Business Growth Stage 1: New Venture
The biggest mistake most young companies make is beginning to execute a flawed strategy. Focusing solely on developing a product and selling it before you know the market is a fundamental, and most often, fatal mistake.
The work you do in the New Venture stage confirms your market, identifies your customers, tests the perceived value of your product, establishes your pricing strategy, and creates your sales process. In the New Venture stage you will sell to a set of customers using a repeatable sales process, and then verify that those customers yield a profitable business model.
In essence, Stage 1 is the process of discovering and validating your business model. Your goal is to develop a repeatable and scalable business model. One where you put money or effort in and you get money out – predictably.
Every new venture starts with a vision; A vision about a great new product or service, who your customers are, and why lots of people are going to buy it.
But it’s all a guess.
To turn that vision into reality, you have to replace those assumptions about the market and potential customers…with facts.
But most new companies focus solely on developing a product and selling it before they understand the market—and that’s a fundamental and fatal mistake.
Most startups fail, not because they don’t have a product or service, but because they don’t have customers and a proven business model. In other words, most new businesses fail because they make something that nobody wants to buy.
Clearly, every new venture wants to get its product to market and sell it, but that can’t be done until you understand: who you are selling your product to, what they want, why they’ll by it, and how to reach them.
To do that you start by finding a big enough problem, in a big enough market. If you can’t do that nothing else matters.
Then, you develop and test your solution in the market until there’s a perfect fit between the product and the market.
You also need to create a repeatable sales process that’s tested by successfully selling the product to a set of initial customers.
This not only proves you have found a market that values your product by paying real money for it…but it creates a blueprint to follow in the next stage.
In essence, Stage One is the process of proving that you have a business model worth scaling into a company.