In launching your new venture there’s a raft of advice out there as to how to begin.
But which is best to minimise risk while continuing to confirm your business model and its potential success?
The lean start up approach focuses on whether a product or service should be delivered and furthermore if a sustainable business can be built around the emergent opportunity.
Because the venture is new and the focus is on ‘lean’ the founders develop a ‘minimum viable product’.
From this base you – as an entrepreneur – can build greater knowledge about the product’s possibility, the market and any other information pertinent to help build a ‘repeatable and scalable business model’. This is defined as the research and development phase and can extend up to seven years in the life cycle of a business.
This focus captures significant value to the existing venture and potentially can be applied to further business opportunities.
While this information may help build a more repeatable business, in order to fully deliver a repeatable and scalable business model each of the elements of the start-up should be fully realised and then these elements built into detailed business planning.
Beware though – the Lean Start Up approach may not be for everyone…
Critical elements of a venture are specific to the life cycle of the business – for instance resourcing, marketing and distribution. The entrepreneurial start up team for instance requires a different skills set than that of a team who is building and delivering a repeatable and scalable business model . As a result of this element alone, business planning is significantly different.
For an established business acquiring a start-up this poses a series of challenges. Established businesses may hold differing approached to customer value for example – where start-ups should focus on gaining and building strong informed relationships with these stakeholders. Additionally, there is a risk an established business acquiring a startup will make a series of assumptions based on their business experience which may not be relevant to the acquired entity.
In spite of the different requirements of planning for a lean start up and a repeat business both these ventures are well served by an ongoing entrepreneurial focus. This is particularly relevant in today’s market.
Planning for a repeatable and scalable business model should capitalise on identified relevant elements of the start up approach and use these to inform development of the business planning. That being said, unless the overarching organisation is very risk averse it would be recommended to attempt to introduce all elements of a repeatable business on its launch rather than stagger product or service release.
