Small Business Development Center
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What Small Biz Can Learn From the Tech Industry

By Chemeketa SBDC

“The Lean Startup” has become a book that every tech entrepreneur has read and quotes regularly. Eric Reis, the author of the book, coined the term “lean startup” to reframe what it means to be a startup and the process that a startup should follow to ensure success… or at least to take a good stab at it. The main premise of the book is that a startup is simply a
series of experiments. Experiments that have a hypothesis (an idea to test), limited variables to test (test certain aspects of your idea, not the whole idea at once), and success measurements (how you know when you succeeded or failed).

By executing and completing these experiments, you are continually refining and defining your product and target market. Through the experiments, you might find out that no one will buy your product, or that a completely overlooked demographic is actually your target market. In the long run, testing small aspects of your idea will save you time and money because you will be forced to focus on the product that will sell and not on superfluous
aspects of your business that do not contribute to your bottom line.

While “The Lean Startup” is written specifically for tech startups, the principles can be and must be applied to small start-up business and social ventures. Here are some examples on how applying the lean start-up principles might look in a small business.

Business idea: Car mechanic Hypothesis: People want a car mechanic in a convenient
location.

Experiment: Find a neighborhood that has to travel 5 miles to get to a car mechanic. Go door to door and offer to provide basic services at their residence.

Measurements: Get 30 percent of car-owning neighborhood residents to pay for services.

Why it works? You will be able to determine if a convenient location is a problem. You will start to build a customer base before making the capital investments into a building.

Business idea: Organization services

Hypothesis: People want to get organized because it makes them calm.

Experiment: In the same time frame, send out two sets of marketing materials. One that uses words and colors that reflect calm, peace, tranquility, etc., and the other that uses words and colors that represent efficiency, time-saving, productivity, etc.

Measurements: Record which marketing materials created the most interest.

Why it works? You will be able to see what motivates people to get organized and develop a customer-centric marketing strategy.

Using the lean startup principles can be intimidating and might be counter intuitive to traditional startup thinking. The fact is you can plan as much as you want but in reality business plans reflect the world that’s in your mind, and not the world that actually exists. To start a successful business from the beginning, you need to be in the trenches with your
potential customers.

Now time for my experiment: Are you interested in learning more about lean startup rinciples and how you can incorporate them into your startup or existing business or nonprofit? If you are, contact me at kmozian@chemeketa.edu or 503-399-5088 and let’s chat.

Kristen Mozian is a business advisor working with the MERIT Microenterprise Program at the Chemeketa Small Business Development Center, www.sbdc.chemeketa.edu.

About Chemeketa SBDC

We provide the tools and environment for small business owners to make great decisions.

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