Fail Fast or Win Big: The Start-Up Plan for Starting Now
Bernhard Schroeder
AMACOM (2015)
How and why the LeanModel Framework can be “a rocket ship for entrepreneurs”
As I began to read this book, I was again reminded of Jack Welch’s response when he was chairman and CEO of GE and asked at an annual meeting why he held small companies in such high regard. His reasons:
“For one, they communicate better. Without the din and prattle of bureaucracy, people listen as well as talk; and since there are fewer of them they generally know and understand each other. Second, small companies move faster. They know the penalties for hesitation in the marketplace. Third, in small companies, with fewer layers and less camouflage, the leaders show up very clearly on the screen. Their performance and its impact are clear to everyone. And, finally, smaller companies waste less. They spend less time in endless reviews and approvals and politics and paper drills. They have fewer people; therefore they can only do the important things. Their people are free to direct their energy and attention toward the marketplace rather than fighting bureaucracy.”
The title of Bernhard Schroder’s book refers to the process completed within what he characterizes as the LeanModel Framework. As he explains, “”instead of spending months writing a business plan and then looking for investors, who may not give you any money anyway, adopt the Lean Model Framework. The Lean Model Framework is made up of four integrated components: Lean Resources, Business Model, Rapid Prototyping, and Customer Truth.”
Schroeder devised this Framework primarily for start-up companies. Moreover, with only minor modification, the Framework can also be of substantial assistance to those within a well-established organization who seek funding for start-up projects based on a promising new product or service. Here are the Framework’s components:
o Lean Resources: “Empower a mentality that believes less is more; look to get your company [or project] started in the leanest way possible by leveraging everything that you can.”
o Business Model: “Take the time to really understand your marketplace, current trends, and your target market segment, then craft a business model that not only makes sense but it makes money.”
o Rapid Prototyping: “If you believe in using lean resources to move fast, then with the same mentality, create a minimum viable product or service that you can test with the marketplace as rapidly as possible.”
o Customer Truth: “Although selecting the right target customer segment is critical, listening to and gathering feedback from your potential customers is crucial. Feedback from customers is what will give you the insight needed to iterate, pivot, or abandon your idea.”
He thoroughly explains how to develop each of these separate but interdependent components when preparing to launch a new company or project. The success of those preparations will depend almost entirely on two factors: viability of what is proposed, and, quality and speed of introduction. To repeat, it is imperative to determine ASAP whether or not to iterate, pivot, or abandon the given idea.
I commend Bernhard Schroeder on his skillful use of several reader-friendly devices within his narrative that include what I call business nuggets, “Entrepreneur Insights,” as well as “Key Takeaways” from each chapter. These devices will facilitate, indeed expedite frequent review of key material later. In the final chapter, he explains the “what” and “how” of becoming an entrepreneur, correctly noting that “founders create start-ups, teams build companies.” Obviously, effective leadership and teamwork are essential to the success of either a start-up company or a start-up project. Here in a single volume is almost everything anyone needs to know about how to achieve that success.