The Entrepreneur's Guide to Creating and Managing Breakthrough
Nathan Furr / Paul Ahlstrom
Summary
In this book, Nathan Furr and Paul Ahlstrom give us a guide to how entrepreneurs should build their companies via their five step process Nail it then Scale it:
- Nail the pain
- Nail the solution
- Nail the go to market
- Nail the business model
- Scale it
Without following these steps, entrepreneurs will by default be led down paths that lead to failure, such as falling in love with their product and spending years building a vision no one shares.
The most important aspect throughout all of this is heavy feedback from customers.
Nail the pain
Nailing the pain means this thing should probably be a 4 or 5 on the pain scale for potential customers. When you do come up with the idea, reach out to customers directly for feedback on the product being proposed to build. If it’s b2c you can use a landing page, etc. to gauge customer interest.
Nail the solution
The goal here is to develop the minimum set of features that will drive a customer purchase. When getting customer feedback, ask the customer if they had $100 to invest in any features of this product, which features would they invest in.
Nail the go to market strategy
Similar to nailing the solution, figure out how customers will hear about your solution. Ask them how they hear about other products. Figure out all the players between you and your customer that could influence the customers purchasing decision. Company → partners → influencers → advertising → customer. This all needs to be thought about.
Nail the business model
Scale it
My Thoughts
For the pain scale, could probably be lower for a smaller startup. The big take away is — incorporate your customer at every point in the process.
Quotes
The entrepreneurs paradox: entrepreneurs only act when they believe they have a real opportunity but this belief can lead them to fail
Edison saw congressman inefficiently voting one by one calling out their votes. He invented a much faster automated voting system but when presented to Congress they didn’t want it. There was politics in calling out your vote. This is when Edison realized the benefit of talking/working with customers
Market insight comes from customers but not from asking them directly. Had ford asked customers what they wanted, they would have said “faster horses”
There’s two types of risks in innovation — technology (can we build it?) and market (will customers buy it?). For example, curing a disease has low market risk but high tech risk. Next big website has high market risk, low tech risk. Most entrepreneurs focus on tech risk but market risk is why 90% of businesses fail.
There’s three myths of entrepreneursihp:
- The hero myth: Believing in your product leads to failure
- Not believing negative feedback means product is not tied to reality
- The process myth: why building a product leads to failure
- You can’t build a new product the same way as large orgs; searching for the right solution is very different than executing on an existing one
- The money myth: why having too much money leads to failure
- Money provides cushion against the cold hard work, but not necessary