4 realistic goals for building a scalable business model

In the last newsletter we talked about the need to set SMART goals (Specific, Measurable, Attainable, Relevant and Time-Based) when starting a new venture.
But what about the goal itself? What are the SMART goals an entrepreneur should set to build a money-making, scalable business model?

Goal 1: Just Start!
Stop talking about starting something. Start doing it. Identify your early adopters (people who have the problem you are solving) and see if they’ll talk to you about the problem. Your 1st goal is about getting things started. Ex: "In the next 10 days we will identify our early adopters and set up 25 interviews with them."

Goal 2: The Search for Problem-Solution Fit
Problem-Solution Fit happens when you’ve proved a problem exists and you have a feasible solution that actually solves that problem. Get proof that your early adopters actually CARE about the problem and that your solution is better than what they are doing now to solve that problem. Don’t be afraid to pivot if (when) you discover things are different than what you had originally assumed. This will make your idea better. The goals at this stage are all about talking to the customer. Ex: "In the next 30 days we will conduct 25 customer discovery interviews and chart their responses."

Goal 3: The Search for Product-Market Fit
Product-Market Fit occurs after many customer interviews and pivots, when you have proven that your solution will be profitable and scalable. You have ensured that your solution is a MUST HAVE not a NICE TO HAVE. The goals at this stage are all about proving demand and finding ways to generate more revenue (and less costs) while you build your product/service. Ex: "By May 1st, we will have a prototype to show potential customers to confirm demand."

Step 4: The Quest to Scale Up
Scale up only after Product-Market fit, because at that point all elements of the business model are fully tested and proven. The goal of scaling is success. Scale revenues while holding costs as flat as possible to increase profit. Ex: "by June 1st, we will generate $XX in revenue and lower costs by $XX.".

Setting realistic goals is not as hard as it sounds. Go back to Step 1 above and JUST START. Start by talking with potential early adopters (people who have the problem you are solving) and find out how they feel about that problem. The next steps will follow.

Good luck.

Did You Know...

That ‘knowing what to do next’ is among the top challenges facing entrepreneurs?

Founders face many challenges in the early days of their startup. Among them is the confusion over what to do next (or first). The online world is full of articles, videos, podcasts and blog posts on how to start a business. But too much scrutiny can cause "analysis paralysis". The Lean Startup is a proven method that clearly outlines what to do first and what to do next. Founders who follow lean principles and techniques have a higher rate of success. As do those with mentors or advisors. Read up on Lean strategies and find a mentor you respect to increase your chances of success.

Resources: www.forbes.com, www.100steps2startup.com

A: The best way is to Double Dip (make it once, sell it twice). Some companies do this by charging for their product and for servicing the product. Others find new customer segments, new channels for selling their product or new ways to use what they already have.

An example of double dipping is the music industry. Singers sell songs and tickets to a concert and merchandise at that concert. Lady Gaga is the Duchess of Double Dipping, never missing an opportunity to expand her sources of revenue.

A good way to find new avenues for your product/service is to think outside the box. Write a book or create a course (sell your expertise), sell ads on your website, sell PART of your product/service as something new, find a new segment or customize (personalize) your product. This past year has been the perfect example of businesses pivoting to create new revenue streams or modify old ones. Think of a new way to use your product/service, new segments to sell to and breathe new life into your business.

Glucose Vision is an early stage smartphone application offering diabetic patients on-the-spot data about the meal in front of them to help them make healthier choices. The app analyzes a user’s meal providing an accurate carb count with recommendations for portion size adjustments to reduce blood sugar fluctuations, thus lessening the risk of severe illness. Their target audience is newly diagnosed Type 1 diabetes patients. 

All 3 founders are engineering students, not business students, and their biggest challenge was trying to figure out what steps to take in order to turn their idea into a viable business, says Liam Bell, one of the co-founders. They started following the 100 Steps 2 Startup program 12 months ago and "it has been a driving factor of all our successes" says Bell. "It gave us a structured approach on how to create a strong business model, how to engage with early adopters through customer discovery, and how to develop an MVP to use in customer validation interviews from which we gained valuable engagement/feedback metrics."

The founders’ impressive successes have included winning all 3 Stages of the Norman Esch Entrepreneurship and Innovation Awards at Ryerson University, totaling $38 000, being accepted to conduct 12 months of R&D in partnership with SOSCIP (Smart Computing for Innovation) and Ryerson University, AND being selected to compete in the semi-finals for the nation-wide TELUS Innovation Pitch Competition for a grand prize of $200,000.

Bell and his partners are well on their way to creating a fully functioning smartphone application that they can put in the hands of their early adopters and then market to a wider demographic of patients. We can’t wait to see where they’ll go next.

Co-founders: Liam Bell, Osama Muhammad , Muhammed Ashad Khan