In 2016 I got accepted into the Meltwater Entrepreneurial School of Technology (MEST). MEST is an institution dedicated to training, mentoring and investing in world-class tech entrepreneurs in Africa.
In my time at MEST, I have learnt so much about startup formation. From extensive reading, listening to teaching fellows/established founders, discussions with colleagues and guest lecturers, I have come to see startup formation in a new light.
One thing I have learnt is when building a startup, approach the problem like a scientist trying to establish a scientific theory.
I will explain.
First of all, let’s define a startup. According to Eric Ries, author of The Lean Startup,
“A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.”
The keywords are ‘new product or services’ and ‘under conditions of extreme uncertainty’. Here the definition of startups is not limited to software companies, or based on the size of the company. It is what a business does and how it is doing it.
This implies that conventional businesses that have been long validated, such as car sales, renting out apartments, etc are not startups.
Because a startup deals with a new concept or method, you need to determine that the idea is one that will be accepted widely?—?widely enough for it to become a viable business. This is called business/market validation. It is also what I liken to ‘a scientist trying to establish a scientific theory’.
In science, establishing a theory goes something like;
- Ask a question
- Research
- Hypothesize
- Experiment
- Analyze results
- Draw conclusions
When building a startup is approached in this manner, failure rate is low.
What is the problem you are trying to solve? This is where you ask questions. Ask why it is being solved in a particular way, and why no one is giving a more optimal solution. Ask why so and so method is not being used, ask a lot of questions. Find out the answers to this questions by carrying out extensive research and interviewing people you figure need a better solution.
If you go through these steps, whatever proposed solution (hypothesis) you come up with will be better than one assumed all by your lonesome.
Unfortunately, most startups begin by the founder(s) having a ‘brilliant idea ?’, going ahead to gather resources and executing without any validation. This idea is usually executed without carrying out even the slightest user research to figure out if the product/service solves an actual need.
Here are critical questions that you should ask before building the solution;
- Is this a problem enough people have, or is it a problem peculiar to me and a few people?
- Will people pay for this solution?
- Will the amount people are willing to pay ? number of potential users be enough to sustain this business?
- Is this the best way to go about solving this problem?
- Why will people use this solution as opposed to using the existing alternatives? What’s in it for them? How is my product benefitting them?
The best way to find answers to these questions are by carrying out extensive interviews. Customer Development Labs has a .
A lot of times, our ‘genius’ ideas are not realistic or are not applicable to our target markets. For example, a product that sells music streaming to customers in a market where music is already given out for free.
The best way to determine if this is a problem that will scale will be to treat it like an experiment and validate, validate, validate.
Validation is not a sure way to prevent your startup from being a miss on the market, but it sure helps to build more viable solutions.
