By Jorge González, eHealth Hub coordinator
Answers are never inside your office. Your mother or your friends - even if they were potential customers - are not your best tester. And people almost always lie when they say they would pay for your product.
These are the three most common mistakes I have seen during my years supporting startups on their business modelling. The good news is that there’s a very simple solution: validate against the market.
If you don’t validate, you’re wasting your fuel - money, time and energy - in a dead-end street. Get out of your office, learn fast and adapt to reality. My motto when talking to startups is always validate, validate, validate.
But why is this validation process so important? To launch a new project is always uncertain, even more if we’re in new markets like digital health. Years ago the common thinking was that startups were like big companies, but smaller. Now we know that’s not true.
A startup is a company looking for a business model that is repeatable and scalable, i. e. a startup wants to learn fast and be agile in order to become a traditional company as soon as possible. And by traditional companies I mean those running a model that works.
If you’re seeking that successful business model, go ahead validating your hypothesis with the market. The-mar-ket. Lucky you if you can count on a supportive family and friends connected to the business, like doctors or techs, but never let trust play against you.
Ok, we’re in a validation mood now. How do I go about it? I will share with you four tips and one opportunity to improve your business model.
Tip 1: Keep it simple
Instead of writing a complex business plan, focus on a Business Model Canvas. Use those ideas and assumptions that you don’t really know if will work as you predicted.
Identify your hypotheses and sort them by priority. Classify them by type: regarding the customer (not the user), the problem and the solution. Start with the client: who will pay for my solution? Then his challenge: is this issue really a priority for my customer? Finally your solution: is my service or product the best way to solve the problem?
Tip 2: The truth is out there
Get out of your cave and interact with potential users and clients. Validate with them your main hypotheses, like the value proposition, customer segmentation and channels. Prepare an interview with a customer-problem-solution approach, define the metrics to measure the answers and schedule the meetings.
Tip 3: Be water, my friend
And be agile! Lean Startup model is based on the development of a Minimum Viable Product (MVP) to get a quick response from customers. It’s the best way to readapt your solution in a cost-efficient way, hence avoiding wasting time and resources in a product that your potential clients won’t love.
Tip 4: No fear
Never stop learning and don’t forget to use your learnings to pivot. Adjust whatever is needed to get commercial traction. Don’t be afraid.
You don’t have to do it alone. Here’s one opportunity.
Get free business support from experts with Lean Startup Academy. It’s an intensive program -tailored to digital health- where you’ll get personalised feedback from experienced trainers and end up with a sound, validated business model tested against your market.
But what if you feel like being in a previous phase? Turn your idea into a real project with Business Model Clinic. This free program consists of three one-to-one coaching sessions with eHealth and business experts.
Both business model services are part of eHealth Hub, a European project that offers business support to digital health companies. If you find them useful and want to keep up-to-date for next calls, subscribe to eHealth Hub newsletter and follow on Twitter and Linkedin.
And always remember: whatever you need, is probably not inside your office!