Hi there -
Here is this week’s “1 principle, 2 strategies, and 3 actionable tactics” for running lean…
1 Universal Principle
“With the right mindsets, the early stage journey can be systematic and predictable.”
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Treating Product/Market Fit as the first significant milestone of a startup makes sense for VCs. But it does not make much sense for startup founders because it’s too far into the future to be actionable.
This is why the early-stage journey is often depicted as a wavy squiggle of aimless wandering and is commonly viewed as high-risk or unstructured.
But it doesn’t have to be this way.
With the right mindsets and thinking processes, it is possible to turn this wavy squiggle into a more systematic and structured process.
In today’s issue, I’m going to show you how — using my 3 Rings Framework.
2 Underlying Strategies at Play
I. Right Action, Right Time
At any given time, only a few key actions stand to drive the biggest impact in your startup.
Your job is to focus on those and ignore the rest.
If it helps, consider this as the Pareto 80/20 principle or Theory of Constraints applied to startups.
All roads lead to Rome - FOCUS.
But how do you focus on the right action at the right time?
👇
II. Play the Hockey Stick
Too many entrepreneurs are in a rush to get to the right side of the hockey stick curve — trying one growth hack after another in search of the mythical unlock.
However, hockey stick unlocks typically don’t come from random tactics but from learned or earned insights.
The key to practicing “right action, right time” is playing the hockey stick instead of letting the hockey stick play you.
In other words, break your hockey stick journey into stages and think of these stages as levels in a video game. You can’t jump from level 1 to level 9 without going through all the other levels.
So, focus on completing the level you’re on versus fantasizing about advanced levels.
In the journey to Product/Market Fit, there are three primary levels:
The 3 Rings Framework visualizes each level as a segment of the hockey-stick curve rolled up into a ring.
You complete each level by closing these rings.
3 Actionable Tactics
I. Closing the Founder Ring
The first ring is the Founder Ring:
This is where you, the founder, design your business model and test that it fits your goals (minimum success criteria) before investing additional time, money, and effort.
You do this by stress-testing your business model against seven factors:
- Mission
- Clarity
- Viability
- Desirability
- Feasibility
- Defensibility
- Timing
Closing this ring is the single best investment you can make to avoid needless heartache later.
If you’d like to stress-test your current (or next) idea, I run a 30-day Business Model Design Challenge. It's all about closing the Founder Ring. Check it out here.
II. Closing the Customer Ring
The second ring is the Customer Ring:
This is where you validate a small-scale version of your business model by prioritizing customers over users.
The difference: Customers pay you, users don’t.
While the objective of this level is to end up with happy customers using your product, starting with a product (or MVP) isn’t often the best path because:
- customers don’t care about your solution, but their problems,
- you should ideally test your solution before building it and
- you don’t need a working product to land paying customers.
You do this by prioritizing problems before solutions, making building what customers want easier.
III. Closing the Market Ring
The third ring is the Market Ring:
This is the time for systematic growth hacking. Now that you have a working business model, you search for scalable growth rockets to accelerate your business model to escape velocity (product/market fit).
The process for doing this requires
- shortlisting possible growth rockets,
- testing them against your product,
- doubling down on one.
There you have it: The 3 Rings Framework.
That's all for today. See you next week.
Ash
Author of Running Lean and creator of Lean Canvas
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P.S.
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