How Critical Assumptions Can Make or Break Your Business
“Am I working on the things that matter most?”
“How can I get more traction?”
“Do I have enough cash to keep going?”
These are just a few of the questions that keep entrepreneurs up at night. Unfortunately I’m not here to give you a magic way to erase all those worries. But I can give you one piece of advice that’ll make organizing and prioritizing your questions a little easier: work on your critical assumptions.
Find the guesses that absolutely have to be true for your business to succeed.
Every entrepreneur makes guesses. What they’re doing hasn’t been done before. Ask yourself, “what do I think is true about my customer, their problems, my product, and my team?” Write down things like “I believe my customer is ____” or “I think _____ is a problem that _____ is trying to solve.” Make a long list. Then rank each guess based on how detrimental it would be if you’re wrong.
Take the top of your first list and rank those assumptions by how much or how little you know about each.
The most important word in that sentence is “know”. You need concrete evidence to know something is true. Evidence comes in all forms – from unbiased consumer feedback and third party research to prototypes and sales. But don’t be fooled into thinking you understand a customer’s problem just because you’ve experienced it yourself; in fact, you might be an outlier or you might have misunderstood the problem. The key to this step is being honest with yourself about how much you actually know versus how much you’re assuming.
Work on validating the guesses that are both highly unknown and really important.
If, for example, you think young mothers will love your new diaper bag, your most important/least known assumption might be that moms don’t have enough space is their bags. The best way to confirm your hunch is to spend a lot of time talking to moms about the problems and pains they face when they’re in transit. All of your other guesses can wait – if you’re wrong about the problem you’re solving, perfecting other aspects of your model could turn out to be a huge waste of time.
The cycle doesn’t stop. Once you’ve learned enough about one critical assumption, move on to the next. By following this simple pattern, you’ll not only prioritize your time wisely, but you’ll also be learning and adjusting your business model. That’s more than a great way to get traction – it’ll also save you time and money and help you build things customers actually want.
Want to know more about the MAGNET Incubation Center? Visit magnetincubationcenter.org to learn about membership, meet the team, and more.
One remarkable thing about the list is that it rarely changes. The order may change but the top cited standards typically don’t change. Top 10 Sited Safety and Health Violations: 501 - Fall Protection 1200 - Hazard Communication 451 - Scaffolding 134 - Respiratory Protection 147 - Lockout/Tagout 178 - Powered Industrial Trucks 1053 - Ladders 305 - Electrical, Wiring Methods 212 - Machine Guarding 303 - Electrical, General Requirements Three of the 10 sited standards are directed at the construction standard (1926) while other fall within the general industry (1910). It should be noted however that the general industry standard also has fall protection guidelines. Year after year, inspectors see the same on-the-job hazards, any one of which could result in a fatality or severe injury. More than 4,500 workers are killed on the job every year, and approximately 3 million are injured. By understanding these regulations you can improve your safety program and prevent injuries. Give me a call if you have any compliance doubts, or want to review OHSA regulations. Gwido Dlugopolsky at 216-391-7766 or firstname.lastname@example.org
Why does it take a NASCAR pit crew only 15 seconds to change four car tires when it takes people like you and me minutes? The answer is simple SMED. Single Minute Exchange of Dies, or SMED, is a process for reducing the time it takes to do equipment changeovers. Using the principles of SMED you should be able to perform any changeover in your facility in under 10 minutes! The SMED process is simple – convert as many changeover steps as possible to “external”, meaning they are done while your equipment is still RUNNING, while simplifying and streamlining the remaining steps. SMED is broken down into the following 3 Steps: Separate Convert Streamline We found this article to be very helping in explaining the SMED process in more detail: LEAN PRODUCTION - SMED A good first step to achieve this level of SMED efficiency would be to run a kaizen event at your facility to standardize (5S) your tools and supplies. Doing this alone will help you achieve 40% to 50% greater efficiency. Once the “low hanging fruit” is gone, you can still reduce setup times another 20% by practicing more advanced SMED principles.
The secret to closing any sale is to reduce uncertainty in the buyer and replace it with confidence in YOU, your PRODUCT/SERVICE, and your COMPANY. Step 1 – Confidence in YOU Someone buying from you wants to be able to fundamentally connect with you on a human level and feel confident that you’re an expert in what you’re selling If you’re selling paperclips, be an expert in paperclips If you’re selling design and engineering related services, be an expert in design and engineering related services Focus on addressing the problem, not the solution….MEANING you already know you have the solution, connect with the buyer by being an expert with the problem he/she is facing. Prove that you know the problem and all aspects of the problem like the back of your hand. Step 2- Confidence in the PRODUCT/SERVICE you are selling Someone buying from you needs to trust the product/service you are selling will solve their problem. It’s your responsibility to deliver a solution and the benefits associated with it. Basically you need to “Hit a Homerun” communicating this message. Tip – Use Success Stories: Share with the potential buyer examples of your product/service solving problems and delivering value for