Monthly Archives: May 2012

Sell first, build later… Otherwise known as validate your market

When I talk to start-ups I often talk about the idea of sell first, build later. When I look back at the Learning Pool story, adopting this strategy was a key ingredient of our survival in the very early days and I have no doubt that ability to execute in this way has stood us in good stead as we’ve grown. Before explaining why I think this is good idea for early stage companies, a few health warnings:

  1. You can really only do this as an early stage company. When you get bigger the stakes and the expectations are higher and the risk around doing this becomes intolerable;
  2. Its easier in a business to business sale than in a business to consumer environment although you can do elements of this in a b2c setup;
  3. This is not a strategy really. It’s more a tactic to get into the market and get in front (virtually or physically) of a customer. You shouldn’t forget this bit because it’s maybe the most important element and you have to be ready to grow away from this approach;
  4. You simply must execute the build bit… otherwise your credibility, and with it your business will disappear down the toilet!

All that said, I think there are compelling reasons for adopting this approach, namely;

  1. Its all you can afford when you are a very early stage company with no cash and a window of opportunity that’s closing fast;
  2. it’s a great way to validate your market and best of all, you get to see, and if your lucky even talk to your customers to find out what they like, what they need and what they might want in the future;
  3. You find out whether you really can build this thing and identify the holes in your delivery machine that must be fixed;
  4. You get track record and proof, or otherwise that your concept is viable;
  5. You get to change direction and focus on the things that make the biggest impact for your customers based on real data and honest feedback. You also get to tweak the business model, pricing or pitch if you need to;
  6. It gives you working capital to get the rest of the product built.

One of my best memories of this in the Learning Pool story is when we’d sold a product to a large organisation before it was completely built. We were totally up front with them about it and immediately got to work on building the product so that we delivered on what we promised. A couple of months later we went to see the customer on a sunny day and sat outside their office meeting our contact and celebrate a successful project. She started the meeting by giving us a cheque for more money than the company had ever billed up until that point. When we got back in the car I asked Mary if she remembered anything of the meeting after seeing that cheque… Nope.. me neither! It was a great laugh nonetheless!

Saying goodbye to features can be a good thing!

We’ve been doing a ton of cool stuff at Learning Pool recently including replacing a lot of our core technology with more up to date, more flexible and more usable solutions for our customers. This is always an interesting conversation because there’s always a tendency to continuously build on top of what went before and one of the things I’ve discussed with the team on at least 6 occasions in the last month or so is about the argument that we should somehow recreate something that used to be there and then build the new thing on top of that.

Here are my reasons for thinking this is a bad idea:

  1. It assumes that the thing we currently have works and is great. This is not always the case and whatever it was, it was probably built in a hurry or with limited technology. Having time and better technology does not make the case to maintain anything;
  2. If you keep building on the same platform, nothing ever changes…. not really.  That means that customers don’t get the opportunity to benefit from innovation, creativity and smarter thinking;
  3. It assumes that customers like what is already there. While that is sometimes the case its not always true so shouldn’t we just ask them?;
  4. It takes ages…  and even for a post start up business like Learning Pool, time is at a complete premium

GarageMy starting point in these conversations is always to think of this like my garage. My garage is a complete and unholy mess. It’s full of kids toys, gardening stuff (who knows why), kites and wedding presents that didn’t make the grade. Honestly, there’s some awful  stuff in there. About once a year I finally relent and reorganise the garage. It takes a few hours but gives me a sense of unusual satisfaction when it’s done.

Here’s how I approach it:

  1. I take everything outside into the rain so I can see the whole floor;
  2. I clean out the remaining shell, invariably finding some stuff that I’d been looking for for ages;
  3. I start to put things back in in a way that makes sense and will be easy to get that stuff back out – the kites go in first (sad face) and the kids bikes go in last. The lawnmower goes somewhere in the middle
  4. I look at what’s left and ‘organise’ it into the bin

It’s a fool proof system and one that I’m ‘convincing’ the team to put in place. If you’re reading this and your a Learning Pool customer you can blame this if something’s just gone missing. Hopefully though you’ll like what we’ve done with the place along the way!

Oh, and if anyone wants some carriage clocks… I have plenty!