February 2020

Would you marry someone you never met or dated?  No?  Then why would you start a business without knowing who your customers are and what they really want?

No entrepreneur wants to waste time and money on a nonviable company.  If you are thinking about starting a business, the most important question is whether you should start a business.

Bill Petrovic (workshop chair and mentor, SCORE Indianapolis; past vice president and treasurer, Roche Diagnostics) recommends using the lean startup method to answer that question.  It is an efficient method of approximation for developing a successful business model.  Make your best guess of what a successful business looks like.  Ask people whom you think are your potential customers what they think about your guess.  Adapt your guess to the feedback you get from those people.  Then ask again.  Repeat.  If you should start a business, this process will likely converge on a business model that profitably identifies your customers, what they really want, and your ability to provide what they really want.

Start the process by developing something simple to sell (a product or service).  This minimally viable product should include the fewest features that you think early adopters will buy at a profitable price to solve the core of some problem they have.

Then get out and do a reality check.  Talk face to face with at least 100 potential customers and see how they react to your product.  Include people who will pay for the product or who will influence the decision to buy.  If you are selling something for dogs, go to a dog park, not to a library.  Talk with people yourself, don’t delegate this important interaction to someone else.  Ask open ended questions.

Does solving this core problem matter to them?  If so, would they be willing to spend money to solve the problem; how much?  Will they buy your product now, as is?  What do they like and dislike about your product?  What additional features would make your product more attractive to them?

If this core problem doesn’t matter to them, they are not your customers.  But don’t waste this conversation; ask what problems do matter to them.  You might be able to develop something else for them.

After sequentially adapting your product to several rounds of feedback, you may have a product that potential customers really like.  When you have all of this information, develop a value proposition, a description of all features and benefits of your product that will induce customers to buy it.

Then worry about production costs and business partners.  Can you manufacture and distribute your product for less than the selling price?  Can you sell enough to make the profit you want?  If you like the answers to those questions, you are on your way to starting a successful business.

Several tools are available to help with this process. For example,  Mr. Petrovic has kindly provided the slides of his presentation.  Udacity offers a free online course on the lean startup method.  A lean startup template is available.  By appointment only, a librarian on the 4^th floor of the Indianapolis Central Library will show you company business plans related to your interests.

Thank you, Mr. Petrovic, for helping the business community create jobs and for sharing your extensive expertise with us!