This is a guest post by Bob Dorf, co-author with Steve Blank of the The Startup Owner’s Manual, and one of the world’s top experts on Customer Development.
I’m excited to visit Toronto next week for a Fireside Chat with Startup Grind Toronto and a two hour workshop for startups. It’s always fun to meet new entrepreneurs and I am looking forward to “infecting” Canadians for the first time with the value and impact of customer development, a passion of mine for years now. While I’ve spent the last three years traveling the world to infect entrepreneurs with this different approach to getting startups right, sadly it’s my first invitation north of the border to Canada, a short hop from my home base in Stamford, Connecticut.
As I write this, I’m headed to Moscow, just few weeks after speaking to some 3,000 entrepreneurs at “GrowUp StartUp” in Warsaw. What I see wherever I go is both thrilling and frustrating as heck at the same time. And everyone seems to welcome the detailed, step-by-step approach of the Startup Owner’s Manual I co-authored with the far-more-famous Steve Blank a little more than a year ago.
Focus on the frustrating side of the ledger. What bugs me most about startups?
More than anything it’s the thousands of startups who are doing what I’ve come to call “brute force execution.” What’s that, you ask?
As we know , the odds against startup success are nearly overwhelming….some say as few as one or two of every hundred startups succeed by maneuvering and pivoting their way to a repeatable, scalable, profitable business. And that’s where lots of people make themselves feel good…land a few little orders, win a few business plan competitions, raise a few bucks from some friends.
But is that a business? Most of the time, sadly the answer is an emphatic NO!
For a business to be a “success,” it needs these key elements at a minimum:
- Repeatability: Do I know exactly what my customers look like and can I find zillions of them over time? Can I expect a certain consistent pattern of success if I do the same thing over and over again—like a 15 per cent sales rate for calling on Controllers, or Office Managers, or offering a free trial to gamers?
- Scalability: once I’ve found that target customer, is there a relatively unlimited number of them out there? In Canada, can you cross the border easily to reach a few hundred million more prospects just to the South, for example? What about Europe, Australia, or French-speaking countries? If a business can’t deliver consistent long-term growth, it’s of no interest to investors and should be unattractive to entrepreneurs as well.
- Profitability: Well, of course. Not necessarily on “day one,” but over time—as you get better at building your business—can you bring it to the point where you return profits to investors, to founders, and to the bank?
These challenges were catalysts in birth of The Startup Owner’s Manual. It’s why the book has been translated into 19 languages, and why it’s being nearly-devoured around the globe. While the methods in the Startup Owner’s Manual don’t for a minute promise to guarantee success, they’re helping entrepreneurs everywhere reduce their failure rates by thinking longer-term and building truly great, sustainable new businesses. On to Toronto!
Bob’s visit to Toronto is a co-hosted by Startup Grind Toronto, Cdling Capital Services and the Creative Destruction Lab at Rotman at the University of Toronto.