First of all, before I start off with the series, let me make you aware of certain concepts so that you are ready to dive right into the series.
What’s a lean startup?
First things first, a lean startup, unlike a proper business, is either a do-it-alone kind of a business or a business with fewer than 10 people working towards the ultimate goal. Just because only one person is doing the business or because only very few employees are there doesn’t mean that the business is actually very small. Even these kind of businesses can generate a sizeable amount of be revenue and can also make a lot of difference in the world (think WhatsApp).
If only one person is doing the business, how is it different from being a freelancer?
A do-it-alone kind of business provides far more stability than a freelance work does. Freelancers typically work on an hourly basis for money while a do-it-alone entrepreneur slowly establishes a system that frees most of his/her time for him/her to work on developing another aspect of their startup substantially. On the whole, during tough times in the economic and the job market, freelancers struggle to get work while the do-it-alone entrepreneurs don’t struggle as much because they would have already set up a system that works for them even when they don’t.
Who can create lean startups?
I can’t tell you who can create lean startups because I am not qualified enough to say who can and who can’t. But, I can tell you who have done it before. Young people with nothing to lose, people who have mastered internet skills, people who quit their corporate jobs after a few years of experience to work on their ideas, people starting independent careers, people of different nationalities, etc.
Yes, before you can start up a business of some kind, you need to have at least one skill that will take your business forward. If you have nothing in your skill set, you won’t end up much farther from where you started.
What kind of products can lean startups create?
Well, there are no set rules as to what kind of products a lean startup can create, but there is only one rule – it has to provide some value to a lot of people. Other than that, there are no rules or limits as to what one person or a small group of people can accomplish.
How can a startup with only one person or very few countable number of people doing the business create something of huge value to the world in the long run?
Well, there is only one answer – OUTSOURCING. With respect to most of the powerful & highly valued startups, it doesn’t matter if it’s being run by a single person or if it’s being run by a very small team of people. You know why? Because, only the important tasks of the business are done in-house and all the other tasks are outsourced. If the business is done by a single person, he/she essentially works on only those things that he/she is very familiar with and outsource everything else, mostly to freelancers or some services firm that provide that particular service that he/she seeks. The responsibility of completing some tasks can even be left alone to a software or a plugin to take care of.
How much capital does it take to launch a lean startup?
It depends. I have launched a media/news publishing website as an online startup and it cost me only $10 to get the domain name and launch it after designing. I used the already existing shared hosting to get it online. However, I am gonna have to invest some money in promoting and marketing the website to increase the readership and the follower count.
Usually, the investment will grow as the business and the consumer base grows. Initially, the person who owns the business or the team that runs the business will have to shell out some amount, depending on the scale of the business and then once they start making profits, they usually reinvest the profits for the growth of the business.
Why should I outsource?
There is a quote among the business gurus – “Do what you do best, let others do the rest”.
That’s the only answer for this question. Why, you might ask. Remember the 80-20 rule that I talked about in my time-management series? That’s the one rule which you have to apply here. 80% of value will come from the 20% of things you do. If you choose to focus only on those 20% of the things in your business that will bring in 80% of the value, you will see far more results than when you take on everything single handedly. Usually, this means you should outsource every single aspect of your business that belongs to the rest of the 80%, more so if you are a do-it-alone entrepreneur.
So, focus on your ultimate strengths and leave the responsibility of the rest to people who do it best. Even in that, outsourcing it to agencies is better and more cost effective, more cost efficient and time efficient than hiring your own employees, setting up an office space, paying for everything, and managing everyone.
Employ what is called nowadays as extreme outsourcing.
Extreme outsourcing simply means that a specific function is handled not by the entrepreneur’s business but a separate business. Extreme outsourcing is farming out absolutely everything except the core functions, which are designed to capitalize on your greatest strengths. Today, this type of outsourcing is easier than ever because of the Internet’s communications capabilities, creating the instant exchange of information between separate companies that can be physically located thousands of miles apart.
Innovative go-it-alone entrepreneurs employ extreme outsourcing because they recognize that their most valuable asset is their time, which allows them to achieve an unprecedented degree of focus. They know that they may be capable of doing many things, but they are constantly setting priorities that will best build their businesses.
If you are going to improve and scale your business to a larger audience/consumer base, you are gonna have to do a lot of work. You can’t do it alone coz then, you will have no sleep and you probably can’t serve to more than 10k people maximum. So, at one point or the other you’re gonna have to either hire more people and manage them (which you obviously don’t want to, if you’re a do-it-alone kinda entrepreneur) or you’re gonna have to outsource the responsibilities to people who do it best, outside your firm. It’s as simple as that.
How can I scale my startup in the future? What are the things that I should do for the startup to be able to scale to a larger consumer base?
The key to success in a lean startup, especially with respect to scaling the business is to find a way to make the different aspects of your business as repeatable as possible. The business should be done in such a way that it will have a particular routine, particular aspect of repeatability attached to it. There has to be a repeatable formula with which your company must run. Only then, when you have to grow out of your existing circle of customer base to a larger circle of customers that you will serve, will the transition be possible and easier too.
I don’t have a business idea. What should I do? Where should I start?
If you want to do business and if you don’t have an idea as of now, try this. At one or the other point in your life, recently or in the past, you’d have encountered a problem, solved it yourself and you’d have thought ‘if I needed this, there would be other people who’d need this too!’. The solution you found for your problem is what you should provide as a solution to the other people who need it. You could also create a business out of it if you can find a way to make the solution scalable.
In the next part, I am going to discuss the basic groundwork that you need to do to set yourself up for success in the business that you start either as a small team or as a do-it-alone entrepreneur.