Ok, you have a passion. Then what?
Blog by Robi Janssen
In modern industries, compared to 20 years ago, the development of new ideas and start-ups is accelerating as fast as ever. As a starting entrepreneur, you have to be able to anticipate and adapt to the market in order to become successful. In order to stay ahead of the competition, it is necessary to apply a different way of product development; focus on your customer instead of your product. This way of product development is called the Lean Method. With this method, you establish a business idea by making use of validated learning. You will have conversations with your customers in order to find out what problems they encounter and you adjust your products according to their customer needs.
The past few months I have applied the Lean method to my own business idea: I validated my idea for ‘Esportslokaal’. Entrepreneurship always begins with a passion. Something you love and something you would like to earn your money with when you’re older. Because let’s be honest: you don’t want to do something you don’t like for the rest of your (working) life.
My passion is esports: the competitive playing of online videogames. My business idea was to organize esports tournaments at local football clubs around Venlo. This is my response to the declining membership numbers, resulting in the financial problems that the local football associations are experiencing. Furthermore, I also discovered a big desire for esports events in the region.
I thought I’d hit the jackpot with this idea, so I enthusiastically began working on my Lean Canvas model on the basis of my own assumptions. But after completing one building block, the first questions arose: do the problems that I want to solve with my idea actually exist in this region? What is my target audience that would want to participate in this competition? What is my Unique Selling Point? How am I going to reach my target audience? How am I going to make profit from this idea?
All these questions are vital when starting a business. Of course I can start a nice and fun esports competition with ‘Esportslokaal’, but if I can’t answer these basic business questions, ‘Esportslokaal’ is doomed to fail as a viable company in the future
By executing problem and solution interviews, I talked to 24 different potential customers. Among them were two esports experts and one expert in local football clubs. They helped me get the answers to the questions I’ve mentioned above. I did this to gather as much information as possible to help me create and develop my business in a validated way.
All the information I gathered during these interviews was essential to ‘Esportslokaal’. During the interviews, it turned out that the problems I wanted to solve were actually present in the region, but I was wrong about who my target audience actually was. I thought Esportslokaal would be perfect for 20 to 34-year olds, but it turned out that 11 to 20 year olds were way more interested in esports tournaments. The interviews also made clear that my target group prefers long-term relationships with companies and products, rather than short and fleeting ones. This fact ensured me that a certain revenue model needed to be chosen that aligned with this need. So, I decided on a subscription revenue model. Moreover, simple things such as what social media platforms I should use to reach the target audience appeared to be different than expected. Not Facebook, but Instagram and Snapchat seemed to be the platforms on which my target audience is very active.
As you can probably imagine, I had to adjust numerous assumptions by virtue of the information I received from my target audience. This doesn’t mean that my business idea was bad, it just means that my assumptions about my customers’ needs were wrong. My validation process turned out to be an opportunity to transform my idea into the perfect product for my customer. As a result, I will not only host online competitions at local football clubs, but I will organize live local esports events in the region as well.
Using the Lean method as a way of validating my business idea is perfectly consistent with the business programs they offer at Mercator Launch, where I work as a graduate intern. Mercator Launch recommends starting entrepreneurs, like me, to start conversations with potential customers in order to develop an added-value product or service.
Mercator Launch also recommends using certain models that I used myself throughout my research. The Value Proposition Canvas is a very useful tool to study your customer’s problem and develop your Unique Selling Points. Another great model is the Business Model Canvas, which I will start using myself in order to work out my business idea in further detail. For me, being able to do my internship here, is a business match made in heaven!