Best practices in designing your new business venture | MomsCharlotte.com
JENNIE WONG

Jennie Wong, Ph.D., is a nationally syndicated columnist and the creator of the product quiz website www.ABorC.com.
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Best practices in designing your new business venture

03/21/14 20:17
Charlotte Blogs

This week’s “Ask the Mompreneur” features an interview with Alex Cowan, serial entrepreneur and author of “Starting a Tech Business.”  Cowan is the creator of the Venture Design entrepreneurial methodology.

 

Ask the Mompreneur

 

Let’s say I have a great business idea on the proverbial back of a napkin.  How can I get from there to a fully-baked business model?

 

Alex Cowan

 

Great question; I think that’s what everyone wants to know.  Most people spend too much time building things and executing like they’ve already got a product that will sell.  With a new venture you don’t have that, so I always start by spending a lot of time talking to and observing the customer in as natural a setting as possible.  My goal is to learn about their problems and habits and how they’re acting today.  I never, ever “sell” at this point because the customer will usually say “yes” to a hypothetical product, even if they don’t really mean it.

 

If I believe I can create something that’s “better enough” than what they have today, I think about how I can validate that with a minimum of time and money, because even if I’ve done a great job getting to know the customer, there’s still a lot of risk.  If there are 1,000 possible outcomes in the imaginary future where your product exists, only 250 of those scenarios are successful ones.  In other words, there’s a 75% chance of failure.

 

It feels better to build the business like you’re going to be successful, but the reality is you’re much better off placing small bets.  Dropbox may be the best story on this.  They had a huge engineering task to really build the thing, so they made a fake demo and promoted it to see if anyone in their early market signed up.  And only after they did, did they place a big bet on real product development.  That was brilliant.

 

If I decided the bet I wanted to place involved actually building the product, I would create it in the smallest possible chunks using really good descriptions of what we’ve learned about the customer.  No one’s allowed to just say “Hey, I built what you said you wanted!”  I want everyone clued in about the customer and asking questions.  If its software and we’re building the front end, I’ll do a fake version and put it front of users with a task for them to do and see if they get it.  It usually takes at least 2-3 tries to get that right, even if you’re working with an experienced team.

 

Ask the Mompreneur

 

That sounds like a logical approach, so why doesn’t everyone create new businesses that way?

 

Alex Cowan

 

I think about that a lot since my work hinges on that question.  It’s like getting in shape - we all know how we should eat and that we should exercise, but we’re not doing it.  There are a lot of deep-seated emotional barriers to doing some of these things.  It’s hard to solicit input from others, and we desperately want to be right.  It’s hard to really put your idea to test when it’s your baby.  That’s why you need frameworks like design thinking to help discipline yourself and tame your instincts.

 

Ask the Mompreneur

 

There’s so much advice out there for starting a company, how did you cut through the clutter to your favorite tools?

 

Alex Cowan

 

It’s really about knowing what tools to use when and for what.  For learning about the customer, I like the body of work on design thinking.  For placing small bets and iterating to a successful outcome, the Lean Startup stuff is good.  The material on agile is good, but some of it is not relevant for a new venture.  My material on Venture Design is about making those techniques accessible and making it easy to know where to focus, at what point, and why.

 

Ask the Mompreneur

 

And what is “Venture Design,” exactly?

 

Alex Cowan

 

It’s an online curriculum I make available for free.  The mission is to bridge the gap between topics like design thinking, Lean Startup, and the traditional curriculum you have around business and design education.  What’s happening is that in a traditional university program, students are learn frameworks that are pushing 100 years old and basically designed around commodity businesses – like running a factory, for instance.

 

These same students get out into the real world and find innovation is the name of the game.  Many feel a little flat-footed without an engineering or design background.  The Venture Design material is about delivering something that’s consumable in the scarce amount of time most people have, and that provides an encompassing structure and sequence so that innovators, entrepreneurs, and intrapreneurs can build a solid foundation to innovate effectively.

 

Ask the Mompreneur

 

What is the most dangerous phase for an entrepreneur?  How can we avoid the most common pitfalls when it comes to launching a new product or service?

 

Alex Cowan

 

The biggest pitfall is at the very beginning when you’re psyched about your idea.  Think about it as a marathon, or maybe an obstacle course, but definitely not a sprint.  You’ll probably have to tweak your concept many times and find out you’re wrong about things you wanted to be right about.  Hold on to that enthusiasm but channel it in a disciplined way.

 

Ask the Mompreneur

 

What additional resources do you recommend?

 

Alex Cowan

 

For the person who wants to learn some of these techniques in their spare time, I just created a page called “The 20 Minute Innovator.”  You can sit down and use design thinking to draft a customer or user persona in 20 minutes and practice laying out a set of Lean Startup-style assumptions.  You can think of it as a quick workout for your business innovation muscle.

 

Jennie Wong, Ph.D. is a business coach and the creator of the product quiz website www.ABorC.com.

 

 

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