting, the person either has a Crush on your Business Idea or let’s you know that your assumptions are not correct.

With this process you don’t need to offer a “perfect” or “whole” product on your launch date… you only need one that meets their “Minimum Requirements,” or in the words of Eric Ries, a “Lean Startup.”  You will be able to add more features or services to your business as you grow and continue to have Crush Club meetings and if at any point in this process the Crush Club stops approving of the plan, the owner can go back to Step 1 and proceed from there to build a business based on customer demand (See Diagram below).   This 5 step process will save you a lot of money & stress because you will find out within the first month or two if you have a real business idea or just assumptions that should not be built on.

Crush Club Feedback Loop- Allows the Owner to "Fail Early & Often" with an Idea

From there you can forecast growth and create the First Draft of your Business Plan and know that you can “Cash Flow” the start-up on the day you launch… how great would that feel?

The choice is yours which road to go down (or keep going down), but if you find yourself currently on the first road, the good news is that you can still get onto the second road because there is an off ramp right ahead.  Just “take a break” from building your business, get out of your office and get in front of the customers… they’ll tell you how to finish building it.

How will you implement this in your business?

Filed Under: Crush Club, Customer Development, New Startup Tagged With: , , ,
« Older Posts