Blog posts tagged in Start-ups
John has been working in the HR industry for the last 20 years and has worked with various small to mid-size corporations in the US. For the last 6 months, John has been mulling over an idea for a software development product. He has been searching for the available products in the industry and found nothing that satisfies him. He can clearly see a gap and an opportunity for a great product. John discussed this idea with a friend Harry and he also seems to be very positive about it. John has no idea where to get this product developed or how to get it developed and what it will take. Harry has been working in a company which has outsourced a project and suggests John to try outsourcing the development of his idea. John likes it very much and started his search for the right company to develop his idea.
 
Outsourcing the development of a software product can be a great idea and it can yield excellent results in a very cost effective way. But the first step to get product development through outsourcing services is the key to success. This first step is consulting and finding the right partners for that. A great consulting partner can help you in many ways.
 
  • Market research – When you thought about the idea, you must have done a preliminary market research. But a professional consulting partner can help you with a thorough research for your idea. He can help with competitor analysis, gap analysis, product positioning, target demographics and give you a clear picture of how useful your product can be.
  • Converting an idea to a business case – Once you are convinced that your idea has the space and potential to fit in and do well, the next step is to give your idea a shape. The consultant can help, put your idea on pen and paper. This gives a concrete shape to your idea. When it is written, the idea converts to a business case.
  • Identifying the right channel to deliver your idea – Today’s world is full of channels through which you can reach to your customers. Your idea can be delivered through web, social channels like Facebook, applications on computers, mobiles etc. It is a key to understand the strength of your idea and your target demographics. Based on that right delivery channel(s) need to be chosen for the idea. Your consultants will show you statistics for usage of different channels based on demographics (location, age). A professional business consultant will help define that. 
  • Identifying the right technology – Once you know what needs to be developed and how it needs to be delivered, the next step is to choose the right technology platforms to develop it. Do you want to go for proprietary solutions or open source solutions? Which platforms, frameworks, programming languages and databases do you need? An experienced software solution consultancy partner will help you choose the best technology platforms to deliver your requirements through your chosen channels.
  • Finding the experts – Now you know the skills that you require. The next step is to find and hire those skills. At this level, your consultant will act as an effective HR for you and get you the right people to do the job.
  • Planning the execution – Now you have everything that you need to build the project. Its time to plan the execution. Today’s world does not want to wait for an year to get a taste of a new product. If you are going to take an year to bring your idea to world, someone else will get it out earlier. It is the age of MVP (Minimum Viable Product). Do not build too much. Do not try to give everything. Keep your idea lean and get it to the end users quick. Your users will tell you what they want most and build that. Give them what they want and not what you want to give them. Consultant will now put on the Product Manager’s hat and help you plan this.
  • Marketing – You are not building the product for yourself. You got to sell it as well. Your consultancy partner’s job is not complete until he helps you with marketing your product as well. Product development is just a small part; the big part is how you market it. So, consulting is the first and key step to getting an outsourced product developed and it helps you get the right resources for not only development but getting your product out and LIVE!
 
Harry introduced John to his offshore partners, Evon Technologies. John is now a happy client of Evon Technologies and has been working with Evon form last 6 months. The first prototype of his idea was launched in 4 months time, as an alpha release of the product. The Beta launch of the product is scheduled to happen in 1 month. Evon Technologies is providing complete end to end consulting services to John as a one stop shop preventing him to run at multiple places to satisfy his wide range of needs. 
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Most Technology Start-ups take the following conventional approach in their endeavour to start a successful business :

 

- prepare an elaborate business plan

- pitch it to investors

- build a team

- develop and introduce a product

- sell the product

 

Research shows that 3 out of 4 start-ups end up failing in their endeavour somewhere along this path. In most cases, further the stage of the failure from the point of inception, higher is the cost of failure. 

 

The alternative Lean approach for Product Development by Start-ups is essentially based on the following philosophy :

 

- build a 'minimum viable product' based on continuous 'customer development'

 

In the Lean Start-up model the founders do not begin with a business plan, instead they begin with the search for a business model. In this approach, multiple quick iterations of experimentation and feedback are conducted which result in a business model that is executable.

 

This will typically follow the following sequence :

- Translate idea into business model hypothesis.

- interact with one or more customers to test the hypothesis and validate the assumptions about the customer needs.

- create a 'minimum viable product' to fulfill a customer need

- let your customers try out the product and get feedback

- based on the customer feedback develop the next iteration of the 'minimum viable product'

 

 

Business Model Hypothesis :

Founders are expected to briefly describe the hypothesis in a framework called Business Model Canvas. This involves listing out how the company will create value for itself and for its customers in the Business Model Canvas (shown below) provided by Business Model Generation. This is a template in which you need to answer a set of questions under 9 key areas resulting in the business model hypothesis.

 

canvas1.gif

Business Model Canvas

(SOURCE:WWW.BUSINESSMODELGENERATION.COM/CANVAS)

 

 

Customer Development :

Lean Start-up approach requires the founders to test their hypothesis with the potential customers. The founders reach out to the potential users, purchasers, and partners for feedback on all aspects of the business model including product features, pricing, affordable customer acquisition strategies and distribution channels. The feedback can result in the business model hypothesis being improved upon or an coming up with a new business model hypothesis by dumping the existing idea.

 

Agile Product development :

Lean start-ups practice something called Agile Development for product development. Agile development works hand-in-hand with customer development.

 

This approach does not involve the typical long product development cycles which run for several months and is based on assumptions of knowledge of customers’ problems and product needs. Agile product development aims to develop the 'minimum viable product' which include the minimum features for solving the specific customer problem. This minimum viable product is then tested with the potential users and customers to confirm that the objectives are achieved. This approach eliminates wasted time and resources by developing the product iteratively and incrementally and testing the 'minimum viable product' at the end of each iteration.

 

b2ap3_thumbnail_Agile-Development-Diagram.jpg

Agile Development

 

 

In conclusion, the Lean Start-up approach has the emphasis on nimbleness and speed and aims at reducing the cost of failure by the inbuilt mechanism of feedback and course correction at each stage.

 

New ventures can follow this approach to rapidly assemble minimum viable products and elicit customer feedback. This customers input is continuously used to revise their assumptions and then go through another development cycle, testing redesigned offerings and making further small adjustments (iterations) or more substantive ones (pivots) in case of ideas that are not working.

 

We at Evon Technologies have gained extensive experience in the above approach over the past eight years by working with many Start-ups. We can be a partner and service provider for Start-ups in their execution of the Lean Start-Up Model, by providing services in the following areas :

 

- Market Research

- Optimizing your Business Model

- Developing Market Requirements into Product Road-map

- Software Product Development and Quality Assurance

- Internet Marketing.

 

Learn More about Lean Startup Methodology : http://theleanstartup.com/#principles

 

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