Steve Blank, Adjunct Professor at Stanford University, in the Department of Science and Engineering, is well known for his lean business principles for startups. He is an experienced technology entrepreneur as well.
His ideas will never go out of style. Before this recent crisis, it was too easy for start up companies and investors to get caught up in business and investment manias with funding too easy and valuations very high. These days, we are already more back to basics, so the good news in all this chaos is that both businesses and investors are starting to pay more attention to these lean business ideas again. Just because you are lean does not mean you are not creative. It is quite the opposite. Many of the products and services that are successfully launched right now will do very well even after the emotional trauma and fear of this pandemic start to fade. Not only that, the entrepreneurs that are successfully pivoting now are far more efficient and resourceful. These principles are all part of the complex adaptive system methodology we follow for our investment process. It is going to be much easier to find companies that are following these principles after this crisis as more and more entrepreneurs creatively adapt and move forward. It is already clear that there will be amazing investment opportunities in this newly emerging paradigm of small companies that rise like a phoenix from the ashes. They will be stronger, more innovative, resilient and more powerful than before.
Here is a brief section of Steve Blank’s recent blog on this pivoting process by small businesses. It is full of hope, inspiration and practical information. https://steveblank.com/2020/05/20/seven-steps-to-small-business-recovery/
What doesn’t kill me makes me stronger
Shelter in place is a mass extinction event for many industries. Not every business will survive. But what will emerge are businesses that diversified their offerings better positioned to withstand future volatility by providing complementary channels and offerings. And they’re opening up new ways service providers can scale to more customers.
I think our Paint Mixer business is changed forever,” Jill Johnson says. “For the first time we now have a service that allows us to reach a national audience way beyond our local area. It will also allow us to create more classes that people can join virtually. I don’t think this is a short-term solution at all, but an entirely new direction that we have to take.”
Jordan Edelson of Chic Sketch observes, “There has been a paradigm shift in consumer behaviors, especially in their adoption and emotional acceptance of virtual video conferencing. The world changed overnight, and it has opened a door for our new service.”
- The Seven-Step Small Business Pivot Process
- Create an MVP or MVS, Minimum Viable Service
- Do Customer Discovery
- Rapidly test your idea
- Refine your offering
- Market on all your channels
- Rely on tried-and-true tools
- Share with the community
- Carpe Diem – seize the day
We’re going to be holding a series of 5-day Hacking for the Recovery classes for businesses searching for the new normal at Stanford this summer. If you’re affiliated with Stanford, find out more or sign up at https://h4r.stanford.edu