One of the most difficult things to accomplish in life is quite simple in theory but can be a tall order to implement – keeping one’s promise, commitment or word each and every time and when failing to do so not providing any excuse of any type. It is in the spirit of “keeping my word” that I will seek to address the proverbial question, “If Bootstapping a Money Machine start-up is so wonderful and is so dependent upon customer revenue then why do so few business development workshops and courses teach and train entrepreneurs in the art of ‘discovering’ and ‘developing’ and closing the deal with real, tangible, bona fide, cash paying customer? I have been pondering the details of this question and its answer over the last number of years.
Every business development course/workshop/training module readily embraces and provides training for a concept called “market research” or a “marketing plan” but what value does this data have to the Money Machine founder? I once read one source that stated that a good marketing plan contains the following elements
- Description of the product or service including special features
- Marketing budget, including the advertising and promotional plan ie “How much money are you going to spend?” on the aforementioned advertising and promotional pieces.
- Pricing strategy
- Market segmentation (will one specialize in specific niche markets or a mass marketing strategy)
Honestly, even as I am penning these concepts the process makes my head hurt. Why, why, why…
- Would any serious amount of time be spent describing a product or service whose value and demand has not been validated by feedback from potential customers?
- Would an individual spend a single dime on advertising or promoting a product or service in the hopes that it might attract the attention of a member of a speculative “market segment?”
- Would anyone define a strategy for pricing a product or service when their is no clarity as to the financial posture of the product’s customer base?
- Would a conversation be had about “niche” markets vs “mass” markets? Heck all that a Money Machine founder needs to concern herself about are paying customers irrespective of the type of market camp from which they originate.
For a Money Machine to survive it is not about “market research” but about the process of discovering and developing a paying customer base. The most full featured tool of choice for working through this process is the science and particulars of the “Lean Start-Up.” Now using this term is a double edged sword due to the fact that everyone and his first cousin has heard about the “Lean” process and its relationship to start-ups. Shucks, there are tens of books on the subject matter, hundreds of web-sites, on and on and on and on. Your have the originator of the term Mr Eric Ries and his book The Lean Startup. Then there is the world renown guru, one Mr Steve Blank and his internationally recognized The Four Steps To Epiphany among other wonderful books that he has authored. These and other books and authors provide some keen insights and business science but they really do not specifically address the intricacies of creating, building and sustaining a Money Machine. It is in this space that one has to be superly careful not to discard the proverbial baby with the entire tub of bath water. Here at the “Musings…” we are only interested in the portions of the aforementioned science that suits our purposes, namely, processes and techniques that empower us to create and sustain – a very small scale high tech, maker, craft/creative based, or food start-up or business that provides occupation for no more than three individuals, better known as a Money Machine. It is in this space that we conduct our first efforts into the “hacking” of the well know/established “Lean Startup” methodology science.
So, where and how does one move forward with this process? The entire process begins by applying portions of the scientific method to the creation of a Money Machine. The major component in this process is a tool that has been defined as an “Experiment.” Please note the details of the following
In applying the concept of an Experiment one works towards implementing the following steps
- Step 1 – Create an original idea
- Step 2 – Build or create a product/service around the original idea
- Step 3 – Measure the acceptability of your product by gathering data from customers/potential customers
- Step 4 – Learn from the data and allow the analysis help determine whether to…
- Step 5 – Continue with the development of the original idea or pivot to another concept
Even though this only provides a high altitude view of the process it becomes quite apparent that the key item that results from an Experiment is that Money Machine start-up business development decisions are now based on data and not on the proverbial whim and a prayer. Shucks, it is great to pray and have an active prayer life in this area but make sure to possess some reliable data over which the prayers are offered.
With this said, the following questions would be considered superly fair
- How does one create the original idea in an effective manner?
- Does the revision of the product/service that is offered into the marketplace possess all of the features from the original idea?
- What measuring methodologies should be used and how is the data gathered?
All are very good questions and are items that, Lord willing, will be addressed in future editions of “The Musings of a Money Machine Hacker.”