Early Stage Business
A specialised approach to search for product-market fit.
Harvard Business School research has found that 75% of all early stage businesses fail. One of the key drivers of this failure rate is the approach that early stage businesses often follow.
For many years people have approached creating an early stage business like you would approach creating the next product in a big company. In a large company, you have a series of “knowns.” You have known customers, channels, and partners. You mostly know what features those customers want, and you could create a credible forecast. Most of the time the focus is on execution.
However, an early stage business is not just a smaller version of a large business.
Large businesses execute known business models. In an early stage business you assume everything. On day one, you’re just using a set of hypotheses—guesses—and are actually searching for an idea for a plan. If something in an early stage business doesn’t work, the problem is probably not in execution, but in product-market fit.
Early stage businesses are searching for repeatable-scalable business models.
Early stage businesses need to articulate the components of their business model, and get out of the building and test them in front of customers as early as possible. Employing a specialised approach to search for this product-market fit can make the process significantly less risky.
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