For a long time, I covered startups in my home state and across the country. I really enjoyed learning about and meeting those were creating startups. I learned a lot about business and met some really interest people. When covering startups, I also ran into investors and learn about raising capital. I gained a better perspective.
I believe that the startup industry can teach us much about running a business that is is very applicable to WordPress professionals. Today I am going to touch on a few of those business lessons from the world of startups. There will be another post in the near future touting more of those lessons.
Never start with a fully developed product.
In the startup world, business owners will start with a minimum version of their product to test its validity. This is called a Minimum Viable Product (MVP). The reason you never start with the fully developed version of your product is that it might not work or be something the market is interested in buying.
The MVP is a principle of the Lean Methodology,
A core component of Lean Startup methodology is the build-measure-learn feedback loop. The first step is figuring out the problem that needs to be solved and then developing a minimum viable product (MVP) to begin the process of learning as quickly as possible.
If you create the full version and you don’t sell any products, then you spent a lot of money you can never recover. In the most simple terms, you receive no return on investment (ROI). The reason this is such a problem is that because the startup person him or herself is usually the one who puts up the money in the very beginning. They will tap into savings, get loans from family members or use credit. Therefore, you want to spend as little as possible to test the idea.
Sell the best burgers in the best place.
Gary Halbert used to tell a story to a class of students that taught the most basic premise of business and marketing.
He would give a scenario where he would tell the class they all had a hamburger stand. Then he would ask each student what would make his or her stand out. In other words, what was their unique selling position? One by one the students would answer with things like a sesame seed bun, 100% all beef patties, special sauce, etc.
Whatever. In any case, after my students are finished telling me what advantages they would most like to have, I usually say to them something like this: “O.K., I’ll give you every single advantage you have asked for. I, myself, only want one advantage and, if you will give it to me, I will (when it comes to selling burgers) whip the pants off all of you!” Gary Halbert
Halbert would then explain to his students that he would find where the crowd was starving and set up his hamburger stand. Halbert said,
Think about it. When it comes to direct marketing, the most profitable habit you can cultivate is the habit of constantly being on the lookout for groups of people (markets) who have demonstrated that they are starving (or, at least hungry) for some particular product or service.
Is the market is ready for what you have created? In other words, is there a gap in the market? Are you meeting that gap with your business?
This point leads me to the next lesson.
Identify a problem to solve.
Often, when we start in business, we are offering a service. I understand this as much as anyone. After all, I started my freelance career as a WordPress website designer. The problem is that most people aren’t looking for WordPress website designers.
What businesses are really looking for is more customers and more leads. This is the most basic need. Along the way, you will find other problems such as maybe a company needs to book clients online or they need a central place to communicate with their community.
You are a WordPress professional who solves a specific problem for your clients. In the startup world, companies set out to solve a problem. For example, my friend Max identified a recurring problem in the trucking industry and launched an app called Workhound App. It helps trucking companies get feedback from their drivers to keep them engaged and recruit new drivers.
Don’t create a business plan.
Do you know what a business plan is for? A business plan is a document to help a company get a loan. Are you getting a loan? If you aren’t, then why would spend hours creating a business plan?
In an article at Forbes, Richard Harroch explains,
My many years of experience working with startups, entrepreneurs, and venture capitalists has led me to conclude that business plans are largely a waste of time for the following reasons:
He goes on to say that they are a waste because they are quickly outdated, take a long time to prepare, and that potential investors don’t have time to read them. The startup world moves really fast.
In the startup industry, business owners will start with a document called the Lean Canvas. It is designed to get on paper the most basic information needed to outline your business without spending hours and hours.
At some point, startups will usually seek to raise money. At that point, they can put together a more comprehensive document. Business plans spend a large part of the document on financial projections which may not be something you can do currently.
Instead of creating a business plan that you store in a filing cabinet somewhere and never look at, consider doing a One-Page Business Plan or downloading a copy of the Lean Canvas and working through that worksheet.
Create a clear message focused on benefits.
If you go to enough startup based events, you will eventually see a “pitch.” The word is short for an elevator pitch. An elevator pitch is where the startup business owner will pitch his startup to interested investors. At least, that is the idea.
Often at these pitch contests, startups will get a chance to practice with real money being given as prizes. I went to one a couple years ago and a friend of mine one of the prizes for a startup idea she had. Sometimes, the pitches are for ideas and sometimes they are for ideas that have already started.
What you learn in listening to pitches is that startups will spend time trying to craft their messaging. The message for these pitches has to be delivered in a few seconds, often about 60 seconds. In that time they have given the core of their startup’s message along with the problem they are solving. Showing how they are solving the problem is the real benefit of their message.
The startups who excel will couch it in terms of a story which is great for a wider audience.
Wrapping it up
There is much we can learn from the startup industry about running a leaner, more productive business. The points raised in this article are applicable to most businesses and I think very applicable to WordPress businesses.
Is there another industry where you have learned more about running your WordPress business. Drop them in the comments below.