For an early-stage venture, the question, “What have we learned?” ismore important than the question, “What have we done?” As youbring your concept to life, you will move along a learning curve thattakes you from passionate belief in your idea to a more basic under-standing of how it plays out in the real world. You get to experienceyour idea in motion. But how do you make sense of all the informa-tion available? How do you separate the signal from the noise andharvest the right lessons amid the often-overwhelming stress and ur-gency of the startup path?
The four-quadrant framework provides a useful filter to directand balance your learning across four domains that drive new venturesuccess. Gathering facts, generating insight, and reducing uncertaintyin these four areas will reduce your risk and help you position forgrowth. Build a consistent practice of coming up for air to review yourplan and evaluate progress. You can concentrate your learning in the four buckets below, using the suggested questions to stimulate andguide your learning process. Treat these questions as starter list, re-vising and adding to suit your situation.
FOUNDER – As the old saying goes, be careful what you wish for. Manyaspiring founders are surprised along their startup journey to learnthat the role they envisioned for themselves is not what it was crackedup to be. To ensure that your passion and skills are aligned with yourstartup challenge, periodically revisit the questions related to founderreadiness outlined in Chapter Three with an eye toward what haschanged and what is being learned.
- What are you learning about yourself as a founder andentrepreneur? What are you learning about your foundingteam? What has been most surprising to you, and how canyou apply these insights going forward?
- What have you learned about your passion? Do you feelthe “fire in the belly” or a “weight on the shoulders”? Whatfactors contribute to each?
- Are you on a path to satisfy your core purpose for makingthe entrepreneurial leap? Have your reasons and goalsshifted? If so, how and why?
- Where is the emerging fit between your skills, experience,personality, etc. and the requirements of your new venture?
- How can you better deploy your strengths and cover foryour gaps? How are your core team’s strengths andweaknesses playing out in the venture process?
- Are you bringing your best energy, focus, and performanceto your venture? If not, what factors stand in the way andhow can you best address them?
MARKET – Without a ready market there will be no venture, so findingyour market sweet spot is the primary purpose of early iteration.Here are a few specific questions to ensure that you hear and makesense of what the market has to say.
- What have you learned about your core customer? Who arethey? Who are they not? What motivates them to use yourproduct or service? How are they using it, and what valueare they deriving?
- What have you learned (or what has changed) about theoverall market opportunity? What new opportunities andthreats are emerging and how might you respond?
- What have you learned about competitors? Who issucceeding in your space and why?
- What factors are driving sales (or lack of sales)? What isworking or not working about your customer acquisitionprocess?
- How can you best differentiate your venture and yourofferings, based on what you have learned? What is yourclearest competitive advantage at this time?
MATH – Once you are up and running and are delivering products andpaying suppliers, you can begin to better understand the economicviability of your concept as it plays out in the real world.
- How has your math story played out so far, compared tothe plan? What are you learning about the basic economicsunderlying your business model and strategy?
- What key planning and financial assumptions underlieyour model and how are these testing out? How might yourplans change as a result?
- What are you learning about the dynamics of profitabilityand return (R = M × V, from Chapter Five), and whatfeasible opportunities to increase returns are emerging?
- What have you learned about your venture’s ability togenerate cash? How are cash reserves relative to your plan?
- What have you learned about required resources andcapabilities going forward? How might this impact yourstrategy, costs, and timelines?
- What is working well or not working well about yourapproach to financial planning and controls? How well areyou staying on top of the numbers?
EXECUTION – Getting things done in a startup environment tends tobe more difficult than new founders expect. A key aspect of your newventure learning curve is mastering the elements that must come to-gether to execute on the business plan and strategy.
- Talent. Where are strengths and gaps in terms of talent?Are the right people in the right roles to propel the ventureforward?
- Systems and processes. What’s working well in these areasand where are weaknesses or vulnerabilities? What hasbeen learned about technology opportunities and risks?
- Teamwork. What are you learning about the role ofteamwork in accomplishing the venture’s goals? Where istight teamwork necessary and where should people runindependently?
- Communication. What communication patterns havedeveloped within and outside the venture? Are goals andpriorities clear? Are tough issues being discussed candidlywith the right people in the room? If not, why not?
- Alignment. How well are the goals and interests of keystakeholders aligned with the goals and priorities of thebusiness? Where are areas of misalignment—wherepersonal motivations or needs are in conflict with thebusiness need—and how can these areas be better aligned?