If you are thinking about creating a startup, do your homework and learn about lean startup. Don’t spend six months coding a product; prove that people want to buy it first.
Have you ever thought about creating your own business startup? Perhaps you are a great programmer with an idea for the next Twitter or Facebook. Maybe you have an itch you need to scratch. Or maybe you just want to learn what it feels like to be an entrepreneur.
Go for it! This is a great time to build a startup, and there is no substitute for just doing it.
To move your business forward, you have to learn. Just as agile prescribes building the “simplest thing that could possibly work, “lean startup prescribes building the “minimum viable product” or MVP. You have to constantly ask yourself, “What is the absolute least I can build to test my next business hypothesis?” If you prove your hypothesis, go further in that direction. If you disprove it, you pivot into a new direction. Just as with agile iterations, early cycles of build-measure-learn should probably take a week or two, not six months.
These principles apply whether you are a one-person bootstrapper or a VC-funded hotshot. There is simply no reason to build something until you have proven that people will buy it and that customers will pay more than it costs to acquire them. Even though you are probably more comfortable programming, get the selling right first. I can’t stress this enough: spend your upfront energy proving that you can make money, instead of writing code.
Just as agile strives for tight iterations for software development; lean startup strives for a tight cycle of build-measure-learn. Instead of spending six months building something that you hope customers will buy, lean startup suggests building the smallest thing that you can measure effectively to learn if you are moving your business forward or if you need to “pivot” in a different direction.
The most important business question is whether or not people will buy your product; so instead of building it, make a webpage with a “click here to buy” button and see if you can get people to click on it. If people click the button, then you ask for their email address to let them know when the product will be ready. If nobody clicks on it, then are you not happy that you did not build the product?
Think about that for a second. That Big Idea of yours; how long would it take you to build it? Six months? A year? More? Have you proven that people will pay for it once you build it? How long would it take you to build a simple webpage describing your product, selling your product with a “click here to buy” button? A day or two? If you can’t sell it, why build it?
On the other hand, if the cost of acquiring customers is greater than what you can charge those customers, then you will fail, no matter how great your idea seems. In practice, online businesses that would likely be found using very common or general search terms are incredibly difficult to pull off, because those search terms are expensive.
There is no reason to guess; you can prove whether or not people will pay a profitable price for your product before you even build it by creating a landing page and paying to drive traffic to it. If you can charge more than it costs to drive traffic, you have a winner. If not, it’s time to pivot. That’s lean startup in a nutshell.