Hi there -
Here is this week’s “1 principle, 2 strategies, and 3 actionable tactics” for running lean…
1 Universal Principle
“As a founder, you are Investor #1 in your startup.”
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Many founders dread the quarterly investor/stakeholder meeting. They’d much rather focus on product than get chewed out over their numbers.
But, as a founder, you are Investor #1 in your startup. And, you need to be even harsher on your numbers than a professional investor.
2 Underlying Strategies at Play
I. Time is more valuable than money.
While you may not be investing with (lots of) money, you invest with time — which is more valuable than money.
Money can fluctuate up and down, but time only moves in one direction — down. Furthermore, money can be more easily leveraged than time.
Professional investors diversify their capital across multiple buckets in a portfolio of varying risks. You, on the other hand, place all your time into a single high-risk bucket — your startup.
You have a lot more at stake than a professional investor.
II. Ideas can easily consume years of your life.
All ideas, especially good ones, can easily consume years of your life. A typical startup takes about 2-3 years to find product/market fit and 80% of startups never get there. That equates to spending up to 10-15 years in search of a good idea!
You have to constantly optimize for speed, learning, and focus in order to reduce your cycle time between ideas.
3 Actionable Tactics
I. Cover your downside while shooting for the fences.
It’s hard to estimate the maximum upside potential of an idea at the early stages, but much easier to estimate your minimum success criteria.
Minimum Success Criteria (MSC): The smallest outcome that would deem your project a success 3 years from now.
- Spend an afternoon to determine your MSC.
- This could be a revenue or impact goal.
- Turn it into a measurable customer traction goal.
- Chart a traction roadmap.
There’s a tool for this.
II. Determine your 90-Day Goal.
Use your traction roadmap to baseline your current progress and determine your next 90-day goal.
This is the only macro metric that matters.
III. Run small, fast, additive experiments.
Your true job as a founder is to systematically de-risk your business model before running out of resources.
- Use discovery experiments to uncover the obstacles or constraints standing between you and your 90-day goal.
- Shortlist possible campaigns for achieving your goal.
- Then run small and fast additive experiments to test and double down on your most promising strategies.
That's all for today. See you next week.
Ash
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P.S.
Have faith in yourself. Be ruthless with your ideas.
