Here’s my “Startup” column for the May 2015 issue of Christian Computing magazine.
Over the past couple of months, I’ve introduced the concept of a “startup” and we’ve discussed why the church should really care about startups. As you’ll recall, we’ve developed this definition for our discussion: A startup is a new venture working to solve a problem where the solution is not obvious and success is not guaranteed. Last month we learned that the Lean Startup methodology introduces the scientific method into the new venture process, with multiple hypothesis-test-observe-refine iterations. But how can we implement this in our ministries (and our businesses)? What does it look like in practice?
The Business Model Canvas
For startup businesses, the Business Model Canvas has become the foundational tool for building a Lean startup. Strategyzer.com developed the canvas and makes it freely available for anyone’s use. The Canvas replaces the traditional 100 page business plan with a one page summary of how the business will work. In the center of the canvas is the Value Proposition. The right half of the Canvas is about the target markets, channels to reach those markets, relationships to deliver the value proposition to customers, and the resulting revenue. The left half of the Canvas is about the key partnerships, resources, activities and resulting costs of running the business. In each of these 9 boxes, you would spell out your hypotheses. What do you think the value proposition is? Who do you think the target market is? What do you think are the key resources? Who do you think will be key partners? In the Lean methodology, the key then becomes testing all of those hypotheses, continuing to refine the business model until you have something that will really work – delivering real value to specific target customers in a way that is financially sustainable.
Steve Blank is one of the best teachers on the Lean Startup methodology. He has created a series of videos for the Kauffman Foundation that provide an excellent introduction, explaining these different components of the business model and how to test hypotheses. The videos can be found online at http://www.entrepreneurship.org/Founders-School/Startups.aspx. One of Steve’s students at the University of California at Berkeley, Eric Reis, has written an introductory book on the topic, simply titled The Lean Startup. If you like having a book to guide you through the process and as an ongoing reference, I highly recommend this volume.
The LEAN Startup Machine Validation Board
While the Business Model Canvas is a great tool for startup businesses, it likely is a poor fit for startup churches, ministries, and programs. We care about loving and serving others to the glory of God rather than being focused on revenue and profits. A much more streamlined tool has been developed by LEAN Startup Machine, an organization that holds 3 day workshops around the world to help entrepreneurs quickly launch new startups. The initial version of their tool was called the Validation Board and it can be found at https://www.leanstartupmachine.com/validationboard/. The company has developed a new version called the Experiment Board, but for our purposes I prefer the simplicity of the Validation Board.
The Validation Board is designed around three key elements: the customer, the problem, and the solution. You start with hypotheses around the customer and their problem. Who needs to be served and what is their problem that you can address? The problem needs to be stated in the terms they would use, not the terms that you would use looking at their situation from the outside. For example, you might identify male college students as the people who need to be served, and from your perspective, the problem is that they aren’t coming to church. But from their perspective, the problem might be that they have no transportation to get to church. The problem you need to capture is the one from their perspective.
The very first thing you need to do is to recognize that you have made a number of assumptions to reach the conclusion that this group of people has this particular problem. For example, assumptions could include that college men want to go to church, that they aren’t currently going to church, and that they don’t have their own transportation. Once you have a good list of assumptions, you need to decide which is the riskiest assumption. Which one, has a decent chance of being wrong, and if it’s wrong then your whole opportunity will be redefined? For example, from the above list, I might identify the assumption that college men want to go to church is the most risky assumption.
Before you even start to consider solutions to the problem, you need to validate your highest risk assumption. You need to develop a test and determine what criteria you will set for whether your test validates the assumption or invalidates it. For example, you might decide that you’re going to go on campus and talk to 50 young men to see if they want to go to church and if even 5 of them do, you might determine that your assumption is valid. (While you’re talking to them, you might as well go ahead and ask any that do want to go to church whether they are regularly attending a church service and if not, why not. This could save you some time and trouble later.) You may find that you were exactly right, but more likely you’ll learn that you need to redefine the definition of the “customer” (maybe it’s college-aged Christians) or that you need to redefine the problem statement (maybe campus commitments conflict with church service times). With this new hypothesis, it’s time to test again, observe again, and continue to refine until you understand the problem well.
Once you understand the problem, you can start to consider potential solutions. Of course, throughout this entire process, the most important test is alignment with God’s revealed will. Prayer and time in the Word are integral to all decision making. As Psalm 119:105 says “Your word is a lamp to my feet and a light to my path.” Will solving the problem that you’ve identified honor God? Is the solution that you’ve envisioned one that would be pleasing to Him?
Testing potential solutions in Lean fashion will involve multiple iterations with increasing levels of confirmation. People may say that the solution will meet their needs, but are they willing to sign up (e.g. give you their e-mail address or phone number to be notified when you implement)? Do they really show up when you try a small scale version of the solution? A video at https://www.youtube.com/watch?v=HhoducyStMw explains the complete process.
Titus 3:14 tells us “And let our people also learn to maintain good works, to meet urgent needs, that they may not be unfruitful.” It is my hope and prayer that these articles will help you be fruitful to the glory of God.