COVID is Spurring Millions of New Business Applications… How to ensure YOURS is a success!
While Covid has been a terrible time for millions of people, it also, like many other disasters, has created an environment full of opportunity – ripe for new business creation.
According to Francis Scialabba from (a terrific newsletter) Morning Brew, there were 1.5 million new business applications in the US during Q2 and Canada followed the same pattern. These so called “Covidpreneurs” are driving new business formation at the fastest rate in more than a decade (WSJ).
People lost their jobs and said, “What the h-ll – I’m not working anyway – I might as well”. Interest rates are low and there are lots of smart people around to entice into startups.
But, as with any other time in history, just because you start it, doesn’t mean it is going to be a success. It is not an “If you build it, they will come” situation. People start businesses for a variety of reasons and hope theirs is going to disrupt the industry and be super successful. Few do and few are.
I read a quote that really struck me in a newsletter called Check your Pulse, a tech and startups newsletter, written by Sari Azout. Here’s what she said:
“Technology doesn’t disrupt industries. Unhappy customers do. The best companies don’t have access to better technology. They have a better ability to understand people. “
So smart, right? If you don’t start with the customer, your chance of surviving, never mind disrupting, are surprisingly slim. Smart business startups start with the customer FIRST, and before launching, know that they are building a business that offers a solution that customers value. If you know that, all the next steps are going to make sense. If you don’t have proof of market viability and customer buy-in, what do you have?
Recent advances gleaned from research about business startups have led to the creation of the Lean Startup methodology, a scientific method that uses information to navigate through the startup process, helping entrepreneurs cut risk, test and pivot, launch early and iterate often, and most importantly, talk to customers right from the start.
The Lean Method starts with picking a customer to serve, not starting with a product/service idea. It teaches you to look around at all the groups you belong to (cyclists, body builders, grandparents, musicians, gardeners…whatever). All of these groups are potential customer segments to serve, as long as they are big enough.
Choose the ones you know the best and feel like you have the best access to. Then, think about all the problems you face as a member of that group. Or talk to a few other members and see what problems they face. I’m sure there are a lot of you facing the same problems. Just make sure that you can differentiate between a problem that offers a business idea and one that offers a business opportunity. Frankly, there are a lot of problems out there that are just not solvable, so the ones on your list need to be actionable. They also need to be ones that people are already trying to solve or would pay good money to someone to have solved. If it is just a “nice to have” vs. a “need to have”, your market is going to tell you they want it but when the time comes to put their money where their mouth is, it’s not going to happen.
The next step in this process is to go out and talk to the people who are already trying to solve this issue. If you can’t be 10X faster, cheaper, lighter…just better than what is out there, move on! If you can be exponentially better, then you need to use these early adopters – these people who already trying to solve it in a sub-optimal way – to help you refine the solution.
Every time you have a hypothesis about your solution, you’re going to put it out there for comments. Unlike the old days when no one launched a product or service ‘til it was perfect, the new, better way is to test every single assumption – the customer, the market, the problem, the solution, the name…everything. If you ask people to help prove your assumptions wrong, you’re going to learn more than if you ask them what’s right, and every bit of feedback is going to help you refine and test your idea.
And every assumption that has been proven wrong is going to send you in a different direction. It’s called pivoting and it is a key part of the startup journey. It is going to happen at every step along the way, because you’re going to test at every step along the way. You come up with an assumption and test and pivot and assume and test and pivot again. In doing so, you make necessary adjustments before investing lots of money and time and energy. The process helps you cut the risk before you get in over your head or make moves that are plain out wrong. Some say that this method lets you fail sooner. Because if you fail sooner, you can learn from that failure and take a different path next time.
The best part about the Lean Startup method is that the customer helps you build the product that THEY want. What did I say at the beginning? Unhappy customers disrupt industries. So, you’re finding those unhappy customers and working with them to create the solution that would make them be happier.
Start with the customer and really listen, and the you’re going to be one of those Covidpreneurs who comes out on top!