After spending most of my career in startups and entrepreneurial ventures, I advise, teach and mentor entrepreneurs and young companies in launching and growing their businesses.
One of my most rewarding jobs is that of co-director of the top accelerator program at Babson College: the Summer Venture Program (SVP). I have been involved for six years (four as advisor and two as co-director), and we recently completed the 10-week intensive program with 15 startup companies, with 25 entrepreneurs in all.
What’s amazing about this program is what these young entrepreneurs accomplished in two-and-a-half months. If I were to choose one word to describe the program it would be “action.”
My previous WBJ columns discussed how ideas come about, recognizing opportunities, types of market research, and the importance of creating a minimum viable product, or prototype (MVP). Assuming that some basic market research has been completed on your idea and you have determined that there’s an opportunity, the next step is to act: Small steps, not giant ones.
What do I mean by that? You need to take action to get in front of a real customer, have customers try the product or service, obtain specific feedback, and test your marketing message, among other things.
Here are four reasons you want to get your prototype in front of a customer:
Product fit
You want to determine that customers like your product. They like the features, price, performance, size, the colors, etc. You want to establish a base-level product and only add features customers really want. The MVP does not have to be perfect (Remember, development resources are scarce). Instead, you want to get customer feedback so you can adjust your product accordingly. In other words, you can fine-tune it.
Competition
Getting your product in front of a few potential customers early can give you insight into the other products in the market. You ask your customers for this information by using a brief list of questions or providing a short questionnaire. This information can be valuable. Knowing what alternatives to your product your customers have or are thinking about can improve your marketing strategy. You need to know what your competition is doing — what they’re saying, where they’re selling, how they’re pricing — so you can develop the appropriate marketing strategy and tactics. Competitive information is key to fine-tuning your go-to-market strategy.
Messaging
Taking early action with your MVP is one of the best ways to improve your marketing message. It gives you the opportunity to practice presenting (or “pitching”) your value proposition. If these initial prospective customers don’t understand your product clearly and quickly, then you need to adjust your messaging. Pitching early and often enables you to make adjustments quickly, and saves you time and money later when you’re developing your website and other marketing material.
First-mover advantage
Another benefit of getting out into the market early with an MVP is getting early orders for your product. Often, these are just verbal commitments, but sometimes they can be more substantial indications of interest, such as a letter of intent. First-to-market also has the potential for you to find potential suppliers, distribution channels, partners and even potential employees. Getting out in the market early gives you market traction, momentum and confidence that this is a market with potential.
There are three things to keep in mind when you act.
First, take baby steps; small actions with your MVP. Make incremental steps with minor adjustments to your product based on customer feedback. Second, stay very focused; don’t change everything at once. Tweak your product features and marketing message separately to obtain the best customer feedback. Third, keep your actions local. You want to personally talk to customers and get their reactions to your MVP.
What happens when you take action?
Two of the 15 startups had revenue when they entered the Babson College Summer Venture Program By taking action in small, incremental steps, seven of the companies had revenue by the end of the program.
Action does pay off!
Jeff Schiebe is an international adviser and educator in entrepreneurship. He’s associated with Clark University, Babson College and Hult International Business School. Contact him at jeff.schiebe@verizon.net.
