A Method to Test your Startup Idea Faster

There is an old saying in business: If you fail to plan, you plan to fail. Yet plans fail all the time.

Scott Cook, co-founder & chairman of Intuit once said: 'For every one of our failures, we had spreadsheets that looked awesome.'

In entrepreneurship, people go from an idea to a business model. Traditionally, they used to make a business plan for it. That used to be taught even in business schools. 

 

No Business plan survives the first customer contact


A business plan is the worst way to go from idea to business, simply because today, the journey of entrepreneurship looks like this:

30kstrategy-idea-to-businessplan-journey.png

It is up and down, forward and backward, you progress, you regress. Customers say they don't like it. You're building something and can't figure out the minimum functionality and so on. 

Business plans maximize the risk of failure. Why? Let's say you're selling your business plan to your boss, partners, or investors. And the other person says: 'Yeah, I want this!'. Now, you are condemned to execute the business plan that you sold.

The problem is the new ideas never turn out to be like they are in a business plan. Steve Blank, who invented a 'Lean Startup' and 'Customer Development Methodology' likes to say: 'No business plan survives the first contact with customers.'

This is because entrepreneurship is not an execution problem (business plans are meant to be executed), it is a search problem. 

 

Let customers impress you with their reactions through prototyping


The whole idea of search is we design an idea, and we test it. It's a very iterative process. We are trying to figure out what could work and what could not. Only then, the idea becomes and an execution problem.

A hypothesis, embodied as a prototype, beats market research because it can be tested. Customers don’t have to imagine how they would feel when they see a prototype. They’re already feeling it. Steve Jobs, famous for rejecting market research, insisted that Apple designers make and test hundreds of prototypes before deciding on the final form of a new product.

The secret to great prototypes is to design them quickly and cheaply. Music producer Nick Lowe earned the nickname Basher for telling his recording artists to “bash it out now and tart it up later.” You can’t arrange a song theoretically.

You have to try out various elements and make improvements as you go. Same with a product or a business model. The quicker and cheaper the better.

The goal isn’t to impress your customers, but to let them impress you with their reactions, knowledge, and insights.

After you executed the idea successfully, it becomes a management problem. Many established companies today focus on managing and optimizing their internal processes and business model.


📌 Takeaways

- Embrace the fact that your first idea doesn't matter that much, and it's going to evolve.
- Business development is a bumpy road. That's normal.
- Amateurs talk good ideas, while experts talk testable hypotheses.
- Test your ideas with quick prototypes, again and again. I can't repeat this enough.

If you found this helpful, feel free to share it with others.

Much love! 


About the Author

Alex Gilev is a User Experience Strategy consultant with experience leading a variety of complex SaaS projects in B2C, and B2B organizations.