Simple and Effective: Start a Business using Lean Principles | Eric John Campbell | Skillshare

Simple and Effective: Start a Business using Lean Principles

Eric John Campbell, Author

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19 Lessons (52m)
    • 1. Course Promo

      3:06
    • 2. Why lean principles will save you huge amounts of time & money

      3:06
    • 3. How to avoid wasting $1,000's of dollars

      4:47
    • 4. The truth about startup funding

      1:41
    • 5. Why execution is more important than your 'idea'

      2:29
    • 6. The power of getting started

      2:39
    • 7. Talking to customers is your secret weapon

      3:45
    • 8. What questions you should be asking

      4:10
    • 9. Why you need to stop pitching and listen

      3:20
    • 10. Recurring painpoints are gold!

      1:55
    • 11. What is an MVP?

      3:13
    • 12. The power of creativity and building things that don't scale

      2:16
    • 13. You have one goal: prove your assumption

      1:55
    • 14. Get feedback and reiterate often

      2:32
    • 15. Testing will make you rich

      2:18
    • 16. Protect your idea

      0:55
    • 17. Surround yourself with successful people

      1:28
    • 18. Course review

      4:51
    • 19. Failure is the secret of success

      2:02

About This Class

Do you want to start a business but information overload is stopping you?

Businesses should be simple

The truth is starting a business doesn’t have to be hard. At its core a business is simply a solution to a problem people are having. That’s it.

.

Lean principles help you focus on what matters

Lean principles allow you to focus on the core of a business while ignoring all the other stuff that doesn’t matter. In this course you will learn about the 3-steps to building a profitable business.

  1. Customer Development (find a problem to solve)
  2. The MVP (see if people are willing to pay for a solution)
  3. Build the solution (create your business based on customer feedback)

Transcripts

1. Course Promo: In this course, you're gonna learn an effective way to start your very own profitable business using lean principles. And what's so great about these lean principles is it helps you avoid wasting time or money building a solution that people don't want or need more specifically, in this course, you're gonna learn how to start a business with little or no money upfront. You're also gonna learn how to be confident your business will be successful before you build a product or service. And lastly, you will learn how to make sure your product or service continues to evolve based on what your customers want. Now it's important to note what you learned in this course is not the only way to start a successful business. And I'm sure you've talked or heard from many successful business owners, and it seems like they've all had a different journey that they've taken. But what's so great about this methodology is this course is designed based on lean principles, and these lean principles were made popular by Eric Reese's book The Lean Startup. And how this course is designed is based on how you should start a business if you're using the lean principles. So right now we're in the introduction section, and after the introduction, we're gonna move on to customer development. That's because before we build anything, we want to talk to our customers or people that maybe our customers and see what problems they're already experiencing. And that's because we don't want to build a solution to a problem that nobody is having. And the best way to find out the problems that people are having is to interview them. So here we're gonna learn how to interview are ideal customer. And also, if you don't have a customer in mind or a business idea, you're gonna learn how to schedule interviews with people you know and extract business ideas from there. And what we're looking for is pain points, and a pain point is a problem that someone is already experiencing and that will become the foundation for our business. So once we found out a pain point that multiple people are experiencing, then we want to build an M V P, which muse us to the next section, and M V. P is a minimum viable product, and it's a way to test and see is the problem that we found in our customer interviews, one that's big enough that people are willing to pay for a solution. And we're also testing to see if we're able to provide that solution that people are looking for. And that's it. Once we've used the M. V P to test our assumption that, yes, we've discovered a pain point that people are willing to pay for to solve, and we can solve it. We move on to the next section, which is building our business or building a product, and here we're gonna learn how to scale up this process and solve people's problems effectively and efficiently. And finally, after all that will conclude by reviewing everything we've learned and then by giving you some final advice, So let's get started. 2. Why lean principles will save you huge amounts of time & money: In this course, you're gonna learn an effective way to start your very own profitable business using lean principles. And what's so great about these lean principles is it helps you avoid wasting time or money building a solution that people don't want or need more specifically, in this course, you're gonna learn how to start a business with little or no money upfront. You're also gonna learn how to be confident your business will be successful before you build a product or service. And lastly, you will learn how to make sure your product or service continues to evolve based on what your customers want. Now it's important to note what you learned in this course is not the only way to start a successful business. And I'm sure you've talked or heard from many successful business owners, and it seems like they've all had a different journey that they've taken. But what's so great about this methodology is this course is designed based on lean principles, and these lean principles were made popular by Eric Reese's book The Lean Startup. And how this course is designed is based on how you should start a business if you're using the lean principles. So right now we're in the introduction section, and after the introduction, we're gonna move on to customer development. That's because before we build anything, we want to talk to our customers or people that maybe our customers and see what problems they're already experiencing. And that's because we don't want to build a solution to a problem that nobody is having. And the best way to find out the problems that people are having is to interview them. So here we're gonna learn how to interview are ideal customer. And also, if you don't have a customer in mind or a business idea, you're gonna learn how to schedule interviews with people you know and extract business ideas from there. And what we're looking for is pain points, and a pain point is a problem that someone is already experiencing and that will become the foundation for our business. So once we found out a pain point that multiple people are experiencing, then we want to build an M V P, which muse us to the next section, and M V. P is a minimum viable product, and it's a way to test and see is the problem that we found in our customer interviews, one that's big enough that people are willing to pay for a solution. And we're also testing to see if we're able to provide that solution that people are looking for. And that's it. Once we've used the M. V P to test our assumption that, yes, we've discovered a pain point that people are willing to pay for to solve, and we can solve it. We move on to the next section, which is building our business or building a product, and here we're gonna learn how to scale up this process and solve people's problems effectively and efficiently. And finally, after all that will conclude by reviewing everything we've learned and then by giving you some final advice, So let's get started. 3. How to avoid wasting $1,000's of dollars: in this video, I'm gonna talk about how most people approach the idea of building a business and compare that with lean principles. So the traditional way that most people think of when starting a business is first, that they have to come up with a great idea. And usually this is an idea that they've been thinking about for a couple weeks, or maybe even months, and they have perfected it in their head. Then once they've come up with this great idea, they think that they need to get funding for their idea. And this is usually in the form of investment from a venture capitalists and angel investor or maybe family and friends. Then they believe once they've gotten funding for their idea, they need to immediately protect their idea. And that's because they don't want to lose something that they've perfected in their head that's taking weeks or even months. Then, after protecting their idea, they believe the next step is to build a team of people to work on their idea. And finally, after that, they believe that we either get bought out or make a lot of money, and the reason why I keep saying, think that this is gonna happen is because most businesses This is not how it happens at all. But people think this is the path that they're going to take. So there's a lot of problems with this mentality, and first of all, this mentality assumes that this person knows what their customer wants. They haven't interviewed or talk to any of their potential customers. They don't even interact with customers until they've built their final products and gone through all the other steps. Another problem with this mentality is this person will spend a lot of time chasing funding and building a team, and it would comes to outside investment. They're not going to get anything if they just have an idea. So that whole mentality that I need to create a perfect pitch just so I can get funding is really a waste of time that's not moving you forward. And finally with this mentality, by the time that this person releases something, it's too late to make changes based on customer feedback. They've already built the team, got in the funding and spent a lot of time creating this final solution before they've had that interaction with their customer. Now compare this with the lean mentality, and this mentality starts with asking potential customers. What pains are problems they're already experiencing right now, And these air called pain points. And once we find a really good pain point, that's gonna be the foundation of our business. So we keep doing these customer interviews until we find a common pain point that people are sharing. Then with that pain point, we're going to create a minimum viable product, also known as an M V P, that validates that pain. So what this means is, even though people have told us that they have a problem, this is still an assumption that we need to prove ourselves. And to do this we're going to create a solution that takes the least amount of time or money investment possible. And what we're looking to do with the solution is see if this is a problem that we can solve, and also if this is a solution that people are willing to pay for. In other words, is this problem that people are having big enough that they'll be motivated to pay for a solution? Then, once the M V p has validated this customer pain point. Otherwise, our assumption then we want to build a scalable system that more efficiently solves that pain. And what this allows us to dio is build a business with confidence that once we build it, people are going to purchase our product or service because it solves a problem that we've already proved that exists. And finally, once you've built that scalable system, then you can start protecting your idea and building a team if necessary. And the advantages to this mentality is you Onley spend time solving problems that you know people are experiencing. You're not spending time building a solution to a problem that exists in your head that you don't know if exists in the real world. So that's why it's important to do these customer interviews and not assume that we know what problems people are having. Another advantage is you don't waste time building a product that people aren't willing to pay for, so you may interview customers and realize that a lot of people say they have the same problem. But when it's time to pay for a solution, they don't think that problems big enough that it's worth it for them to pay money to solve it. And finally, with this mentality, you can find ways to build your business without any money upfront. So it's really efficient way that saves us money and time when building a business. 4. The truth about startup funding: In the last video, I explained how using lean principles can help you start a business with little or no money upfront. Now there are still a lot of people that think that their idea is different, and they need outside funding in order to start a business. And I wanted to explain about where small businesses get funding when they need it. Now here are the five most common sources of funding and their rank from the most common at the top to the least common at the bottom. So the most common source of outside funding for small businesses is personal savings from the business owner. And that's how 50% of small businesses are funded. The next most common is credit cards, and after credit cards comes friends and family. Then, after friends and family comes banks, and if that small business owner still needs more money than they usually turn to venture capital. And the reason why I think this is really interesting is a lot of people think that they need to get money from a venture capital in orderto have a business. But the truth is less than 1% of small businesses actually get funding from a venture capitalist and many businesses that are in a position where they could get funding from a venture capital avoid it because they don't want to lose that much equity in their company . Now there's a great video on YouTube that I highly recommend you watch. It's called the Kaufman Sketchbook Money Game, and all include a Lincoln description. But it's a short three minute video that visually explains how small business owners received their funding. It's really interesting to watch, and it will change your mindset. 5. Why execution is more important than your 'idea': in this video, I'm going to talk about why execution is more important than the idea. And this is a really important point because there's a lot of people that will spend weeks or maybe even months, perfecting this great idea in their head. And once they have this idea, then they want protected at all costs. But I want you to think about this. Think about every business that has a really great idea, and I'll bet you that thousands of people had that same idea, but only one person or one group of people actually executed on it. So the truth is, most people have these great ideas. But how many truly execute and the number is extremely low. And the problem with thinking that your idea is incredible and everyone wants to steal it is that you're not going to share it with other people. And more specifically, you might not even share your idea with potential customers and learn about what they want . And that could be very problematic. And it's kind of ironic because by protecting this great idea that you have, you never let the idea actually come to life, So execution is everything simply put, execution is taking action, and what successful entrepreneurs will tell you is in most cases, their final business will not be the same as the original idea. And there's two ways you can do this. You can come up with an idea yourself and then validate with customers that they are experiencing that problem that your idea provides a solution for or what's often a better route to take is to come or to start with, no idea and let your customers come up with that idea for you. So in this sense, you don't need to come up with an idea. By talking to your customers, you can learn about the pains that they're already experiencing in their day to day lives. And once you hear that many of your potential customers share the same pain, then you can build your business around that. That pain is your idea, and why this is so great is because you're building a solution that's based on a pain that customers are already having. It's extremely efficient, and if you contrast that with the great idea myth, where you spend all this time building something that you don't even know if your customers need, then most likely you're wasting your time 6. The power of getting started: Now I want to talk about the importance of getting started somewhere, and it doesn't matter where you start. What's important is that you get started and I get started. I mean, not just coming up with ideas, but taking action on those ideas. And your actions may not be perfect, and I guarantee you they won't be perfect at first far from it. But by getting started somewhere, you're gonna learn so much in the process that it doesn't matter where you start. And that's because the greatest learning tool there is is failure, and it almost sounds cliche. But that's because it's so true that you're gonna learn more by failing than any other method. And you may read a ton of books about entrepreneurship, and they provide great advice. But until you've actually failed, you're not learning as much as you could. And the only way tohave failure is to get started without action. You can't fail, and it actually happens where the longer you wait, the more mental resistance you create. So let's say you have an idea and you want to see if other people have this same problem that you think they have and instead of just talking to people that week that you had the idea. You wait two months and in this two months you keep developing the idea in your head. Well, now there's a lot of pressure. You've spent two months thinking about this idea, so you think to yourself, Oh, this has got to be a good idea If if this idea is not good that I have just wasted two months and that gives you more resistance, you don't want to get started because the cost of failing seems to be much higher. And that's why if you had just started right when you got that idea, then if you found out that idea is not a good one and it's it's not a big deal. I just came up with that idea less than a week ago. There's not this big buildup that this idea is supposed to be really great. And what's great about starting anywhere is when you start a business, it truly is a win win situation and that's because you either learn a lot from your failure or you create a successful business, so the really is no way toe lose If you come in with this mentality. But the important thing here is to not look at failure as this big, terrible thing, because in actuality, failure is a really, really good thing. And all entrepreneurs have failed at some point, and without that failure, they wouldn't have learned what they needed to know to get them where they're at. 18. Course review: congratulate Congratulations on making it to the final section of this course. Now we're gonna take some time to review everything that we've learned. So energetic. Congratulations on making it to the final section of this course. Now we're gonna take some time and review everything that we've learned. So in the introduction, we talked about why the lean method is more effective than the traditional way of starting a business with the lean method. We aren't spending weeks or even months preparing this great idea in our head and then trying to get funding right away to build it. Instead, we're talking to customers directly to find out the pains that they're experiencing now and then we're building an M V P to see if we can provide a solution that people are willing to pay for. And finally, with that knowledge, we could build a solution. That's our full scalable business. And we know that customers want what we're offering, so there's no guesswork anymore. And if possible, we learned that it's important to avoid outside investment because you don't want to give up equity of your company if you don't have to, and this makes it so you lose a lot of control and you have outside influences that determine what you dio. And then we talked about that great idea myth, which is a soon as I have an excellent idea. I just have to go and protect it right away. And we learned that the truth is, it's all about the execution and not the idea itself. And for every great business that had an excellent idea. There are likely thousands of people that had that idea, but no one took the time to execute it or they did, and they didn't execute it well. And just by talking to customers, you already have such a leg up on the competition. When it comes to executing an idea because you're solving a problem and you know what the customers looking for, there's no better source for of information than the people that are actually gonna be paying for your product or service. And then we talked about the importance of getting started somewhere, so it really doesn't matter where you start as long as you get started. We also talked about failure and how failure is actually really great because with failure , you don't lose anything you really learn so much in the process that it's worthwhile. Then we talked about customer development, and here is a great opportunity for you to find out exactly what problems your customers air having. Like I said just a moment ago, there's no better source of information then from the people that are going to be paying for your solution. We talked about how interviewing is a skill that you can develop and why it's really important to listen and not pitch a solution, so we never want to ask. Would you buy this because that's a form of pitching? Finally, we talked about pain points and why they're the foundation of your business. And a pain point is simply a problem or frustration that your potential customers experiencing. And this is something that we want to build a solution toe help solve. Then we moved on to the M. V P and an M V. P is used to find out if you can provide a solution that people are willing to pay for using the least amount of time and monetary investment possible. We talked about how it's important to build an EVP that doesn't scale and you can be really creative when building this M v p. And as an example, we mentioned Groupon and how they started as a WordPress blawg that provided a two for one pizza deal. So really, don't limit yourself on the possibilities of your M V P. The important thing is to make it realistic and see if you can prove or disprove your assumption about the pain your customers having and the solution that you can provide. Then we moved on to building a product, and when building a product, we mentioned how important it is to keep interviewing your customers. You want to keep getting feedback from them to make sure you're building solution that they really want. We also talked about releasing new updates often, and that's all based on what your customers are telling you. So the idea of interviewing your customers and releasing new updates often go hand in hand , and that's what's known as the iterative process, where you learn more from your customers and then you apply it to your business and repeat that we talked about testing everything, and when you test everything, you can dramatically increase your sales because you can see what's working and what's not working. And then you can focus your time solely on the things that work and stop wasting times on marketing channels or other points, your business that just aren't effective at all. And finally, it's time to protect your idea because now it's been validated with an M V P.