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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

Helping Entrepreneurs Thrive: The Power of Entrepreneurial Ecosystems

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If you have been in the entrepreneurial world for very long, you have likely heard the words “Entrepreneurial Ecosystems” pop up more and more in the last few years. And for good reason! Ecosystem theory has begun to change the way we think about entrepreneurship in general with the Kauffman Foundation, CoStarters, InBia, and others leading the way in the US. Ecosystem thinking is also transforming the way we do BAM, in that the development of entrepreneurial ecosystems is understood more and more as a powerful way to foster local business ownership, impact economic development, and expand the influence of the Kingdom in the marketplace of local communities around the world.

So, what is an Entrepreneurial Ecosystem?

Generally an ecosystem is an interconnected, interdependent network of elements, living and nonliving, that make up a supportive environment for a particular type of creature or entity. The word “ecosystem” is a biological term, originally used to describe the environment of a type of animal (or group of animals) that enables it to thrive. So a prairie could be an ecosystem for foxes because it provides other foxes, prey like mice, food for the prey like seeds, water, predators that inspire defensive behaviors, a favorable temperature, sunlight, a place to live, etc..

Outside of biology, the word ecosystem has been very fluid in its meaning. It can apply to a lot of different kinds of networks, such as networks of similar organizations, political environments, or ministry connections. Even the term “entrepreneurial ecosystems” is sometimes used to describe global networks across particular industries, networks of BAM practitioners, or networks of entrepreneurs in a local context.

For our purposes, and the purposes of this discussion, we will use the term “entrepreneurial ecosystem” to refer to the local networks of entrepreneurs, business leaders, local investors, and mentors in a single community or local area. For most entrepreneurs, most of the emotional support, resources, and customers come from such a local environment. It is the elements in that local environment that, when interconnected and supportive of entrepreneurs, allow entrepreneurs to thrive. Elements of that ecosystem can include resources like knowledge capital, other entrepreneurs, established businesses, places to operate like co-working spaces, markets, and even cultural attitudes.

“Building” an Entrepreneurial Ecosystem

So if entrepreneurial ecosystems are our focus, we may rightly ask how one “builds” an ecosystem? In reality, ecosystems are never really created. Every community has some kind of environment or “ecosystem” for entrepreneurs, just not always one that is conducive for thriving. Debilitating competition from big business, resistance from banks and other lenders to lend, lack of knowledge resources on how to start a business, and a culture against risk-taking or profit-making can all conspire to make entrepreneurship difficult. As a result, a potential entrepreneur, even if he/she had a great idea, may never attempt to start a business, not because they lack ideas, but because they don’t know how, don’t know how to find resources, and (perhaps worst of all) feel all alone. When conditions fail to support entrepreneurs in an area, great ideas die untried, and solvable problems remain unsolved.  Read more

Business Response Plan: From Intensive Care to Recovery

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In Part 1 of this blog, we identified four stages you can take to proactively lead your organization through the uncertainty and down the road to recovery.

Once you have taken care of the most urgent tasks in the “Emergency Room” phase, it is time to start treating your business to lead it towards longer term stabilization, recovery and repositioning.

2. Moving through Intensive Care

Main Priority: Address the unhealthy areas in your organization and enlist the larger organization in your response.

Establish stakeholder communication plan

During times of uncertainty, increased communication is vital.

•Who are your key stakeholders?

•How often should you be in contact?

•What is the best media and approach?

Implement employee care & development plan

During times of crisis, more care and attention is needed, and development challenges are available.

•What current needs are your employees facing?

•Who can you give development challenges to?

•How can you build your culture during this time?  Read more

Business Response & Recovery Plan to COVID-19

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A process to lead your organization through uncertainty and down the road to recovery

If your business has been hit hard by the COVID-19 pandemic, we recommend taking immediate action. Don’t “wait and see” what might transpire.

We have identified four stages you can take to proactively lead your organization through the uncertainty and down the road to recovery.

Our Core Assumptions

  • The spread of this pandemic will lead to major disruptions in almost every industry.
  • A “wait and see” approach could be destructive –prepare for the worst and hope for the best
  • No one can predict the future. A systematic and agile approach is needed.
  • Every customer and employee is experiencing some level of stress, anxiety, or fear. Strong values-based leadership is needed
  • No business will remain the same. The disruption will create opportunities for retooling or repositioning for those that are proactive.

 

1. Getting Started in the Emergency Room

Main Priority: Help your leaders and organization recognize the urgency of the times, align to secure the safety of stakeholders and stop the financial bleeding.   

Here are some activities for the “Emergency Room” stage of a crisis:

Rally Key Leaders

 Rally key leaders with a wake-up call and clear sense of urgency

 Avoid inaction and a “wait and see” approach

Key Questions to Answer:

What is a realistic picture that recognizes there is no certainty on when things will improve?

What will need to change with your communication and meeting cadence?

Set a Baseline

 Determine clear financial picture around cash flow, profit/loss, etc

 Identify cost cutting measures

 Determine worst case scenario for supply chain, project schedules, and other operational critical areas

Key Question to Answer:

How deep can your cuts go without inhibiting your ability to recover once stable?  Read more

What Advice Would You Give to BAMers Going Through Covid-19?

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by Sam Cho

What advice would you give to BAM entrepreneurs going through the Covid-19 crisis?

I asked this question to various experts in business and mission in my network (mainly in the Korean BAM network). Twenty people responded with advice, including several BAM practitioners, several entrepreneurs, four business professors, a missiology professor, and two top-level executives at global companies. 

What follows is a summary of their opinions and advice. We hope it is helpful for BAM practitioners in the current situation.

Survive and Learn

  • Increasing liquidity is critical. Survival can rightfully be the main theme during this period. Discounting the price of services and products only to cover overhead cost is just fine. You do not have to make profit during this period but just to make money enough to float. Discount accounts receivable is an option too in order to attain cash. Negotiate your accounts payable with your suppliers to cut down the amount owed for better liquidity.   
  • It may pay off to make an extra effort to search for government support packages like long-term loans, subsidies for foreign ventures or extensions of payback periods. Don’t overlook this possible opportunity. If your loan is on a variable-interest rate, try to renew the loan on better terms. 
  • If you survive this time, you need to earn a lesson about risk management. Many companies usually have a one-month cash reserve in the case of no sales coming in. Running a BAM business abroad means relative lack of available financial resources in difficult times. Remember that often when it rains, it pours – and not just during crisis like Covid-19. Building up a three-month cash reserve is a must; you may need more depending on the volatility in the area and industry you are in. 
  • Many BAM missionaries and tentmakers working under a mission agency often do not have (enough) donation-based support and rely on their living from business or job income, which is positive. However, for times when business is difficult, it might be advisable for Mission Agencies to build a common contingency fund or encourage more fundraising for these workers.

Renew Intimacy with God and Family

  • We could lose our daily devotional routines and sense of intimacy with the Lord from the daily busy-ness of business life. Crises such as this can lead us to return our heart back to the Lord and open a door to be near to our Lord again. The Lord always responds to our prayer in trouble, even when that does not mean the survival or prosperity of our business. 
  • You can ask your friends to pray together. If you do not have a prayer group, you may start one so that you can have a group of people you can talk to and pray with. Times of trouble are really a good chance to ignite passion in the group. Like-minded businessmen or women or financial supporters from your mission or sending church members could be good candidates for the prayer group. 
  • If your business is slow or has a temporary shutdown, you can spend that time with your family. Many BAMers often lose rest and time with close ones like the spouse or children. God may want you to slow down and to come back to your loved ones. True rest can give you energy and creativity, and true rest comes from intimate relationships with the Lord and family.  

Read more

Practicing Jubilee Through Entrepreneurship

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by Stu Minshew

Last week, I shared how Michael Rhodes and Robby Holt’s new book, Practicing the King’s Economy: Honoring Jesus in How We Work, Earn, Spend, Save, and Give, challenges readers to consider ways to provide employment opportunities for those on the margins of society. Throughout the world, we are surrounded by those in need. Many individuals, and even entire groups of people, live on the margins of our society, including racial or ethnic minorities, low-income communities, single moms, the elderly, and those who have served time in jail.

As Christians in business, we are called to provide opportunities for those on the margins to build equity and take part in Christ’s abundant provision for His people.

My last post discussed shifting from a soup kitchen mentality to a potluck mentality, equipping us to more effectively walk alongside those on the margins.

Today, I want to explore another concept from Practicing the King’s Economy, unpacking what the Bible says about equity and the concept of Jubilee. As Christians in business, we are called to provide opportunities for those on the margins to build equity and take part in Christ’s abundant provision for His people. I’ll also discuss specific ways that entrepreneurship can create pathways to equity for those on the margins.

Jubilee and Restoration

To show God’s plan for everyone to have an equity stake in His economy, Rhodes and Holt go to the Book of Exodus. When the Israelites disobey and are sent to wander the desert for forty years, God uses this time, not only to discipline them, but also to show them what His economy should look like. As He provides manna, God shows them that He is a God of abundance and provides enough for everyone. At the same time, those who try to store up more than they need find it rotten and full of maggots the following day.  Read more

The Marketing Value Proposition: The ‘Golden Rule’ in Action

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by Bill Westwood

Ever since I left school in 1974 and joined the marketing department of a major (unfortunately now defunct) motor manufacturer, I have loved marketing. It was the genesis of a lifelong passion for the business world and happened to broadly coincide with the start of my faith journey too. Not that faith and business are separate journeys; it’s a partnership made in heaven. Unfortunately the business and ecclesiastical worlds that we inhabit today all too often collide in conflict and misunderstanding. For that, they are both the poorer.

I will never know whether or not I would have been a force to be reckoned with in marketing (although I suspect not) because somewhere along the way I got lost and became an accountant instead! But finance did teach me how companies worked, and when I finally got to manage a business, it was a big help having a ‘numbers’ background because it’s the numbers that tell the story of the value that a business delivers to its clients. Value fascinates me, and if you are in a frontline commercial function one of the things you learn pretty quickly is that ‘everyone understands cost, but not many understand value’. I believe that value is not only at the heart of business; I shall show how it’s also at the heart of the fundamental biblical narratives of creation and redemption too. In fact it’s at the heart of life itself. Read more

Why BAM Training is Important: Adding Value to the Entrepreneur

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by Mark Plummer

Making a business work is incredibly satisfying and exciting. Even when a business fails, a resilient entrepreneur gets up and goes at it again having learned from their first experience. Business is an incredible process where creativity, tenacity, risk and hard work can bring financial fruit and a broad impact.

God instructs man in Genesis 1 and 2 to be fruitful and multiply, to work the land, to create and essentially to ‘add value’. I believe business falls under this ‘creation mandate’ – and what an amazing process to be involved in!

I am also quite passionate about training. I believe that preparation and training can be the difference between failure and success, and I am all about hedging towards success. This is particularly true for the entrepreneur starting a business in an emerging economy of the world where there is so much to learn and so much to consider. Read more

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: Read more

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