If you decide to start your own business, one of the things you may do is get a bank loan or go after one of the many grant packages that are available. In either case you’ll need a business plan. You’ll need to explain your market research which leads you to believe you have a viable business. You’ll then need to do projections based on that research. Doing the projections, you’ll find yourself walking the high wire between:

• trying to be realistic/conservative but in reality appearing downbeat about your prospects, thereby underselling the business and not getting your loan/grant; and
• being upbeat but then running the risk of having what bankers like to call ‘telephone numbers’ in your proposal – and being turned down for that reason.

It’s a tricky and, quite frankly, a tedious business. But it’s the way the game is played. If you want to be in the club (of start-up entrepreneurs) then you have to play the game.

Now, with (almost no) due respect to bankers, they’re a species I’ve tried to steer clear of for most of my entrepreneurial life. And as for grants, I’ve found personally, that the time I spent chasing the grant would have been far better spent chasing business. (But please understand that I’m not shooting down grants. It’s just that I haven’t found them to be particularly useful myself. And as for bankers . . .)

But what I discovered is that there’s another way to start a business and I stumbled on it quite by accident. Here’s what happened to me.

My original start your own business idea was simple. There were plenty of people out in the world selling project management as rocket science. I believed there was a market for project management as common sense. So in 1992, I set up my company – ETP – a project management training and consulting company. I put together a five-day project management course based around my common sense method for project management and start to hawk my wares.

A friend of mine, who was running a software company in the United States, gave me my first job. I flew to the States over the weekend and on Monday I taught the first day of the five-day course. It went down well. As we ended that day and were all saying our ‘see you tomorrows’, everyone seemed dead happy. Everyone except me that was.

The trouble was that I had taught all my material. Yep, all of it. The slides and stuff that I had thought would see me through five days had lasted one. I was through them all. Every single one.

What the hell was I to do?

That night I could only think of one thing. Since I had no more material, my only other option was to see if any of the people in the class had any. And of course, I realized they did – they had their projects. So I decided that that’s what we would spend Tuesday doing – applying what they had learned from my course to their projects. That would take care of Tuesday. If I could get through Tuesday, then I would worry about Wednesday, Thursday and Friday.

But happily, the issues we uncovered on Tuesday – applying the method to their projects – kept us going right to the end of the week. We were even a bit stuck for time at the end. The course was a big success, there was some money in the bank, a satisfied international customer and some great endorsements. We were up and running.

Back at base, I learned the lessons. I rapidly slimmed the five-day course down to three days. And the idea of applying my method to their projects became a central idea that is still there today. Indeed, it has become the backbone of all the training we do. People love it. It solves real problems. They do ‘real work’ on the course as well as learning a vital skill – project management.

What did I learn?

I learnt two vital lessons.

The first one was that once you set up your business, there’s only one piece of market research that – IMHO – is of any value. You can do all the surveys, focus groups, analysis of data and trends, quantification of the size of the market that you like, but – in the end – only one thing matters. Is there somebody prepared to pay money for your product? If there is then you’re in business.

And the second thing I learned is that what you’ve put out there initially may not be quite right. In fact it may a long way off being quite right. But once it’s out there, you can start to iterate it and make it better – bringing it closer to the thing that solves the customer’s problem.

So these days, when I have a new idea for a product or service – essentially starting a new mini-business – I do the following:

• Put together what I think the product or service should be.
• Try and sell it.

I have a folder on my computer called ‘Stuff That Never Worked’. It’s a big folder. It contains a whole bunch of things that I tried and that failed. I came up with what I thought was a great idea, made something I could sell, tried to sell it and nobody bought.

That’s okay, though. I had put minimal effort, time and money into it. I could move on swiftly to the next great thing.

And you know what the nicest thing of all is? It turns out that this idea of make something and iterate it, that I accidentally stumbled on and figured out for myself, has actually become respectable. So respectable that even the Harvard Business Review⁴¹ expounds on it – and you don’t get much more respectable than that.

The process is known as ‘lean start-up’ and was developed initially by Eric Ries. Google the term ‘lean start-up’ and you can find out all about it. You could also buy – and if you’re thinking of starting a business, you absolutely should buy – Eric Ries’s best-selling book, The Lean Start-up: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses.⁴²

Here you’ll learn about things like:

• Minimal viable product. (Do I need to spell it out?)
• Continuous deployment – what I called ‘finding customers’.
• Split testing – offering customers two different versions of the same product to see which sells better.
• Actionable metrics – sensible measures that can guide you to where you should go next with your product development.

So if you’ve got a great idea and you’re thinking of starting a business, yeah sure, you could go do the round of business plans, banks and grants.

Or you could just make something and see if people will buy it.

I know which I think makes more sense.