Quick to Market – Rapidly Launching Businesses

What does it really take to start a business?

Many people believe that you need a complex business plan, lots of
funding and a marketing budget to get to market.

New thinking is focused on looking at the minimal critical set of
conditions that will lead to a business being successful.

The idea of “lean” comes from a movement in the early 90’s that
focused on saying that a business process should be totally customer
focused and anything that does not add value to the customer must either
be eliminated from the business process or re-engineered.

If we apply the same thinking to the entrepreneurial process we must
realise that the only think that possibly adds value to the customer is
the product and that a viable product is half the battle.

At a minimum, a product is a product when it is:

1. A valuable item or service

2. A mechanism by which this can be transferred both

   1. Physically – (i.e. the logistics of buying and selling the
      product)

   2. Financially – (i.e. the logistics of paying for the
      product)

3. With a price

4. That is available to be sold (i.e. it is promoted)

A product gets transferred when there is a match between the price
and the value or utility that the buyer perceives.

The new thinking is to develop a basic product, to launch it using
the legion of tools that are available out there and to – based on
customer feedback – further develop the product rapidly, adding new
value to customers as we go along. You can try launching another product
to the same base – and if it works then run with that. Sometimes this
may even mean the death of the first product depending on growth and
development.

The same idea applies in manufacturing, retail or any other industry.
Start a basic store and build out according to what customers need and
want. Start making a basic product and develop from there.

The key to this methodology is two-fold – developing and launching a
product quickly and being adaptive to what customers want – even it
means totally changing the business. It also means that you need to
retain customers and be close enough to them to learn from them.
Learning may involve trending, statistics and other usage oriented data
that gives you an idea of what excites, frustrates and generally
addresses the needs of customers. It is also important to understand who
those customers are. You may find that you are speaking to a customer
segment that you never anticipated and that this dictates a new approach
to the market segment, new features and new benefits.

A key element is to watch out for in customer feedback is that the
customer feedback methodology cannot rely on the average. By the time a
trend is average – it is too late to do something about it. Every new
type of query or complaint has to be dealt with – in order to spread the
average out. To only start responding when a trend is “average” is way
too late.

To add a small benefit may require a whole new way of thinking about
the business. You may find that people expect support for their product
and you have to invest in call centres to make it work. You may find
that in order to make a product more usable you have to abandon all the
original designs and refocus. This investment is worthwhile and will
keep propelling your product into new directions.

It is also much easier to raise additional funding, support and
development when a product has some level of success and can be shown to
appeal to a target market. Investors like investing in an idea or
venture that has a potential and to see how their money can be used to
take a development further.

This is where marketing meets entrepreneurship in the way that it is
supposed to be.

So key success factors

1. Get a product. Think about things that you want or that you know
   that others want.

2. Get it to a stage where it is viable to launch and price it so
   that people pay for the value received (not necessarily the money that
   you invested in it)

3. Launch it to some potential targets markets

4. Get feedback on what is being used, how the product is being used
   and what its value points are to the customer

5. Develop these further into the same product (remembering that it
   increases the value) or into separate products.

6. As the business grows, invest into the growth areas – by adding
   people, processes, managers and capital into areas that will increase
   the value to customers.

7. Once the product is perfect – find new ones and only develop in
   small increments (at small additions to pricing and value).

A lot of large corporations have failed on the last point – which is
to keep innovating with new products into new markets – but to stop when
it works.

When expanding there are a couple of choices including vertical
expansion (same industry – up and down the value chain), horizontally
(different products) or geographically. While it is naïve to think that
you can do only one or the other – it is important to realise that you
need to expand and be thinking about it. While a product is being
perfected, you want to stay within one geography – as it becomes mature
you want to expand into as many markets as you can. When it is present
in all markets i.e. all your customers are happy with it – because you
kept on adapting it – then you want to focus on introducing additional
products, following the same growth path – noting that distribution
should be easier as you have already developed these channels. The
corporate focus is then on seeking to take over competitors and to stay
ahead of the curve by looking at innovators in the sector that could
challenge the market and bringing them into the scope of delivering
future value to their customers.

Another key aspect that this highlights is that a business constantly
needs to re-invent itself. Every day is an opportunity to re-create the
business and to get it to a new level. Every customer interaction must
add to an understanding of the business to build a mega business and for
the business to keep on satisfying its customer. Every day a business
gets to “bet the farm” on tomorrow. There is no recipe for success – it
requires the constant re-invention and change to get to the next
day.