Essentially, if entrepreneurs didn’t really believe in their ideas, they would never have the courage to risk their effort, reputation, and money by taking action.
But precisely because entrepreneurs believe so deeply in their idea, they jump into action by investing in creating a business, building a product, and then spending the money to try and sell it. What they almost always overlook is one deadly fact: that their belief is only a guess at what customers want that needs to be quickly and iteratively tested in the market before doing all those other “good” things.
In their Book Nail It then Scale It: The Entrepreneur’s Guide to Creating and Managing Breakthrough Innovation Nathan Furr and Paul Ashlstrom outline the process of creating innovative products that solve problems, targeting and communicating with the right markets and refining your strategy before scaling your business. It’s a guide to perfecting your business plan and expanding your company, in the correct order:
- Nail the pain. Great businesses begin with a customer problem that has a big and monetisable pain point. Avoid the three big mistakes, of guessing but not testing the pain (on real customers), selecting a low customer pain (solution is only nice to have), or selecting a narrow customer pain (small number of customers willing or able to pay).
- Nail the solution. Neither breakthrough technology nor maximum features will assure that “if we build it, they will come.” In fact, NISI recommends starting with the minimum focused set of features and technology that will drive a customer purchase. Success demands testing the solution early and quickly in the market, then iterating to get it right.
- Nail the go-to-market strategy. In parallel with nailing the solution, you need an in-depth understanding of your target customer’s buying process, the job they are trying to get done, the market infrastructure, and a stable of serious pilot customers. Do real tests with real pricing to see if customers will pay you, without being pushed.
- Nail the business model. Leverage your customer conversations to predict and validate your business model. For example, when you think about distribution channels, revenue streams, or the relationship with the customer, ask customers what they expect. Don’t forget a viable financial model of costs, margins, customer acquisition, and break-even.
- Scale it. Don’t attempt to scale it until you have a proven repeatable business model that predictably generates revenue. Only then is it time to focus on the get-big-fast strategy, and the transformation of three key areas from startup to a managed growth company. These areas include market, process, and team transitions.
The book is for:
- Entrepreneurs and anyone who wants to start a business
- Business owners fed up with traditional economic models!
Read/Listen to 15 minutes of all the ‘good parts’ on Blinkist – the App for curious minds.