I often coach people who find themselves at a crossroads. Some are considering entrepreneurship in the climate space. When thinking about launching a business, it can be really hard to know how to start. Here, tried-and-tested frameworks can help us move forwards.

I began my own business in 2017. I’ve mostly built it organically, figuring it out as I went along, through a lot of trial and error, and even some deliberate prototypes. Four years into my coaching business, I’m now studying for ThePowerMBA. I’m less than halfway into the programme, but I’ve already learned so much that would have been helpful four years ago.

For this blog post, I thought I’d pull together some of my favourite tools so far from ThePowerMBA, for the sake of aspiring, or early-stage, entrepreneurs who’d like to think more strategically.

1. Don’t think too much

Eric Ries, author of The Lean Startup, who co-presents this module. All images are copyrighted property of ThePowerMBA.

This one’s counterintuitive. Surely the best way to be successful is to sit down and write a step-by-step business plan that covers all the bases you can think of. Right?

Well….not necessarily.

One of my all-time favourite modules in ThePowerMBA has been The Lean Startup. It’s based on the book of the same name and is taught partly by its author, Eric Ries.

In it, Eric compares the lean startup methodology to what everyone else does.

For example:

Rather than sit down and write a business plan, get out of the building and start interviewing your ideal customers.
Rather than delay your launch date until your product is perfect, launch a minimum viable product: the smallest, cheapest and fastest version of what you do, that allows you to start interacting with your customers and getting feedback right away.
Rather than assuming you know what’s going to happen, assume you know what’s going to be wrong.

In Eric’s words: “perfection is the enemy of entrepreneurship.” If you’re prone to perfectionism, ask yourself: what is a tiny step I can take right now to test whether my idea has value?

Maybe it’s meeting some potential customers and interviewing them. Maybe it’s running a pared-down version of your product/service in return for detailed feedback.

It’s not sitting thinking about it and not taking any action.

2. Remember: it’s still about humans

Course instructor, Borja Adanero Guinea, walking us through the Business Model Canvas. All images are copyrighted property of ThePowerMBA.

As I’ve written about elsewhere, this is something that I’ve seen purpose-led entrepreneurs (including myself) overlook. We’re so passionate about solving a particular problem in the system, about making a bigger impact, that we forget that we’re still trying to serve a particular customer group through our service/product. And so for our idea to work, that customer group needs to see value in our idea. Enough value that they’ll invest time, money, and energy in obtaining it (more below).

A tool to help us do this is the Business Model Canvas. This framework kicks off the entire programme of ThePowerMBA. It’s a great starting point for helping you think through how your idea offers value to other humans.

If you’re not a student at ThePowerMBA, you can access this tool for free via the Strategyzer website.

3. Learn from prospective customers

Along those lines, when you’re thinking about launching a product or service, the best way to get under the skin of the people you want to serve is to actually talk to them. Here, ThePowerMBA provides a step-by-step framework for how to interview people.

This framework follows four stages:

(1) Understand your customers

Learn who your customers are. Basic demographic questions around age, sex, location, education, etc, will all be helpful. Ask questions, too, to learn more about their core values and how they make decisions.

(2) Validate the problem

Understand how your people view the problem that you’re trying to solve. Listen to the words that they use. What options do they see as potential solutions to their problem? Learn what they think about all these options.

(3) Validate the solution

Explain or show your prospective solution. (Keep this simple. As above, with the minimum viable product, this can be a simple mock-up to introduce them to what you’re thinking). Ask them what they’ve understood about your idea. Ask: “is this for you? Why?” Ask them what they like most, and why. Keep bringing it back to what it will do for them, and what they highlight as most important.

(4) Validate the pricing

Tell them the price, and ask if they’d like to buy. See what they say. Offer a 20% discount and see if the answer changes.
(Note: pricing validation can be quite nuanced. For example, when the founders of Owlet, the baby monitor, were validating pricing, they found that people answered quite differently depending on how the question was phrased.)

These kinds of interviews will help you work out whether the product you have in mind is right for this kind of customer. You may well find out that this customer isn’t actually a fit for you. And that’s fine. You aren’t able to serve everyone. However, if you really want to work with these particular people, you’ll want to integrate their input into your idea until it offers even more value to them.

4. Speak to the most important benefits and costs

Allie Whitefleet interviewing David Flatow, Founder of Allocate — one of the many case studies in ThePowerMBA — about their value proposition. Allocate was later acquired by Sage. All images are copyrighted property of ThePowerMBA

ThePowerMBA emphasises that entrepreneurs often try to convey their value proposition in a way that’s really ineffective. For example, companies talk about things like functionality, features, and characteristics, how they differentiate from the competition, etc.

While there’s a place for this, it’s not the best way to describe true value. Why? Because these things don’t speak to what actually matters to your users or customers.

At the most powerful level, we humans are driven by very core needs. When it comes down to it, we want to feel happier or less afraid, feel part of something bigger than us, save time and money, etc. As you’re talking to prospective customers (above), listen to the emotional needs that you’re addressing, and how you can include this more in your communication.

At the same time, don’t forget that there are costs involved in using any product or service. These costs go far beyond the price tag. They can include the effort required to obtain the service, switching costs from another service, a learning curve in using it, etc.

As ThePowerMBA encapsulates: “value = benefits - costs”.

So keep asking yourself: how can you maximise the most important [read: emotional] benefits, and minimize the costs to your people? And how can you communicate this really clearly?

5. Pay attention to the right things

Instructor Borja Adanero Guinea, walking us through the difference between Actionable and Vanity Metrics. All images are copyrighted property of ThePowerMBA.

These days, everything can seem to be about likes, clicks, and subscribers. It’s very human to focus on our social media traction to give us a sense of whether we’re succeeding. While these metrics are helpful for when you’re thinking about scaling and want a sense of the ‘size’ of your business, they can be misleading at the earlier stage.

This is because when you’re just starting out, you want to be learning whether you’re meeting a real need in the market (a product-market fit).

For this reason, there are particular metrics that Eric Ries (of The Lean Startup, above) refers to as vanity metrics.

Vanity metrics include:

Followers
Visitors
Leads
Downloads

While high numbers here may make you feel good, and can speak to the reach that you’re getting online, they don’t give you an idea of whether people actually find your product/service useful once they get their hands on it. Instead, take a look at your actionable metrics.

Actionable metrics include:

Conversion rate
How much it costs you to acquire a new customer
How many repeat customers you get
Net Promoter Score, and Reviews

If your customers are getting what they need from working with you, they’re going to tell other people — and that’s the best kind of business growth. So, at the start, focus on the value you provide and the metrics that can help you measure that value.

There’s lots more that we’ve covered so far in the first few months of ThePowerMBA. Overall, I’ve been really enjoying the programme and have been really impressed by the quality of the teachers. I’m looking forward to applying some of what I’ve been learning in the next few months, chief among them, The Journey: the world’s largest climate innovation summer school, which I’m looking forward to being part of once again.

Here’s to strengthening as many purpose-led business ideas as we can!

Something to chew on: If you’re an aspiring or early-stage entrepreneur, which of the above frameworks feels most helpful right now? And what would be the first step towards implementing it?

Would-be Entrepreneur? Don’t Overthink it.