The leading cause of start-up failure is not technical: it is building a product that nobody wants. The entrepreneurial method exists precisely to avoid this trap.
2.1Fall in love with the problem, not the solution
The beginner's reflex is to get attached to their solution. Uri Levine (co-founder of Waze, bought for $1.15bn) made it a principle: "Fall in love with the problem, not the solution". As long as the problem is real and painful, the solution can evolve; the reverse leads to a dead end.
2.2Get out of the building: Customer Development
Steve Blank (The Four Steps to the Epiphany, 2005) put the imperative this way: "get out of the building". No answers are inside your walls. Before writing a line of code, you test your hypotheses against real customers: discovery, validation, creation, then scaling.
2.3The MVP and the build-measure-learn loop
Eric Ries's Lean Startup (2011) proposes a loop: build an MVP (the minimal version that allows you to learn), measure the real reaction, learn, then decide whether to pivot or persevere. The MVP is not meant to impress, but to learn quickly and cheaply.
2.4Product-Market Fit
Product-Market Fit (PMF), popularised by Marc Andreessen ("the only thing that matters"), is the moment when the market pulls the product. An operational test: Sean Ellis's 40% rule. You have probably reached PMF if at least 40% of your users would be "very disappointed" to lose your product.
2.5Modelling and measuring
- Business Model Canvas (Osterwalder & Pigneur, 2010): 9 blocks to describe a model: segments, value proposition, channels, revenues, costs…
- Key metrics: CAC (customer acquisition cost), LTV (customer lifetime value, aim for LTV/CAC ≥ 3), churn, MRR/ARR, burn rate and runway.
- AARRR (Dave McClure's "pirate metrics"): Acquisition, Activation, Retention, Referral, Revenue.
The right reflex
Before coding for six months: talk to twenty potential customers. An idea is tested with conversations, a mock-up and a sign-up page, not with a finished product.
Sources
E. Ries, The Lean Startup; S. Blank, The Four Steps to the Epiphany; A. Osterwalder & Y. Pigneur, Business Model Generation; U. Levine, Fall in Love with the Problem.
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