This is a tricky subject, but it will be crucial for your motivation and success. If you make it through, you will achieve the next level in your entrepreneurial career. On the other hand, if you get dissapointed, the world will be missing the opportunity of your seeing your dreams come true. It is important that you know (or at least have an idea) of what is waiting for you.
Failing is a Requirement for Succeeding
The most important thing you need to understand, as an entrepreneur, is that failure will be your #1 teacher. Learning to fail is one of the most important skills a human being can develop. Failure is what makes us stronger, what defines who we are and build up experience.
All success stories you may hear or read about, no matter what century, place on earth or topic, is the result of mistakes, bad and good decisions.
During the first months of your business preparation, launch and in the forthcoming years, your capacity to embrace failure and adapt will definitely be attached to your chances of success.
Failure is simply the opportunity to begin again, this time more intelligently. - Henry Ford
As an Entrepreneur, that is the first thing you need to incorporate into your mindset: failure is a requirement for succeeding. Musicians pack a dozen songs on an album and only one becomes a hit. Painters go through hundreds of canvas until one painting actually is good. Entrepreneurs try tons of ideas until one actually becomes a good one.
Prepare For It
Still, it doesn't mean that you shouldn't prepare. The better prepared you are, the higher will be your chances to make it and reduce the risk of failing. If my future self were to offer me two paths to succeeding with a business: one with a few failures and another one with tons of these, for sure I would take the shorter one. But my "future self" has a major difference compared with me: knowledge.
Knowledge can be acquired in many different ways: books, webinars, browsing the web, from a mentor, a bit of advice from a relative or from actual practical experience. Knowledge is the most valuable resource ever and nowadays, with the boom of the Internet during the past 30 years, more and more is available every single second.
The book "How They Started" has a good pack of Case Studies about how popular online services, products, and companies were born.
While many successful businesses started by just testing things out or from a simple solution an entrepreneur created, business owners agree that being prepared would have made things way easier.
Plans are useless, but planning is indispensable. - Dwight D. Eisenhower
Preparation is key. For decision-making, for the unexpected, for understanding, for pivoting... for everything that may come ahead. Although you can rely on your will power, your enthusiasm, and your momentum, you need "knowledge" to be on your side too.
Let's say you are launching a wedding photography service. You need to understand and know the basics of how the business/industry works. You need field experience, knowledge of photography, and have, at least, a basic idea of how and where to do it. It doesn't mean you can't start unless you have achieved these skills, but chances of success are higher for someone who has been an assistant of a wedding photographer than, let's say: "me, an online business entrepreneur". I could wake up tomorrow and say "I'm a wedding photographer", but if someone hires me, I'll learn the hard way that I'm not (yet) ready for it.
I would personally exclude the preparation time from the actual "startup initial stage". Preparation should ideally be part of your current job, passion or hobby. Reading, watching webinars or attending meetups should be part of your regular schedule and not of the startup phase.
So, let's assume the day 0 of your Startup/Business launch, the day you start working on your MVP.
The MVP (Minimum Viable Product)
I have launched many products during my career. Well, let me rephrase it: "I have launched many MVPs." Many of these while working and being part of a business and many others while operating full time as an entrepreneur.
A Minimum Viable Product(MVP) is a low cost, proof of concept, sketch, test product or whatever name you can come up with for the first thing you need to bring to market. An MVP should be the first objective you should focus on once you have the minimum skills to create or conceive something. It doesn't mean it needs to be a physical thing or a tangible object. It could be, going back to the wedding photography service, a simple "wedding package concept" or a customer service website. Here are some examples:
Service Businesses: A Wedding Photo Starter Package that includes 100 photos (20 with the family, 40 at the ceremony and the rest in different scenarios). You have a good smartphone with semi-pro image quality and could offer it at a low cost as an alternate service for a low-budget wedding.
Physical Product: A phone holder device for people who love working at coffee shops. You could print it in a low-cost 3D printer and bring it to the closest Starbucks and give away for free in exchange for honest feedback after one week.
Online Businesses: An Online reservation system for a local restaurant built on a non-expensive template with Wix and customized in a few hours to test out with a $100 Adwords budget for targetted traffic.
Product designers can easily create concept products using 3D Printers that are available for less than $200.
And the list can go on and on. Those are just some examples of MVPs you can set up with low risk and cost and actually come up with something to bring into the market.
This initial phase shouldn't be longer than one or two weeks. Your MVP should limit only to the core value of your idea and how it can benefit your ideal audience. Its primary purpose is to test the waters and show you the facts. Raw, crude and real facts. From here on, all you need is to face the facts.
Face the Facts
The capacity to face the facts is the #1 thing in common across all successful companies in the world. Kodak thought, back in the 1980s, that digital photography would limit only to professionals and never replace the traditional way. Nokia thought touchscreens were for elites. Blockbuster thought people would pick up DVDs for years to come when Netflix started offering online streaming subscriptions a decade ago.
Facing the facts is not a skill, it is an attitude. The same way that you decide not to lie to your partner, listen to your friends or simply the opposite, facing reality as raw as it could be is incredibly important for an entrepreneur.
And it comes very tight with how likely are we to understand we made a mistake, we failed or we succeded. It is strictly attached to your way of seeing thins and understanding facts.
Passion, self-confidence or personal experience could have been the inspiration source of your entrepreneur venture, but it can easily blur your mind. You need to understand if your product failed or succeeded and digest the results as it is. This is why right after beginning your MVP test, you need to set up your measuring parameters.
Measuring Parameters
There is only one way to know if you are overspeeding with a car: looking at the dashboard measuring speedometer. That's it. One way to know how much fuel you have left: the fuel tank level indicator. One way to know what time is right now: checking on a clock. Measuring instruments indicate the real fact about a specific matter. Time: watches. Temperature: thermometers. MVP success: you need to define these.
Service Businesses: The end payment, reviews, top-selling product, word to mouth marketing...
Physical Product: Usage frequency, the volume of sales, customer feedback...
Online Businesses: Traffic, leads generated, sales, online citations, search engine rankings...
Your measuring parameters will tell you the truth about your results. That's it. Just the raw truth and it is completely up to you what to do later when all the fact data comes into your hands.
If it all went great, congratulations! You hit the nail on the first one! You can repeat the process again and go after the second test or simply leaving everything right as it is. If at some point, just by repeating it, your clients love it, then you have a tested business idea in your hands.
On the other hand, the test could throw up some discouraging results. Going back to the same three samples previously mentioned:
Wedding Photo Starter Package: The clients loved your work, but didn't want to pay your fee in full because the family photos were also taken by many other attendees with their phones. The quality is similar and they are just interested in the ones you took when their ceremony was taking place.
The phone holder device: Some people brought it home and started using it for doing video calls while doing different activities. They didn't find interesting to have it on a coffee where music and noise in the background are overwhelming for talking, but they found it pretty useful at home.
Restaurant Reservation Website: Some visitors went into the website, but not a single reservation went through. On the website analytics, you noticed most of the traffic is from the area around the restaurant.
Up to this point, your test is finalized. Yor MVP went out there, did what you set it up to do and came back with numbers, feedback, and true facts. This phase should all ideally occur in less than a month. The longer it goes, the riskier it becomes. Big failure stories come around projects that overextended MVP features for months or even years of production to later come up with big budgets and disappointing results.
Decision Making & Pivoting
Decision Making and Pivoting is the elliptical path of a lean entrepreneurship venture. It is where you try to come up with the best decision for your project, our product or your new service. It is here where you face the facts and become an entrepreneur. It is the stage where you face the reality of failure and success and fight to overcome it. Your dream brought you here, but often, it is not what will get you to the end. Being realistic will.
Decision Making
You are the CEO of your venture. Your own boss, your own shareholder, and the decision-maker. If it all fails, it will be up to you as same as it it all succeeds. Now, it is important that you don't be afraid to make the wrong decisions. In the end, you will make them all based on real facts.
“Insanity is doing the same thing over and over and expecting different results.” - Albert Einstein
This is why it is so important what we talked about in the previous section: facts. If you make decisions based on wrong or misleading information, it doesn't matter how aligned or solid your direction is. Wrong intelligence leads to wrong results. If your MVP doesn't work now, you need to understand why and work towards fixing those issues.
Once again, and following up the samples previously mentioned:
Wedding Photos: If the clients didn't appreciate the family photos, you could offer the next time to all family members and friends to take part in it. Take the feedback and make it as unique that no-one else can have that so valuable photo for everyone at the party.
Restaurant Reservation Website: Maybe the ad wasn't clear or could expose a specific offer. You could meet again with the owner of the restaurant and ask questions like: "Which is your most popular plate? What day of the week do customers come more?." Knowing it can be crucial for you to create and set up a specific Adwords advertisement to increase the chances of conversions. After it, you can try again.
On the other hand, even if you were focused on one specific direction, you may need to decide to go towards a completely different direction. In other words, you will need to pivot.
Pivoting
If it is not for you, then it is worthless that you continue fighting for it. It is better to know you are heading nowhere early than waiting months, wasting resources and risking other opportunities pursuing something that is not meant to work.
“I haven't failed -- I've just found 10,000 that won't work.” —Thomas A. Edisson
Willing to pivot is as important as willing to maintain the same course. You need to understand it comes with a risk. If you have the opportunity to steer, you are in control.
Pivoting is an opportunity. Pivoting is the chance to steer in a different direction but with the backup and support of all the previous knowledge from the initial MVP.
The phone holder device: Your "coffee shop phone holder" failed. You probably used it every day when you bring your laptop to your Starbucks, but the small test didn't show up some people would do it too. Now, your test came up with results: there is an actual opportunity to come up with a similar idea but for home use. You could interview the "test clients" who used it at home and try to figure out improvements you could come up with a "home version" of your initial product idea.
Useful Resources
If you are right at the very beginning of your entrepreneurial career, then I would encourage you to read The Lean Startup. As many of the topics I have introduced in this article, preparation is vital for setting up your environment and mindset to speed up with the lowest possible risk.
Rand Fishkin "Lost and Founder" is another great read about the ups & downs of starting up an online business.
