So you’ve got a business plan, some funding, and a business structure. Now it’s time to get to the nuts and bolts of the business and start to get things done. The main question though is, how do you start operating the business if you have no idea what works and what doesn’t?

This is where the Lean Dashboard (for reference click here) comes in and the main focus of this next series of articles is going to explain each part of this tool so that you are able to use it in your startup. Today we are going to look at the first section of the Dashboard: the Milestones.

So what are Milestones? Milestones are key objective that you set out very early that will allow you to know at what stage you are in your business and where you should spend most of your efforts.

 

 

The 3 key problems that your business needs to resolve throughout its lifetime are these:

  1. Can our solution resolve our customer’s problems? (Problem/Solution fit)
  2. Is there a big enough market for our solution? (Product/Market fit)
  3. How do we replicate the business model to expand quickly? (Scale)

 

 

  1. Can our solution fix our customer’s problems? (Problem/Solution fit)

In the first phase of this journey, we need to figure out whether or not our solution can adequately solve the problem that our potential customers face. This is before any sort of market segmentation and targeting. We are looking to simply figure out DOES OUR PRODUCT WORK? Therefore, how do we validate an idea in the early stage and what do we consider to be a reasonable MVP (minimum viable product)? Generally, in this phase, we are usually looking at a timescale of approximately 2 months with a goal of perhaps 20 customers. Of course, depending on the type of business that you run, these figures may vary. But this is the point, to determine the key metrics that will allow you to consider your product a viable product and to set an objective of what that looks like. Is it to have 20 customers satisfied with your product? Is it to have an app that only crashes once every 100 uses? This is for you to determine. By the end of this phase, you will know: if there is indeed a significant enough problem that customers are interested in a product to solve it and whether or not your product can fix it.

  1. Is there a big enough market for our solution? (Product/Market fit)

In the next stage, we begin to focus on who our target customer is and what our strategy will work in order to gain a large enough revenue base. This is where we begin our efforts on marketing the product and figuring out what marketing strategy works best and in what market our product is most likely to succeed. Now that we know that our product works, the main question becomes WHO WANTS TO BUY OUR PRODUCT? Therefore: are there enough people interested in my product to keep running my operations? Here we are usually looking at a timescale of about 1.5 years and approximately 200 customers. At this stage, we need to determine what metrics we will use to measure the success of our product in a specific market. This may be one such as the conversion rate on sales leads, the number of visits on our website, or our spend per customer. In this case, we need to look at the industry in which we are working and pick the most relevant metric. Again here, the objective to set is based around, how do we know that our product works in this market? Is it the amount of total revenue? Is it the number units sold? Again this is industry specific and needs to be determined by you. By the end of this phase, you will know: If there is a large enough market to sustain your business and what that market looks like.

  1. How do we replicate the business model to expand quickly (Scale)

In the last stage, we are now focused on how we can replicate the success of our business on a national and international scale through scaling. This is the stage where we begin to focus on the critical aspects of running the business that need to be replicated and how we simplify our processes to achieve this goal. Here the main question becomes, HOW DO WE REPLICATE AND GROW? In this stage, we may look at metrics such as the growth rate of customers or the growth rates of our outlets and production. The main idea here is that, we know our product works, we found who is willing to buy it, now how do we scale up production and focus our efforts towards converting as much of that untapped market into customers. Here you will once again need to figure out what is considered a success in terms of expansion in your industry and set it as a concrete objective. By the end of this phase, if everything works, you will have built a successful large scale business.

 

 

Thank you for taking the time to read this blog. In the next chapter of this series, we will be looking at the process of building experiments to accurately hypothesize about what may work in regards to the very operational objectives of the business. Essentially the whole process of the Lean Dashboard is to slowly remove the uncertainty of whether or not the business can work. We have attempted to do this on a macro scale by setting milestones and we will be doing this on a more micro scale in the next article. As always, if you are a startup looking to launch your business and are looking for a place to work, be sure to check out our website and pay us a visit if you are around the Place de la Riponne!