VALIDATION, Calibration, Scale!

Series: What start-ups critically need - that mature companies don't.

In a prior post, Start-ups Need Customer Development we have mentioned Steve Blank, who is known for creating some of the most useful start-up definitions:

“A startup is a temporary organization designed to search for a repeatable and scalable business model.” - Steve Blank

Steve Blank is an extremely important entrepreneurial speaker and educator (and successful entrepreneur) with many classes video taped at Stanford and other universities and global enterprises. He is also the mentor of Eric Ries who authored “The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses”.

In a prior post we have stated that the purpose of a start-up is to make money - ( VW Post: Start-ups Need a Business Model ) But how do you make money when all you have is a business “thesis” for making money? If you do have decent income, do you have an actual business “model” or “formula” for making money - with proven model assumptions such as customer acquistion cost or the incremental revenue from selling customers a product or service for which you receive income? Can you replicate your marketing pitch and your sales pitch to drive a revenue transaction - in a repeatable and predictable manner? Without a business “formula” how can you grow? You can grow by validating the assumptions of your business model / formula.