According to the Small Business Administration, the majority of all businesses will fail in less than five years. The largest percentage of failures occurs in year one itself. That means that these startups could not create a sustainable business model before they ran out of resources, time, and money. Do you think if they had more time and money, it would have increased their odds of success?
In designing the lean startup methodology, Eric Ries defines the concept of the Minimum Viable Product. An MVP is totally focused on identifying the right product and the right business model. But is that enough? Although an MVP is an important part of the process, the end goal is not a successful product but a sustainable company.
Hence we should extend our thoughts to go beyond thinking MVP into thinking MSC – a minimum sustainable company. It will take more than a blog post to understand it all, but here is a brief overview.
Runway is the time you can go on without getting paid before you have to call it a quits. Understand your runway and if it is very short, you must first work on extending it.
If you are building a product, but there are services you can provide to keep the revenue stream flowing, do it. The first step is to put the revenue stream on an auto pilot so that it requires less of your time, probably 10 hours a week. The remaining time has to be towards building your product.
Another approach to extending your runway is to launch with minimum add value that you can provide and start to sell immediately. Try to sell before you build so that you have some runway traction.
BUILD MORE LEADERS
As a leader, your key role is to build more leaders who will pick up the baton and run with it. You always need to focus on working ON your business and never working IN your business. As an entrepreneur you are only suppose to market and innovate. If you are doing anything else, you are playing not to lose. You have to play to win. For that you have to take on the most important task of your business. If you do not take that responsibility, no one else will and MSC will become a distant dream.
FOCUS ON ORGANIC GROWTH & INBOUND MARKETING
If you have to drive traffic continuously through adwords, you are fighting a lost battle. With adwords & other outbound marketing activities, you get traction only until you keep doing it & spending the money. The more you spend the more you get. As soon as you stop advertising, you loose the traction.
You have to move out of it and start framing an inbound strategy. It has to begin with content strategy starting with website content, blogging & social media awareness. It’s a long term strategy, but once in place, you reap the benefits for long time to go even if you stop or slow down for a while.
Jinesh Parekh is the founder of a Ruby on Rails Consulting shop, Idyllic Software. They exclusively work with startup’s to help build MVP for them & give them a head start with their entrepreneurial journey. If you want to discuss more, feel free to email me directly at email@example.com. This is not a service I sell and there are no charges associated to discussing ideas.
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Category: Startup Advice