To find product-market fit it’s crucial that you test your entire business model and not just the technical feasibility of you product. This was the message a few weeks ago when Jakob Svagin from Scion DTU and Andreas Cleve Lohmann from Copenhagen Lean Startup circle challenged the participating hardware startups in Danish Tech Challenge on their value propositions and market assumptions. Here are some insights from the kick off talk when the lean-rubber hit the road.
Running lean is different than “just doing it” (a mystic approach to entrepreneurship based on intuition) and the approach of traditional innovation management (an approach based on plans, specs and waterfall processes with way too long feedback loops). Running lean is neither about chance or planning rather it’s about optimizing learning under circumstances characterized by extreme uncertainty. You have to build to test. And there’s a bunch of things you can do without even building anything because it’s crucial that you test your entire business model and not just the technical feasibility. Sure you need to test your technical solution. But you need to conduct commercial experiments and generate commercial data as well.
Recognize that your big vision is based on assumptions and they all need to be tested. Test your value hypothesis, your market hypothesis, your growth hypothesis – which include sales channels, partners and customers. These are all part of the uncertain context which your technical innovation needs to adapt to in order to achieve problem-solution fit and product-market fit.
You should build minimum viable products (MVP’s) of your actual product. But you should also build and hack MVP’s for how you interact with key partners, suppliers, users and customers. You can do that very early on and long time before you finish your product development (if you ever do). It’s never fun to be sold a bad product, but it’s always fun to be part of building something that can become big, so have an inclusive mindset from the start.
Most likely your potential customers aren’t out there actively looking for you. So the questions you need to ask yourselves are:
- How can you make them care?
- Why is your product valuable to them?
- Do you know their criteria for buying?
Your technical product development might take six months or longer. But testing commercial feasibility can be done in a matter of days and is essential to developing a sustainable business model. So go do the easy stuff first!