Why most of the business plans are worth throwing out of the window, I know it's not easy to understand, let me pick a scenario.
You have an interesting product idea, you started working on that idea, and you have put in many efforts, wrote thousands of lines of code, etc…etc…. Then you have your MVP ready.
Once the product is ready and live, you start approaching your acquaintances, professionals, colleagues, friends, friends of friends and start revealing to everyone how fantastic your idea is. You hear pretty positive feedback from them. Things like:
Wow, Great Idea!
Sounds profitable….
“I like your idea, man!”
“I will definitely check it out.”
So, you give them access to your beta version, but a few weeks later, you observe that these are not your real customers, these are not the ones who are really excited about the idea.
So, when launching a product, companies usually believe that they are solving a problem that the market really needs to be solved. But in most of the cases the problem is not that huge. That is, one doesn’t have a product/market fit.It doesn’t matter how good or bad your idea is, it's about whether anyone really needs it and whether anyone is eager to pay for it.
A goal without a plan is just a wish, and a plan without discovery is just a thought/idea. No business plans are good or bad, they just need to “PIVOT”. Many successful venture-backed businesses are “pivots” – PayPal started as a technology to send money from PDA’s, and YouTube started as a dating site.
It is okay to fail, but it doesn’t make sense to spend good money after an unrealistic product. Your business plan needs to be the company's value proposition, customers, and distribution channels. If two among these 3 factors are aligned it will lead to short term success, if not sustainability can be a challenge. Conversely, many start-ups fail because they waste money on products that no one wants to buy.
Shipping a product without doing sufficient product discovery is almost always a failure. Product discovery is where most of the learning happens. Its techniques are all optimised to get the insights as quickly and inexpensively as possible, whereas the concept of product delivery is about creating the product we are confident in delivering, which can only be achieved after product discovery. Also, Product discovery generates the insights that inform what that delivered product should be. Product discovery leads to product market fit.
Mostly, product-market fit doesn’t happen on the first try. You’ll likely test, validate and adjust your product or service a number of times before you find the perfect combination of value proposition, customer base, and distribution. It's a continuous experiment based upon the feedback from your targeted customers. In case of vexation, tweak your concept and be prepared to pivot if necessary.
When you achieve product-market fit, your job will become much easier, as your customers and other interested audience will become a major part of your marketing effort. They’ll share their own stories with others so you can focus on the work of creating the same great experience for everyone who interacts with your company.
Uber captured product-market fit by initially offering free rides between regional tech events in San Francisco. Uber’s co-founders recognized that the taxi system was prohibitively expensive and outdated, and few people used it. Once the Uber app gained steam, Uber offered 50% discounts to first-time users.
Experts point to Uber’s ability to solve a problem and create a need at the same time. Consumers weren’t demanding better taxi service, but once a more convenient, simpler option emerged, users began to rely on the concept. The network effect kicked in and users began sharing their experiences on social media, providing social proof for the start-up.
To date, Uber has about 75 million active riders across the world, and the company recorded 5 billion rides in 2017 alone. “
The role of a culture in an organisation matters, when we are executing a product idea, we generally come across thoughts like is our product right or wrong, will it be a success. But one needs to break out of a culture of “right and wrong” or “success and failure” and replace it with a culture of “learning”.
So, rather than praising the ideas that work and condemning the ideas that don’t, we must continually focus on the insights we’re gaining along the execution process. Regardless of whether an idea is right or wrong or was successful or not, we must celebrate the learnings we gained along the process. These learning’s are mostly experienced at the time of product discovery.