How to Build, Measure, and Learn by Robert Johnson Early Stage Start Up Validation

What can you do in early stage business in order to hedge against failure?
Human beings are exceptionally good at creating cognitive biases. 
Entrepreneurs are exceptionally good at only looking at the things that confirm their bias vs. challenging it. 
#1 reason for failure is confirmation bias.
- extract negative feedback. 

Build - Measure - Learn : Look at scientific method approach. 
Everything is an assumption
Which assumption, if wrong, would kill my business. 
Identify the largest risks
Build experiments to test those risks
Lean and Improve, or Iterate
3 Largest Risks
The problem is actually real - make sure you are solving a REAL problem. 
People actually care about your solution. 
How is my solution 10X better than the existing solution. This will help you change human behavior. 
The numbers work to make it profitable. 
Minimum Viable Product. 
What is the easiest, smallest technology, or best thing to do to test your idea.
Concierge MVP
Do it “by hand” 
Not Scalable
Examples: Zappos - bought 10 pairs of shoes and tried to sell them on website. 
Analogs and Anti-logs - recommended book Getting to plan B
Find other products and companies and answer these questions
How much are they selling? 
Are they profitable? 
Who are their customers? 
How are the customers using the product? 
Are their revenues increasing or decreasing? 
Do the customers like/ dislike the product? Why? 
In one sentence, why is your product better? 
If they’ve failed, find out why and how you can avoid the same failure. Can you? 
Landing Page Tests - Use Buffer it lets you know when majority of your followers are online and active and most engaged. 
Create a Split test - 50/50% and test two ideas. Great for testing pricing models. Helps you measure customer acquisition cost. When you run split tests ONLY CHANGE 1 variable. 
Recommended Tools 
WordPress
google analytics
optimize press
unbounce
Customer Development - The Problem Interview
Ask 10-20 potential customers (Steve Blank’s 4 steps to the epiphany)
What are the 3 largest problems in your business today? 
What’s the most difficult part about x? Can you walk me through the last time it happened? (x= the problem you’re trying to solve)
How much does this problem cost you ( in terms of time, lost customers, lost revenue, frustration, etc.) Helps you price your product. 
If you could wave a magic wand and the problem would instantly be solved, what would the solution look like? 
Use your customer’s own words to present your value proposition and market your product. 
Customer Development - The Solution Interview
Ask 10-20 (preferably different) potential customers: 
Walk them through a “day in their life without your product.” - pausing and prompting for understanding often. 
Walk them through “a day in their life with your product.” -Pause and prompt
How does it compare? (gauge their emotional response)
Don’t make this a sales call. Look at it as information gathering only. 
Customer Development - Price Anchoring Strategy
If the product was free and available today, would you implement it and immediately use it? 
If the product was (10X reasonable guess) and available today, would you implement it and immediately use it? This makes them name a number that is reasonable to them. They anchor the value of your product and tell you how much to charge. 
Customer Development
Do NOT try to sell them
Digress if you think it’s valuable
Write down common phrases (for marketing - word for word)
Ask questions that are objective and measure things - not opinions
Use the mom test - If I asked this question to my mom could she invalidate my hypothesis without knowing it? 
Always thank them for their time and ask for referrals
Pauses = Gold : ask them where hesitation comes from. 
Where’s the Buy-IN? Best to worst order of getting people on board.
Pre-orders
Purchase Orders
Signed LOIs
Confirmed future Meetings
Email Addresses
Clicks

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