Starting Lean: Soft Launches Help Avoid Hard Landings

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by Mike Baer

Adapted from material developed for a Third Path Initiative training module.

A very common story among highly excited entrepreneurs goes something like this: get a great idea, build the product, go whole hog to market, wait and lose a lot of money. It’s equivalent to the leadership anti-mantra “ready, fire, aim.” I call this the “emotional/entrepreneur syndrome” where any action is preferred to analysis and patience.

Contrast that with a less common but much wiser approach. Get an idea, test the idea, check out the landscape, build a sufficient product to try out, go lightly to market, listen, and adjust. Boring? Not at all…unless you just get off on failure.

This approach has been called many things over the years. It’s not new. Soft opening. Soft launch. Lean startup. Trial and error. Jesus put it this way:

For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him… – Luke 14:28-29, ESV

Out of context, I admit but true nonetheless. Take your time and do it right.

Here are the steps I’d use if I was doing another startup. After my initial ideation, testing the market, and market research, I’d:

Develop a Minimal Viable Product

This is a concept not created but made popular by Eric Ries in The Lean Startup. A “minimal viable product” or MVP is defined as:

…that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.” – Wikipedia

… a development technique in which a new product or website is developed with sufficient features to satisfy early adopters. The final, complete set of features is only designed and developed after considering feedback from the product’s initial users. – Techopedia

In other words, don’t try to create the perfect website, application, food, widget. Instead, build just enough, barely enough, the minimum to actually go to market. You will improve and update and complete your product later but for now I just want my car on the track.  Read more

How Does Spiritual Impact Intersect with Your Product or Service?

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It goes without saying that the product or service you develop will be tightly interwoven with your missional goals: social, economic, environmental and spiritual. We can learn a lot from mainstream business about how to most effectively develop products and market share that will turn a profit and create economic impact. We can also learn much from the social enterprise movement and other socially responsibility companies about how products and services integrate with both social and environmental impact. But business as mission integrates a fourth bottom line, that of spiritual impact. In what ways does the product you develop or the service you offer intersect with the spiritual impact of a BAM company?

We asked four BAM practitioners in very different sectors in different parts of Asia to share why they chose their business and how it connects with the spiritual goals for their business:

Extreme Sports Equipment – Wholesale and Distribution

For us it’s impossible to separate our products from the impact we want to have as a business. First of all we want to make sure that all our products have integrity. We use the finest quality materials to make our equipment. Factories here tend to use a lower grade of materials when mass producing this type of equipment. We asked our manufactures to use the highest grade of materials possible and have a good standard of quality control in place. We pay more, but we feel that supplying top-quality equipment is integral to our credibility and our message. We also include graphics and images on our equipment that have a gospel meaning behind them. Every graphic has a story and we include booklets with our products that explain what the images mean and essentially tell the gospel. We are actively engaged with the extreme sports community here, we sponsor competitors and hang out with the people who are into our sport. We’ve started a kind of church among this group, we go where they all gather together and we do a bible study there, we regularly meet with a core group of 20 to 30. We send representatives from our company out as they do product distribution to other cities and they are able to build relationships with community leaders and begin to disciple them. – Jon and Dave

Language Academy – Education

I have a passion for training and my wife loves to write curriculum, so taking over a Language Center was a natural fit for us. It was a struggling company at the time, but we could see how it had potential to make an impact in the Muslim nation we are in. People from all over the Middle East come here to learn English and other languages – we offer five languages all together. Some of our staff work exclusively within our Academy, others teach part-time and very intentionally engage in evangelism and church planting work, much of that out of the relationships they build through the center. Education and training work is a great environment in which to be a witness for Jesus and share biblical ideas since we get to spend intensive time with our students. We also have a children’s language program that mostly focuses on English teaching, since the demand for that is so high. We go into Arab Schools and teach children from 4 to 18 years, mainly immigrants from Middle Eastern countries, many coming from difficult situations. The English language represents hope for the future for them and we get to build really good relationships with whole families. We talk in our classes about religious beliefs, for instance at Christmas we were able to share all about who Christ is. We also get to go and drink coffee with the parents and make friends outside the classroom. – Steve  Read more

The Value You Offer: How to Create a Value Proposition

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by David Skews

 

The value proposition is a clear statement of what value you offer, to whom, and in what way. It is different from a mission statement because it focuses on differentiation, or the compelling reason why customers should choose you and not your competitor.

Over the next few years the forces of competition will intensify – even for BAM businesses. Although there is growing evidence that some businesses can offer a premium product or service and simultaneously reduce unit cost, this ‘increasing returns’ phenomenon is a mainly a characteristic of the knowledge economy (e.g. for an internet based service where the variable cost is very small). Usually a business has only two positioning choices: increase margin by lowering costs and charging what the market will bear, or increase margin by premium pricing based on a distinctive value proposition, consistently delivered, which gives customers a compelling reason to purchase.

A value proposition must be written in clear language using simple words, so that all your employees can work out the things they must do to deliver it consistently. A clear proposition will make resource allocation choices easier for you. When money is tight, you will want to spend on the things which maintain or extend your value proposition. The value proposition will also act as an attractor for new customers – it will define your position in the market and give you a reputation and therefore a brand. It will unify the actions of your board and employees and it will act as a deterrent to competition; the key to becoming a “price setter” in the market because you can then control your margin.

Your value proposition must answer these questions:

What are the specific products or services you are going to offer, including a clear statement as to what is special about your product/service?

What exact needs or wants does it satisfy for customers, considering very carefully things like how will they use it, what will they expect it to do for them, and what is it made up of?  Read more