Another great question from our UK Theatre /SoLT webinars.
Given the push on cashflow during the lockdown period, it’s likely we’re not going to have the cash pile to burn like a well-funded start-up. I’m concerned that there might be an underlying assumption of having cash. Does this work if you don’t have the cash to burn?
It may seem counter-intuitive to be thinking like a start-up, particularly if your organisation or work has bee around for a while, but it is very unlikely we’ll be going back to where we were before the lock down began. We think a start-up approach could be really helpful for re-thinking business models and it doesn’t need huge resources.
Susan
Whilst much of the publicity around start-ups focuses both on the well-funded and on those that have actually been ‘up’ for a little while, many start-ups actually get going on shoestring and there is a substantial and growing body of research into how they do it. Here are three approaches that offer insights for where arts and culture organisations may find themselves this year.
Lean Start-Up
Applying the ideas behind Lean (creating greater value using fewer resources) to start ups has become a major area of research, developed by Eric Ries following the failure of two of his own start-ups. Three aspects are particularly helpful.
- Validated learning – start-ups exist to create viable business models. This is done through running experiments that allow an organisation to test each key element of its proposed model.
- Start-ups need different metrics that help you learn.
- Build-measure-learn. Start-ups exist to turn ideas into products/services, measure how customers respond and then learn whether to change course or keep going. Minimum viable products (MVPs) are a key element in this process.
Through an emphasis on building fast feedback loops, that is mechanisms for getting information back on your performance or activity you are delivering, so you can learn quickly and reduce uncertainty.
Lean Canvas
The Lean Canvas was built by Ash Maurya, customising the Business Model Canvas (BMC) that we have discussed earlier. Like the BMC it allows you explore different business models quickly on a one piece of paper.
How to use the Lean Canvas
- Create a canvas as illustrated below. You could draw on up ahead of time on a virtual whiteboard before the rest of your team joins in.
- Fill the boxes up quickly in the order indicated starting with customers and the problems you are trying to solve for them.
- Maurya recommends that you take no more than 20 minutes for the first go – this is a sketch not a detailed analysis.
- Take a look at what you have created. In particular, think about the assumptions you have made in filling in the first three boxes. What sort of assumptions are they: gut instinct, based on anecdote or grounded in evidence? How does that change your views?
- Look at your model and think about three questions.
- Desirability – will customers want it?
- Feasibility – can we do it?
- Viability – how can we generate a surplus?
- Iterate until you have a model that you think can work!
The Frugal Innovator
In his 2014 short book, Charles Leadbeater, offers some advice on creating change on a shoestring budget.
‘…frugal innovation provides us with both a purpose and ethic to guide innovation and a method to make it happen.’ (Leadbeater, 2014)
He offers the following advice
- Ask for what is impossible and start by asking the stupid questions
- Thrive on crisis, work in the margins, many of the examples he cites are those of people innovating in the face of an existential crisis
- Welcome constraints as a spur to radical innovation
- Learn to be lean; eliminate waste and work without dedicated, fixed machines and equipment
- Simplify think about the simplest most elegant and effective way to deliver value for your customers
- To create value, share it
- Waste is fuel – clean is central to the design of your solution not a nice-to-have
- Blend do not invent – combine existing, proven and cheap technologies/approaches don’t invent from scratch
- Think like a movement
- Innovate new business models
There is much more information on these approaches online. Good luck with your exploring and learning.
Dawn
Two things come to mind for me when thinking about adopting a start-up mindset:
- The scale of the change/development
- Feedback
Scale
I think there’s a danger when we think of ‘start-up,’ or even reshaping existing models that we leap up the ladder of assumption to something that has to be big and will take lots of investment. Over the last ten years I have been developing a Small Change® approach that turns conventional thinking about change on its head. Instead of starting with the big vision it says start where you can, think about what you can do for no or low cost. I’m not suggesting you shouldn’t have the big vision, but that sometimes if that is where you start it can feel overwhelming and impossible.
Small Change® has a number of guiding principles (adapted from Hamdi, 2004):
- Start where you can
- Recognise your own ignorance
- Never say ‘can’t’!
- Let your imagination wander, reason later
- Be reflective
- Embrace serendipity
- Challenge consensus
- Look for multipliers
- Feel good about yourself
The smallest change can have a big impact (I’ll post more on this in the coming weeks). What is the smallest change you can make at low or no cost that will start to have a ripple effect?
Feedback
As the lean start-up canvas suggests, if you’re going to make changes you need to have mechanisms for really knowing what your customers or beneficiaries are looking for. Feedback is central to individual, group and organisational learning. It also tends to be something we are not great at. A good starting point is to assess your feedback culture:
- Do you have a growth and development approach?
- Do you provide feedback training?
- Are you modelling good feedback behaviour?
- Have you got a feedback-safe environment?
- Are expectations about feedback (internal and external) clear?
- Is feedback a routine part of what you do?
- Do you have a range of feedback channels for your team, customers/beneficiaries, stakeholders etc?
- Do you manage a balance between positive and corrective feedback?
- Does everyone know when a decision is made based on useful feedback?
- Is your approach to feedback intermittent or continuous?
Your first feedback challenge is to be able to answer these questions openly and honestly. Think about where improvements can be made and how you can build feedback into your lean start-up process.
Feedback is a gift. Ideas are the currency of our next success. Let people see you value both feedback and ideas. (Jim Trinka and Les Wallace)
Resources
Related posts
Give people a chance to fail safely
Putting the Double Diamond into Practice
Realigning assumptions: Stepping back and re-assessing
References
HAMDI, N. 2004. Small Change: About the art of practice and the limits of planning in cities, London, Earthscan Ltd.
LEADBETTER, C., 2014. The Frugal Innovator. Basingstoke, Hampshire: Palgrave Macmillian.
RIES, E., 2011. The Lean Startup: How Constant Innovation Creates Radically Successful Businesses. London: Portfolio Penguin.