Well, we all know the startup buzzword these days but can anyone give the definition of the start-up? Eric Ries, in Lean startup book rightly states,
“ A human institution designed to create new products and services under conditions of extreme uncertainty.”
Launching a new product/services, you need to pass through prerequisite activities like market research, brainstorm about the product features, marketing strategies and most importantly business model. All these activity leads to a gut feeling of the entire blueprint that there is a demand of an idea in the market and that’s called the leap of faith.
Leap-of-faith has two kind of assumptions. — Value and Growth Hypothesis (leap-of-faith assumptions). This is very important to understand before executing idea.
This is an assumption to validate the value proposition of the product. This can be validated through various experiments and observations. If you have an idea, reach out your customer by experimenting in unique way and validate whether there is a need of your product/services. The result of the experiment should prove the value of your product in the market. Such experiments ranges from 3 months to 1 year.
How did Dropbox do it?
After failing to convince the investor multiple times that file-sync is the problem and through a technology we can solve it, his co-founder created video explaining the technology and how dropbox will solve the problem, The video got viral and brought 75,000 registration overnight without even having a ready to use product.
Once the value hypothesis is established you come to what is called,
Only focus on growth after you’ve established value of your idea/product. Don’t grow a product without value otherwise you will loose your brand. Here the question is “how users find your product?”. If you have an idea for growth you should test it. If it works, keep the growth strategy active and come up with another way to grow even faster.
Facebook is a great example of growth hypothesis, It grew very fast, in just one month 3/4 of Harvard’s students were on the platform and in less than one year they had 1 mn. registered users, which shows the value of growth hypothesis.
Looking at the success of Facebook, many startups ask us should we not charge money in early days . There is no right answer to these questions. there are so many counterexamples to their success.
To get answers to these tricky and important questions, start-up should conduct experiments that help determine what technique will work for them in their unique circumstances, so ask the right questions for the problem.
Once clear on these leap-of-faith assumptions, the first step is to enter the Build phase as quickly as possible with a minimum viable product (MVP). The MVP is that version of the product that enables a full turn of the Build-Measure-Learn loop with a minimum amount of effort and the least amount of development time.
Examples from our own experience,
Let me give you example how we are doing leap of faith validations in Digicorp and one of the ventures.
One of the co-founders of Digicorp, Abhishek Desai came up with an idea around Cricket. Cricket holds the majority share, both in terms of the man following and playing numbers. There were many apps for showing live score & commentary for international matches. But, there was none looking at the local cricketers and their passion for cricket, So why not score local cricket matches and tournaments and give the local cricketers the fame and recognition like International Cricketers.
With this leap of faith (gut feeling), we built the first MVP in 3 months and quickly validated with famous local tournaments of the city clubs. surprisingly it got praised by a lot of local tournament organizers and local cricketers who are serious about scoring matches and their statistics of played matches. This proved the value of the product in the market.
This really boosted founder’s confidence and allowed him to move to growth hypothesis.
In just 7 months after launch of CricHeroes, 75k+ players got registered, scored 4000 matches and its racing fast. It proved there is a potential for growth of this idea. In our case these two (Value and Growth) hypothesis made us get going.
Even leap of faith works for established businesses too.
After 13 years of experience in working with numerous startups in different domains, size, stage and location, Digicorp has gained a rare and unique expertise in helping startups go to market successfully. We at Digicorp are validating the hypothesis that for any startups to succeed they need a solid product team. This is the real value we are adding to the world. In order to build solid product teams of self-managed and motivated people, we have to become best place to work with and have an open and honest culture. Lastly, we need to become thought leader in the area of usable product by building great products, sharing our opinions around building usable products online by writing valuable content, we have a great chance to make a great company.
Last but not the least,
Tags: Products, software products, Start Ups
these leap of faith assumptions are the real power of entrepreneurs because entire venture depends on it. If they are true, the great opportunity awaits. If they are false, the start-up/business risks total failure. — Eric Ries.