During a mentoring session this week with a couple potential startup founders I was trying to make the point that the newer approach of entrepreneurship uses an iteratively developed “business model” to guide the process of using “lean experiments” to “build, measure, and learn”. That seemed way too complicated and nuanced to make a lot of sense to someone new in the startup world. I then suggested that the new “hypothesis testing” method of entrepreneurship is different from the old “write a plan” method. Or even better was that the old paradigm of entrepreneurship was based on an entrepreneur having a new answer and trying to find people with the question and interest in the answer. The new paradigm is based on an entrepreneur having a new question and finding the people with the answers and interest in the question.
How could someone make some money driving other people around?
How could someone rent out an extra room for a night?
Why would someone want their messages to disappear in a few seconds?
Who would be interested in watching short home made videos?
The hallmark of the times is the question and how an entrepreneur builds a business model by testing the right-question next and uses the process to iterate through the customer development process in search of the next powerful new company. The focus on the question helps to also make Steve Blank’s point that, “A Startup is Not a Smaller Version of a Large Company“. Blank goes on to say,
“Startups are companies that are still in the process of searching for a business model. Ventures that are further along and executing their business models are no longer startups; they are early-stage companies.” (Steve Blank)
The process of “searching for a business model” is driven by asking questions and listening, rather than selling answers and overcoming objections. A startup needs to master the question (searching) and the process of finding answers leading to a validated business model and ultimately an investible new “venture” or company. On the other hand, a company needs to master the answer (executing) and the process of maximizing the return on investment required to create the company. (Investible here means not only financial attractiveness, but also attractive to founders, employees, vendors, distributors and of course, customers and the time, energy and money they must all invest.)
Entrepreneurs – What question are you working on? How is that question leading you to find the people you need to create an amazing answer?
For more about questions, you might enjoy this – Why the Best Innovators Ask the Most Beautiful Questions