How to avoid wasting $1,000's of dollars

Lesson Details:

This course is brought to you by Appy Pie as part of our academy series in this video i'm going to talk about how most people approach the idea of building a business and compare that with lean principles so the traditional way that most people think of when starting a business is first that they have to come up with a great idea and usually this is an idea that they've been thinking about for a couple weeks or maybe even months and they've perfected it in their head then once they've come up with this great idea they think that they need to get funding for their idea and this is usually in the form of investment from a venture capitalist an angel investor or maybe family and friends then they believe once they've gotten funding for their idea they need to immediately protect their idea and that's because they don't want to lose something that they've perfected in their head that's taken weeks or even months then after protecting their idea they believe the next step is to build a team of people to work on their idea and finally after that they believe they will either get bought out or make a lot of money and the reason why I keep saying think that this is going to happen is because most businesses this is not how it happens at all but people think this is the path that they're going to take so there's a lot of problems with this mentality and first of all this mentality assumes that this person knows what their customer wants they haven't interviewed or talked to any of their potential customers they don't even interact with customers until they've built their final product and gone through all the other steps another problem with this mentality is this person will spend a lot of time chasing funding and building a team and it comes to outside investment they're not going to get anything if they just have an idea so that whole mentality that I need to create a perfect pitch just so I can get funding is really a waste of time that's not moving you forward and finally with this mentality by the time that this person releases something it's too late to make changes based on summer feedback they've already built the team gotten the funding and spent a lot of time creating this final solution before they've had that interaction with their customer now compare this with the lean mentality and this mentality starts with asking potential customers what pains or problems they are already experiencing right now and these are called pain points and once we find a really good pain point that's gonna be the foundation of our business so we keep doing these customer interviews until we find a common pain point that people are sharing then with that pain point we're gonna create a Minimum Viable Product also known as an MVP that validates that pain so what this means is even though people have told us that they have a problem this is still an assumption that we need to prove ourselves and to do this we're going to create a solution that takes the least amount of time or money investment possible and what we're looking to do with the solution is see if this is a problem that we can solve and also if this is a solution that people are willing to pay for in other words is this problem that people are having big enough that they'll be motivated to pay for a solution then once the MVP has validated this customer pain point otherwise our assumption then we want to build a scalable system that more efficiently solves that pain and what this allows us to do is build a business with confidence that once we build it people are going to purchase our product or service because it solves a problem that we've already proved that it exists and finally once you've built that scalable system then you can start protecting your idea and building a team if necessary and the advantages to this mentality is you only spend time solving problems that you know people are experiencing you're not spending time building a solution to a problem that exists in your head that you don't know if exists in the real world so that's why it's important to do these customer interviews and not assume that we know what problems people are having another advantage is you don't waste time building a product that people aren't willing to pay for so you may interview customers and realize that a lot of people say they have the same problem but when it's time to pay for a solution they don't think that problems big enough that it's worth it for them to pay money to solve it and finally with this mentality you can find ways to build your business without any money upfront so it's really efficient way that saves us money and time when building a business.