How I did not become a founder: do’s, don’ts and 1-year challenge
Studying entrepreneurship is like looking at paintings and thinking you’ll become an artist ©
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During the early post-soviet years, eco-friendly habits were mainstream out of necessity. Be it gardening or upcycling, DIY endeavors were an intrinsic part of our everyday life. Who would have thought our bricolage practices would be reinvented as a 4R (reduce-reuse-recycle-repurpose) mantra of green living, and a soviet ‘’avoska’’ would be called a ‘’vintage grocery bag’’ these days? An unexpected shift from need to asset.
It is surely this DIY background and bricolage-way of thinking that have been helping to play with different ideas and to find ways to turn them into impact projects. You never know where scarce resources and a bit of imagination can lead you:
From launching an eco-bulletin with other young green activists within the UNICEF program ‘’Voices of Youth’’ in the late 1990s to …
… assisting the French Humanitarian Mission of the High Schools (MHIGE) on their mission to Belarus and a group of French sociologists doing research on the consequences of the Chernobyl disaster in 2005 …
… organizing a series of workshops on sustainable living and socially responsible business practices in cooperation with the Swedish Institute in 2015 …
… joining Spotted by Locals’ conscious traveling community …
In the meantime, I was looking for a practical solution to invest my time in and got inspired by BottleMatters (a reusable water bottle brand from Russia) over a workshop on social entrepreneurship in Stockholm in early 2016. Great stories behind KleanKanteen and Mizu life made me see it as an absolutely awesome idea to be replicated in my home country.
Hours and hours were spent on developing a business model, a marketing strategy, awareness-raising and action plans, financials. Analyzing different types of stainless steel for water bottles and mugs (with no BPA and other chemicals), comparing international and local producers, supply chain verifications, transportation options, populating databases with contact details of potential partners and corporate clients, ordering first samples for beta testing …
We went public with a project profile on Talaka (a local crowdfunding platform) in March and had another fundraising attempt with Social Weekend (a local competition for social projects) with no success at the end of summer. And then we got accepted for 1-year Social entrepreneurship e-learning program.
Long story short, as per the program schedule, we passed all the online modules and started implementing our marketing plan in spring 2017. Some legal restrictions for online shops were introduced that year, so testing with corporates and proceeding with bulk sales looked like a logical option. And the contacted companies liked S’way bottles and mugs. As ironic as it sounds, it just turned out they were not interested in buying them, though. Not one of them.
The business idea with reusable bottles and mugs was not bad as such and other hypotheses could have been tested. We just put too much effort into all the tasks, inputs, peer review meetings and reports to be submitted within the e-learning program. And I’m glad this didn’t happen to become a fully operational startup. Transporting bottles and mugs the whole way from China was definitely not a good idea because of the huge carbon footprint of imported goods. My eco-friendly initiative was not that eco-friendly after all.
All in all, it still makes a good case to go through do’s and don’ts:
What gets measured gets improved ©
1) Founder’s bias and reference class forecasting
Being over-excited with your own idea has nothing to do with doing business (it equally applies to both mainstream and impact entrepreneurship). Focus on the problem your customers have, not the product you offer. Filling in a lean canvas makes it easy to see any inconsistencies and gaps you might have in the beginning. Reference class forecasting is another powerful tool to mitigate optimism bias and strategic misrepresentation. When we get hyped over business ideas, we tend to only see successful business cases and it’s one of (many) traps to avoid. More on this: The Lean Startup, The Impact Gaps Canvas, LEANSTACK, Innovation: From Plan to Product online course.
2) Planning vs. building a company
Don’t waste time and energy on the endless planning of your startup. There is no need for a business plan, a marketing strategy, etc. prior to identifying the right problem, and creating and testing your functional prototype with potential customers. Not the other way around. The quicker you start checking your assumptions, the sooner you see what works and what doesn’t. Keep doing more of what does work for your customers. And if you are still planning instead of doing, then let’s face it — you just enjoy dreaming. More on this: The Lean Startup, Zero to One.
3) JTBD vs. Persona, Solution vs. Product
No matter what you call it (persona, avatar, end user), you will not be spending time on finding and describing your ideal client anymore after getting to know the JTBD approach. People search for solutions (pain relievers and/or gain creators), not more products&features they do not actually need. More on this: The Lean Startup, Lean Sales, Innovation: From Plan to Product online course).
4) When reusable water bottles and whisky compete
Our assumption was that S’way bottles and mugs could be perfect corporate gifts, but marketing and corporate gifts strategies are set once per year and competition is high. There are simply no reasons companies choose your (awesome) product over pretty much anything else. More on this: When coffee and kale compete, Connected Strategy online course).
5) Validation=paying customers (proof of traction)
Validation is not about people saying you have a cool product (as it was the case with S’way bottles and mugs). It is about people paying for it. And if nobody buys your product (no matter how awesome you think it is), ̶y̶o̶u̶ ̶h̶a̶v̶e̶ ̶a̶ ̶h̶o̶b̶b̶y̶ ̶ your business model is not effective and needs to be adjusted. More on this: The Lean Startup, LEANSTACK).
6) Talk to potential clients early, talk to them often
Populating databases with more and more potential clients and partners without ever reaching out to them was another big waste of time. Never ever ask potential clients whether they like/are going to buy your product. ̶P̶e̶o̶p̶l̶e̶ ̶a̶r̶e̶ ̶l̶y̶i̶n̶g̶ ̶ Focus on what they are/were already doing while trying to solve their problems. More on asking questions wisely: The Mom Test, Sprint (I also enjoy watching Jake Knapp speak).
7) Supply chain verification and product quality
The fact that human rights are being respected throughout the full lifecycle of a product doesn’t necessarily mean that products are of good quality. Two out of six samples we received were defective. And those were paid samples. (by the way, Lean Sales is a good read on lean manufacturing and distribution).
8) Failure vs. experiments you learn from
There is no such thing as a failure (except giving up), we are only testing hypotheses. As in competitive sport, the more attempts you make, the more successful outcomes you get. Companies like Netflix, Airbnb, and Amazon are testing hundreds of hypotheses every year.
Although I’ve been using 2-month sprints for more than 2 years now, I’ve never used this approach while playing with business ideas. Inspired by levelsio’s ’’12 startups in 12 months’’ experiment, I will challenge myself to test 6 impact venture ideas over the upcoming 12 months. It only took me 6 weeks (from idea to beta-testing) with LeanVentures after all.
I only have 2,5 ideas in mind, for the time being, and it feels like going on a bunch of blind dates, but a deal is a deal.
Assumptions to be tested:
- You don’t necessarily need external investment to start building your venture (companies using their own revenues seem to have more financially sustainable business models)
- You only need a couple of months to test your business idea (from idea to testing functional prototypes and collecting feedback aka a ‘’reality check’’)
- Impact ventures can also be profitable (or at least financially sustainable)
Any bets on the number of successful ventures I have by the end of 2021?
Feel free to join the challenge using #LeanVenturesChallenge
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