As you may be aware, we have been in the throes of designing a piece of software that will provide customers direct access to field marketing and promotional staff, along with all the associated services you would expect with deploying a team through a field marketing agency; this includes features such as graded peoples selection, training, data collection, reporting etc. to mention just a few of the features to be included.
On paper the idea looks like a ‘Go-er’ its features are unique (to the best of our knowledge), it will be hard to replicate (as specific partnerships are required to make it a success) and there is a market looking to service itself, as opposed to using one of the common routes such as appointing an FM agency directly .
Understand and Build it!?
So where to go from here?
Firstly we decided to take our time and scope out the product considering all the implications of its development. We knew that building it wasn’t going to be a problem, as we had done similar projects before, but ‘how we were going to sell it’, ‘what we are going to charge’ etc. are all questions that were unanswered.
In order to proceed we needed to take a full considered assessment of the idea, so after much discussion we decided to follow Bill Aulet’s Disciplined Entrepreneurship – 24 Steps to a Successful Start-up. A quick look at the picture above and you can see quite clearly the process to be followed.
But to what end? Hopefully a decision based on the learnings gained from completing each step, and to avoid wasted time and effort. In reality we needed to answer the question ‘is this product worth developing? and will customers pay to use it?’
Disciplined Entrepreneurship seemed ideal, as it is designed to make you question your idea and challenge your preconceptions.
The books’ 24 steps are broken down into 6 sections highlighted in the picture below; each step has detailed instruction on how you should approach answering the question. Some are straight forward, whilst others are extremely difficult to answer. It is a thorough process and really makes you think. The book is comprehensive and well structure giving you guidance at every step of the way.
BUT, it took us several months to work through the 24 steps and a great deal of brain power to analyse some of the tasks required to test the validity of the product. Mark my words “it is hard work following this process”, so much so that you sometimes question why you are bothering at all; but, and it’s a big but, if you persevere you will get a better feel for the size and shape of your ambitions and whether they are truly attainable.
In order to give you a taster of how this book might be useful I have highlighted two of the steps we completed and the experience we had trying to answer the question. This is only to give you a flavour, as to write up fully would take a book itself.
Step 2 – Select a Beachhead Market
In this section you are required to select between 6 and 12 market opportunities and set the task of deciding on one to pursue. Once this is accomplished you are then to further segment that market to determine the beachhead. The principle being that “…by choosing a single market to excel in, your start-up can more easily establish a strong market position, and hopefully a state of positive cash-flow, before it runs out of resources”.
The concept of selecting a beachhead allows you to get a foothold for the business to grow. This makes absolute sense in my opinion. The book also suggests that you ignore all other paths at this stage stating that an ‘inability to focus on one sector and trying to service multiple actually puts a new start-up at a disadvantage’; fair point again.
In our particular case we chose field marketing agencies. This appeared to be the obvious choice and a clear market for the new software to be launched into; however, this concept did not last the 24 steps. During the process we moved our thinking to focus on customers who wanted to deploy their own field marketing/promotional operations directly. This change can mostly be attributed to ‘less competition in this sector, more potential for return (£) and greater opportunity for growth through scalability’.
Step 23 – Show that “The Dog will Eat the Dog Food”
Love this phrase, and very relevant it is too.
This step requires you to demonstrate quantitatively that customers will pay for your minimum viable business product (MVBP) and develop metrics to indicate the level of ‘word of mouth’ MVBP is creating amongst customers.
The idea here is that you road test your MVBP (a minimum version of your product) to customers and assess whether they are willing to pay to use it. The purpose is to test that your assumptions are correct and that customers will buy it.
During this process you are not too worried about the actual price a customer will pay, but that they are willing to pay, and would they recommend the product? The data collected from the customer encounters allows you to reassess your position and realign your product to meet their need.
In our instance, we did not get to the stage of putting a prototype in front of a customer; the reason? Simple, we had already established that the cost of taking this product to market would be too expensive and the returns would take too long to recoup.
So had we failed?
So, what was our conclusion? Well the process has led us to a cross roads; to develop the product it will cost a considerable amount of cash, which will take time to show a decent return. So without partners to shoulder some of the strain the product isn’t viable at this stage. It is a shame, but by conducting the fact finding process methodically we arrived at this conclusion in a considered manner.
But there is still hope, we have decided instead of going headlong into developing this product, we have identified a similar product opportunity but in a different sector; one that does not require onerous partnerships and will return revenue sooner than our original idea.
So, in this respect, the Bill Aulet’s Disciplined Entrepreneurship cannot be faulted. We tested our idea by taking a long hard ‘methodical’ look at the opportunity and we changed the plan based on the findings. Are we pleased we didn’t plough headlong into the products development? Yes I would say so. Thanks Bill…your hard work is much appreciated.
An idea for the future might be a shorter, say 10 steps checklist designed to test the top line validity of a product of service, before delving into the depths? Just a thought…
It’s a great process…
But, this book is intense; it is demanding and asks lots of questions you would not have considered if you hadn’t followed such a structured process. It can also be long-winded, draining and extremely time consuming. So it isn’t for everyone!
But, and it’s a big but, if you have a product idea, which you would like to stress test and you have the time and inclination to do so, following this book will answer the questions you hadn’t even thought of asking…
*All comments are based on my personal experiences and given freely. That said, you need to make your own choices. I can’t and won’t accept liability for you employing any recommendations. Business is all about risk. It’s your choice.
Nigel stone has, over the last fifteen years, started, led, consulted and nurtured both UK and European businesses to achieve quite outstanding results. Please feel free to drop me an email at firstname.lastname@example.org