A big proponent of entrepreneurs getting as much advice as possible, Luni comes to Rank & File as an experienced mentor offering guidance on selling your product, adjusting your business plan and not giving up. He is a 20-plus-year serial entrepreneur who has founded or co-founded five successful companies. After several years launching and scaling tech companies in his hometown of Seattle, Luni found himself searching for ways to give back.
He is now an Entrepreneur in Residence and Entrepreneurship Instructor at Pinchot University, the first business school to offer an MBA in Sustainability; the author of “The Next Step” book series, on guiding you from idea to startup; and the Founder and Managing Director of Fledge, the conscious company accelerator.
Fledge is an intense 10-week program that takes place inside Impact Hub Seattle, one of the largest community and co-working spaces in the world. Using an MBA-level curriculum, Fledge covers the full set of skills needed to become a successful entrepreneur. Participants receive training in areas including creating a business plan, marketing, sales, financial planning and communication skills.
Before completion, Fledglings have not one but three on-stage opportunities to showcase themselves and their business in front of the community, fellow Fledge members and impact investors. Beyond the regularly scheduled meetings and goals of the Fledge program, participants are also required to set their own unique goals for what they would like to accomplish. The more you put into Fledge, the more you get out of it.
Beyond the thoroughness of the approach Luni takes with Fledge, what makes his program unique is the Fledge network of mentors. Fledge mentors come in all shapes and sizes, and include anyone who would like to share their experience and advice with the Fledglings. Mentoring comes in many forms including group sessions and one-on-one meetings. Fledglings can be expected to achieve a mental state known as “mentor whiplash,” where the sheer amount of advice becomes almost overwhelming.
We’ve taken Luni’s “the more advice the better” approach to heart with this article. In addition to Luni’s expert advice, you’ll also find tips from a few successful former Fledglings.
Luni, a “wallflower who becomes a roadblock to dumb thinking,” spoke openly with Rank & File about some of the common blind spots he has found in aspiring startups during his accelerator program. We’ll cover the nuts and bolts of early-stage sales, talk about re-planning for plan B, and discuss being persistent and patient.
How does a social enterprise startup balance the need for a well-formulated and sustainable business model that tackles complex social problems, with getting to market as quickly as possible to prove that a customer will pay for their solution?
“Most first time entrepreneurs think it sounds a little crazy when we teach them the real startup model… But there is always some way to approach a customer and ask them to buy something even if you don’t have it.” To gain what he calls “traction” with your startup, you have to first gain one customer: “Any customer paying anything, even nothing.”
One of the most common problems Luni runs across with his Fledglings is a lack of experience in sales. The real way to prove a customer will pay for your product is to ask them, and here is the key: ask them even before you have a fully-developed, hold-it-in-your-hand product. “Just to be clear…you don’t actually have to have the product, you only have to ask for the money,” Luni says.
As intimidating as it might be to reach out and ask a customer to purchase a product, especially a product that might exist purely as an idea, it is the only way to learn if you actually have achieved your minimum viable product.
Of course it is crucial to have a well-formulated business plan, but without a product that people will buy, your business plan is next to useless. Asking real customers to purchase your product will help you get the information you need to adjust your plan based on real market desires in order to find your product-market fit.
What are some practical tips for companies who are in the process of finding their product-market fit early on?
“Few people give you any true critical feedback until you ask them to buy.”
Luni maintains that pre-selling is the primary way to find your product-market fit. Of course, pre-selling isn’t always, or almost ever, going to be smooth sailing. Luni spoke with us about the fact that he dedicates an entire section of his first book in the “The Next Step” series to “re-planning for plan B.”
“There is a great lesson in entrepreneurship which shows that no company that has ever succeeded has done so on plan A.” He continues to give several well-known companies as examples to illustrate his point: “Facebook was not a social media website with a news stream and friends. Plan C… is what we see today.” The PayPal that we all know today “is the seventh version or plan G.”
Luni sees the dreamer in us all, the people who want to change the world, and he offers words of caution: “Too many entrepreneurs think they have the best idea in the world; they’re certain it’s gonna work, and they can’t understand why investors aren’t throwing money at them. Yet when they actually go put it into the market, it fails. It may not completely fail but it will not work as expected.”
The key, according to Luni, is testing with the expectation that your plan or your product is not going to be successful. “Plan for things to fail and you’ll be much happier in the end.”
Finding the perfect product-market fit after several iterations takes time. What should entrepreneurs keep in mind as they head down this path?