I don’t have anything against a traditional SWOT analysis but recently found myself helping a couple of startups figure out how they are progressing against their business plan and vision. They were less concerned with external market forces like competition or market growth and more trying to figure out if they were on track versus off course. I asked them to create 4 lists:
- Things Validated – Thinking in line with the Lean Startup (order book here) validated learning concept, what has already been validated regarding your product, pricing, sales model, support model, etc? Do you have evidence to support this validation? Gut feelings aren’t good enough to place an item on this list.
- Initial Indications – These are items that aren’t yet validated but you have indications that they are moving in the right direction and are likely to be fully validated in the next couple/few months.
- Identified Issues – Pretty self-explanatory. These things aren’t working and you know it. But perhaps you don’t yet know what you’re going to do about it.
- Still Unknown – Elements of your business plan and vision that can’t be included in one of the above three categories.
The hardest part of the exercise is making sure you cover all important aspects of your business and vision. Don’t forget the “back office” functions or other underlying support functions that aren’t sexy or front-and-center but if broken can have a real negative impact on your success. And if you want to get fancy with the exercise, you can color code or rank the items in each list based on significance. And if the whole exercise takes more than 30 minutes you’re thinking too hard. Think “back of a napkin”. OK, maybe both sides of the napkin.
Once you’ve got the 4 lists, you can use the information in a variety of ways:
- Start taking action:
- Exploit the Things Validated
- Push to validate the Initial Indications (some surprises are probably still be looming)
- Design action plans for the Identified Issues
- Figure out how to gain validation on the Still Unknown
- Content ideas for investor updates
- Helpful guidance to determine if it’s time to inject more funding versus waiting to get more validation (more validation = higher valuation)
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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