Hi there -
Here is this week’s “1 principle, 2 strategies, and 3 actionable tactics” for running lean…
1 Universal Principle
“Start with Founder/Model Fit.”
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An idea that works with one founder is not automatically guaranteed to work with another.
Before chasing after product/market fit, start by designing your business model for founder/model fit.
2 Underlying Strategies at Play
I. Startups aren’t one-track, zero-sum games.
There are many more ways to succeed as a founder than moving to Silicon Valley or building a unicorn. Each of us has a unique combination of goals, ambitions, and dreams. Then, why boil it down to a one-track startup journey? Succeeding as a founder is not a zero-sum game but an infinite-sum game.
II. Begin with an end in mind.
Too many founders get hit with an idea and then ask how big it can get. This is backward. Instead, start by asking how big of an idea you want, select criteria that fit you, and then find an idea that fits.
3 Actionable Tactics
I. Founder-Goal Fit - How Big?
As ideas can easily consume years of your life, I recommend first ballparking your ambition, i.e. how big of an idea you want to create (aka viability).
Where people get stuck here is trying to estimate the maximum upside potential of an idea which is often too far into the future and hard/impossible to estimate. Instead, think Minimum Success Criteria (MSC):
What is the smallest outcome that would deem your project a success 3 years from now?
Don’t overthink this. There are only 4 types of games when we model goals as Fermi values (powers of ten).
Pick one:
Level 1: $100k Annual Recurring Revenue
Level 2: $1m Annual Recurring Revenue
Level 3: $10m Annual Recurring Revenue
Level 4: $100m Annual Recurring Revenue
There is no right or wrong game. But you have to pick one game to play it well because each game requires different rules, tactics, and strategies to win.
Ensure that your founding team also signed up to play the same game. This simple step will not only drive better clarity and focus but also avoid mis-expectations and painful regrets later.
II. Goal-Model Fit - Why this Idea?
With a ballpark goal defined, now search for ideas that could possibly hit your goal. Here too, elaborate forecasting is a waste. All you need is a quick 5-minute back-of-the-envelope estimation.
See: The 5-Minute Test to Rapidly Evaluate Your Startup's Potential
Quickly discard ideas that can’t hit your goal. Most won’t, and that’s okay.
Good ideas are rare and hard to find, but working on a bad idea that you could have caught early is far worse.
III. Model-Founder Fit - Why You?
Finally, come back full circle to stress-test your idea against other non-negotiable x-factors that make this idea fit you.
These could be
- things you value like sustainability or diversity,
- things you’re passionate about, like cooking or art,
- things you’re exceptional at (your super-power).
All startups are rollercoasters, and it’s hard to ride the ups and downs without passion and grit around these x-factors.
That's all for today. See you next week.
Ash
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P.S.
May the fourth be with you :)
