I just sent the exact message below to the startups I’m currently invested in. I realize (and you should too) that Lean Startup principles (order book here) should be used repeatedly for refinements and extensions of your product/offering. But a key point I’m trying to make is that Lean applies to various aspects of your business model that require validation in order to be viable and then eventually successful.
I was talking to a couple of you recently and got some inklings of forgetting the Lean Startup principles now that you’ve raised some money and have an initial product in the market with paying customers (most cases). I wanted to stress how important it is to continue your validation using Lean principles. If you feel like the fundamental promise of your product is initially validated, then what about these other things:
- Market awareness and interest via inbound marketing (see related article titled “Inbound Marketing Explained“)
- Sales model (see related article titled “Applying Lean Startup Principles to Your Sales Model“)
- Consumption/fulfillment model
- Support model
- Pricing optimization
Have you validated these other aspects of your business plan? Do you have critical success factor assumptions in these areas that can be validated? (ie – we must be able to ____ in order to be viable). You’re still in the phase of minimal resource to achieve minimal cash burn to be ready for a future Series A round. And when you start pitching for Series A you want a reasonably high valuation to minimize dilution. To get a high valuation, you need to connect the dots (validation) in all critical areas of your business plan. Failing to do so equals risk in the eyes of the investor and the higher the risk the lower the valuation.
So back to my subject line. What are you going to validate during the month of December? Make sure your whole team knows, set the targets and measure progress throughout the month. Then celebrate once achieved, regardless of what you ended up learning.
Wait, there’s much more!!!
The information in this article is just a very small piece of what I cover in my Founders Academy Video Library, which includes more than 35 topic-specific modules and 6 themed compilations.
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