Hi there -
Here is this week’s “1 principle, 2 strategies, and 3 actionable tactics” for running lean…
In 2006, with just six months of runway left and an unfinished product, my friend and mentor, Bjoy Gowami, asked me this simple yet powerful question at a coffee shop in Austin:
"Would you rather spend the next six months pitching to investors or pitching to customers?"
While everyone advised fundraising, his counterintuitive guidance led to a complete strategy shift that saved my business.
2 Underlying Strategies at Play
I. Demo-Sell-Build vs. Build-Demo-Sell
Instead of building a perfect product first, focus on selling the vision to customers through pre-orders and advanced payments to establish your minimum viable runway.
Yes, this is the Demo-Sell-Build framework for building Mafia offers, which I cover in my Demand Validation playbook.
II. Chase Customers, Not Investors
When running out of money, the instinct is to chase investors. However, focusing entirely on customer acquisition can lead to break-even operations, eliminating the need for outside funding.
3 Actionable Tactics
I. Focus on One Full-Time Job
Choose between pitching investors or customers - you can’t effectively do both simultaneously.
Or, if you're not interested in chasing investors: Choose between pitching customers or building your product - you can't effectively do both, either.
The trick: Figure out customers, and the other two take care of themselves.
II. Establish Minimum Viable Runway
Use customer pre-orders and advanced payments to fund product development instead of seeking external investment.
I can't recount the number of comments I've gotten on this being impossible.
It won't work for me because:
- my product is different,
- my customers are different,
- my country is different,
- my ___ is different.
It's NOT.
Bijoy's advice years ago led me to bootstrap my first product to profitability, a playbook I've repeated with all my subsequent products.
III. Avoid Falling in Love With Your Solution
I know it's like saying: "Give up ice cream".
But turning an idea from a passion project into a business requires discipline.
Having more passion for your solution than your customer's problem is a problem.
Don’t let passion for a specific solution blind you to customer problems. I've been there with my 7-year experience with a “zombie startup” in peer-to-peer technology.
And getting out and flipping the script was a pivotal turning point in my startup journey. And my hope is that you sidestep this pitfall.
"All I Want To Know Is Where I'm Going To Die So I'll Never Go There"
- Charlie Munger
That's all for today. See you next week.
Ash Author of Running Lean and creator of Lean Canvas
P.S. Check out this week’s video: 20 Years, 7 Companies, and Everything I Learned the Hard Way
