There are a lot of people out there who want to start a business. There are just as many who worry about how their dream will be financed. The story of Chris Halim and Raena Lim gives hope and demonstrates that not every business has to be—or even should be—lavishly funded.
There’s something to be said for the lean startup.
Halim and Lim decided to start a clothing rental service in Singapore. They faced the temptation to “build the perfect product before you launch anything,” as Halim put it to CNBC. However, they opted for a different approach and it was to do something simple, with a narrow scope and hit the market.
That was 5 years ago. Today, they have 200,000 customers in Singapore and Indonesia, and they have $30 million now coming in from investors to undertake expansion. Once lean, Halim and Lim’s business is now feasting.
Ask the right question first
The first question you need to answer for yourself is:
Should this product exist?
(Not whether it can be made, but whether it fits a real need in the marketplace.)
Or put differently:
Is it the kind of product or service you would want to buy if you were a customer? As a business owner, it should be the kind of product or service you can use as the foundation for other products or services.
Define your MVP
No, we’re not talking about your Most Valuable Player, but rather your Minimum Viable Product. Once your MVP is in place, get it out on the market.
Now you can monitor customer feedback. Maybe the additions to the product you envisioned (the ones that might have held you back from introducing it) aren’t ones that would be attractive to the market. Perhaps your new customer base has different ideas for what the next steps should be.
By hitting the market quickly and not worrying about what your theory of the “perfect product” was, you gave yourself a chance to see some early sales and then get your audience’s definition of what “perfect” looks like.
Know your UVP
The next acronym to get familiar with stands for Unique Value Proposition (UVP). Your UVP defines where you fit in the marketplace. It’s what makes your product or service distinct from everything else.
That’s simple enough to understand, but it’s important to really think that through on a deeper value. Think about what specific pain point in the life of your prospective customer your product is looking to heal. Consider alternatives that are on the market and ask why they either fail to heal the pain point or come at it from a different angle than yours. As you do that, you’ll be able to clearly articulate not just why your product is good, but why it truly has unique value.
Your unique advantage
The unique advantage goes beyond the specific product and into the specific nature of your business setup and of you.
What are you bringing to the table that no competitor—no matter how large—can match?
Perhaps you have a specialized skill in your field that a large conglomerate can’t easily replicate. If you’re in a smaller community, maybe you have a network of relationships that no rival will duplicate overnight.
Are you using technology or processes that can be patented?
That’s surefire protection.
Every startup would like to have a lot of money to launch with, but that’s rarely the case. The lean startup example of Chris Halim and Raena Lim demonstrates that, while helpful, it isn’t essential.