New ventures are exciting. It's fun to imagine yourself rich, successful, and famous (if that's your thing). How you'll help others and make your family proud. This excitement can pull you forward for years, even when you intuitively realize that the path you're on may not lead to your desired success.

Know when to change course. Switching course can mean pivoting or changing direction.

In this not-so-short blog, I'll describe the journey of building your dream. And how the journey might look when you think you're building your dream, but fall short of that vision. Both can feel similar in the beginning, but there are subtle differences.

Let’s dive in.

How an exciting journey to a dead end looks and feels.

You want to help many people. You're business-minded, creative, and ambitious. You jump into entrepreneurship. You're excited, free, and in control.

I'll use tech as an example because that's what I know best, but this applies to any entrepreneurial endeavor.

So you start learning the basics of your field, say coding/software development. You read books, take courses, and may even join a bootcamp. You start practicing, and the journey begins. Once you reach a certain level of skill (which can take months, usually 12-24), you gain the confidence to speak with others in the field and find common ground. You might attract a co-founder this way with time. You and this person embark on a journey (Tip: the idea you start with is rarely the idea you end with).

Amateur mistake #1: You spend months building a product before speaking to customers.

Building something pulls you forward blindly. You make mistakes, avoid customers, and build with your co-founder or small team in the dark for months, usually 6-12 months.

You're excited when the product launches. We'll be billionaires! The market won't believe it. This excites you and the team. Launch.

….

Nothing happens.

Some people may sign up out of pity, only to never use the product or service again.

You and the team are confused, discouraged and in denial. They don't get what we've built yet. We need to market it better, we need to talk to more investors, someone will understand our vision.

This is a hopeless path, and your denial could last another 6 months. If you're lucky, while talking to consumers and investors (which you should have done from the start), someone who has been there before would pity you and give you an idea to pivot into that can create income.

Suppose you get this idea and pivot your business. Again, you've just pivoted into something limited by what you've already built. It may be a revenue-generating idea, but it's rarely new. Now you're playing catch-up, doing something others are doing but you can do better. (Tip #2: Don't be late.) Your chances of winning are slim, and you'll likely never catch up.

You're finally seeing revenue and feel successful. You can compete, but if you're not a first mover, you won't earn enough over time. You'll get by or work harder than ever to earn what a skilled trade could provide. You didn't go into business to stress out and make $100,000 or $200,000 a year. When you can make the same amount by becoming a great software developer, electrician, etc.

You become stuck. Either your firm continues this way for years until you realize there isn't enough growth to recruit a strong team and remove yourself from day-to-day operations due to competition. Or a catastrophic economic event forces you to admit that what you were building wasn't new and unique and wouldn't get you where you wanted to be.

This realization could take 6-10 years. No kidding.

The good news is, you’ve learned a lot along the way and this information can be used towards your next venture (if you have the energy).

Key Lesson: Don’t build something if you aren’t one of the first in the space building it just for the sake of building something.

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Let's discuss what it's like to build something that can make your dream come true.

Case 2: Building something the market loves is difficult but rewarding.

It starts with a problem that hasn't been adequately solved for a long time but is now solvable due to technology. Or a new problem due to a change in how things are done.

Let's examine each example.

Example #1: Mass communication. The problem is now solvable due to some technological breakthrough.

Twitter — One of the first web 2 companies that became successful with the rise of smart mobile computing.

People can share their real-time activities via mobile device with friends, family, and strangers. Web 2 and smartphones made it easy and fun.

Example #2: A new problem has emerged due to some change in the way things are conducted.

Zoom- A web-conferencing company that reached massive success due to the movement towards “work from home”, remote/hybrid work forces.

Online web conferencing allows for face-to-face communication.

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These two examples show how to build a unicorn-type company. It's a mix of solving the right problem at the right time, either through a technological breakthrough that opens up new opportunities or by fundamentally changing how people do things.

Let's find these opportunities.

Start by examining problems, such as how the world has changed and how we can help it adapt. It can also be both. Start team brainstorming. Research technologies, current world-trends, use common sense, and make a list. Then, choose the top 3 that you're most excited about and seem most workable based on your skillsets, values, and passion.

Once you have this list, create the simplest MVP you can and test it with customers. The prototype can be as simple as a picture or diagram of user flow and end-user value. No coding required. Market-test. Twitter's version 1 was simple. It was a web form that asked, "What are you doing?" Then publish it from your phone. A global status update, wherever you are. Currently, this company has a $50 billion market cap.

Here's their MVP screenshot.

Small things grow. Tiny. Simplify.

Remember Frequency and Value when brainstorming. Your product is high frequency (Twitter, Instagram, Snapchat, TikTok) or high value (Airbnb for renting travel accommodations), or both (Gmail).

Once you've identified product ideas that meet the above criteria, they're simple, have a high frequency of use, or provide deep value. You then bring it to market in the simplest, most cost-effective way. You can sell a half-working prototype with imagination and sales skills. You need just enough of a prototype to convey your vision to a user or customer.

With this, you can approach real people. This will do one of three things: give you a green light to continue on your vision as is, show you that there is no opportunity and people won't use it, or point you in a direction that is a blend of what you've come up with and what the customer / user really wants, and you update the prototype and go back to the maze. Repeat until you have enough yeses and conviction to build an MVP.

What Is That?

Berkus is a pre-revenue valuation method based exclusively on qualitative criteria, like Scorecard.

Few firms match their financial estimates, especially in the early stages, so valuation methodologies like the Berkus method are a good way to establish a valuation when the economic measures are not reliable.

How does it work?

This technique evaluates five key success factors.

• Fundamental principle

• Technology

• Execution

• Strategic alliances in its primary market

• Production, followed by sales

The Berkus technique values the business idea and four success factors. As seen in the matrix below, each of these dimensions poses a danger to the startup's success.

It assigns $0-$500,000 to each of these beginning regions. This approach enables a maximum $2.5M pre-money valuation.

This approach relies significantly on geography and uses the US as a baseline, as it differs in every country in Europe.

A set of standards for analyzing each dimension individually

Fundamental principle (or strength of the idea)

Ideas are worthless; execution matters. Most of us can relate to seeing a new business open in our area or a startup get funded and thinking, "I had this concept years ago!" Someone did it.

The concept remains. To assess the idea's viability, we must consider several criteria.

• The concept's exclusivity It is necessary to protect a product or service's concept using patents and copyrights. Additionally, it must be capable of generating large profits.

• Planned growth and growth that goes in a specific direction have a lot of potential, therefore incorporating them into a business is really advantageous.

• The ability of a concept to grow A venture's ability to generate scalable revenue is a key factor in its emergence and continuation. A startup needs a scalable idea in order to compete successfully in the market.

• The attraction of a business idea to a broad spectrum of people is significantly influenced by the current socio-political climate. Thus, the requirement for the assumption of conformity.

• Concept Validation Ideas must go through rigorous testing with a variety of audiences in order to lower risk during the implementation phase.

Technology (Prototype)

This aspect reduces startup's technological risk. How good is the startup prototype when facing cyber threats, GDPR compliance (in Europe), tech stack replication difficulty, etc.?

Execution

Check the management team's efficacy. A potential angel investor must verify the founders' experience and track record with previous ventures. Good leadership is needed to chart a ship's course.

Strategic alliances in its primary market

Existing and new relationships will play a vital role in the development of both B2B and B2C startups. What are the startup's synergies? potential ones?

Production, followed by sales (product rollout)

Startup success depends on its manufacturing and product rollout. It depends on the overall addressable market, the startup's ability to market and sell their product, and their capacity to provide consistent, high-quality support.

Example

We're now founders of EyeCaramba, a machine vision-assisted streaming platform. My imagination always goes to poor puns when naming a startup.

Since we're first-time founders and the Berkus technique depends exclusively on qualitative methods and the evaluator's skill, we ask our angel-investor acquaintance for a pre-money appraisal of EyeCaramba.

Our friend offers us the following table:

Because we're first-time founders, our pal lowered our Execution score. He knows the idea's value and that the gaming industry is red-hot, with worse startup ideas getting funded, therefore he gave the Basic value the highest value (idea).

EyeCaramba's pre-money valuation is $400,000 + $250,000 + $75,000 + $275,000 + $164,000 (1.16M). Good.

References

• https://medium.com/humble-ventures/how-angel-investors-value-pre-revenue-startups-part-iii-8271405f0774#:~:text=pre%2Drevenue%20startups.-,Berkus%20Method,potential%20of%20the%20idea%20itself.%E2%80%9D

• https://eqvista.com/berkus-valuation-method-for-startups/

• https://www.venionaire.com/early-stage-startup-valuation-part-2-the-berkus-method/

Are MVPs outdated and have no place in modern product culture?

Frank Robinson coined "MVP" in 2001. In the same year as the Agile Manifesto, the first Scrum experiment began. MVPs are old.

The concept was created to solve the waterfall problem at the time.

The market was still sour from the .com bubble. The tech industry needed a new approach. Product and Agile gained popularity because they weren't waterfall.

More than 20 years later, waterfall is dead as dead can be, but we are still talking about MVPs. Does that make sense?

What is an MVP?

Minimum viable product. You probably know that, so I'll be brief:

[…] The MVP fits your company and customer. It's big enough to cause adoption, satisfaction, and sales, but not bloated and risky. It's the product with the highest ROI/risk. […] — Frank Robinson, SyncDev

MVP is a complete product. It's not a prototype. It's your product's first iteration, which you'll improve. It must drive sales and be user-friendly.

At the MVP stage, you should know your product's core value, audience, and price. We are way deep into early adoption territory.

What about all the things that come before?

Modern product discovery

Eric Ries popularized the term with The Lean Startup in 2011. (Ries would work with the concept since 2008, but wide adoption came after the book was released).

Ries' definition of MVP was similar to Robinson's: "Test the market" before releasing anything. Ries never mentioned money, unlike Jobs. His MVP's goal was learning.

“Remove any feature, process, or effort that doesn't directly contribute to learning” — Eric Ries, The Lean Startup

Product has since become more about "what" to build than building it. What started as a learning tool is now a discovery discipline: fake doors, prototyping, lean inception, value proposition canvas, continuous interview, opportunity tree... These are cheap, effective learning tools.

Over time, companies realized that "maximum ROI divided by risk" started with discovery, not the MVP. MVPs are still considered discovery tools. What is the problem with that?

Time to Market vs Product Market Fit

Waterfall's Time to Market is its biggest flaw. Since projects are sliced horizontally rather than vertically, when there is nothing else to be done, it’s not because the product is ready, it’s because no one cares to buy it anymore.

MVPs were originally conceived as a way to cut corners and speed Time to Market by delivering more customer requests after they paid.

Original product development was waterfall-like.

Time to Market defines an optimal, specific window in which value should be delivered. It's impossible to predict how long or how often this window will be open.

Product Market Fit makes this window a "state." You don’t achieve Product Market Fit, you have it… and you may lose it.

Take, for example, Snapchat. They had a great time to market, but lost product-market fit later. They regained product-market fit in 2018 and have grown since.

An MVP couldn't handle this. What should Snapchat do? Launch Snapchat 2 and see what the market was expecting differently from the last time? MVPs are a snapshot in time that may be wrong in two weeks.

MVPs are mini-projects. Instead of spending a lot of time and money on waterfall, you spend less but are still unsure of the results.

MVPs aren't always wrong. When releasing your first product version, consider an MVP.

Minimum viable product became less of a thing on its own and more interchangeable with Alpha Release or V.1 release over time.

Modern discovery technics are more assertive and predictable than the MVP, but clarity comes only when you reach the market.

MVPs aren't the starting point, but they're the best way to validate your product concept.

4 Pricey Tools That Are Valuable

I pay based on ROI (return on investment).

If a $20/month tool or $500 online course doubles my return, I'm in.

Investing helps me build wealth.

Canva Pro

I initially refused to pay.

My course content needed updating a few months ago. My Google Docs text looked cleaner and more professional in Canva.

I've used it to:

• product cover pages

• eBook covers

• Product page infographics

See my Google Sheets vs. Canva product page graph.

Google Sheets vs Canva

Yesterday, I used it to make a LinkedIn video thumbnail. It took less than 5 minutes and improved my video.

In 30 hours, the video had 39,000 views.

Here's more.

HypeFury

Hypefury rocks!

It builds my brand as I sleep. What else?

Because I'm traveling this weekend, I planned tweets for 10 days. It took me 80 minutes.

So while I travel or am absent, my content mill keeps producing.

Also I like:

• I can reach hundreds of people thanks to auto-DMs. I utilize it to advertise freebies; for instance, leave an emoji remark to receive my checklist. And they automatically receive a message in their DM.

• Scheduled Retweets: By appearing in a different time zone, they give my tweet a second chance.

It helps me save time and expand my following, so that's my favorite part.

It’s also super neat:

Zoom Pro

My course involves weekly and monthly calls for alumni.

Google Meet isn't great for group calls. The interface isn't great.

Zoom Pro is expensive, and the monthly payments suck, but it's necessary.

It gives my students a smooth experience.

Previously, we'd do 40-minute meetings and then reconvene.

Zoom's free edition limits group calls to 40 minutes.

This wouldn't be a good online course if I paid hundreds of dollars.

So I felt obligated to help.

YouTube Premium

My laptop has an ad blocker.

I bought an iPad recently.

When you're self-employed and work from home, the line between the two blurs. My bed is only 5 steps away!

When I read or watched videos on my laptop, I'd slide into work mode. Only option was to view on phone, which is awkward.

YouTube premium handles it. No more advertisements and I can listen on the move.

3 Expensive Tools That Aren't Valuable

Marketing strategies are sometimes aimed to make you feel you need 38474 cool features when you don’t.

Certain tools are useless.

I found it useless.

Depending on your needs. As a writer and creator, I get no return.

They could for other jobs.

Shield Analytics

It tracks LinkedIn stats, like:

• follower growth

• trend chart for impressions

• Engagement, views, and comment stats for posts

• and much more.

Middle-tier creator costs $12/month.

I got a 25% off coupon but canceled my free trial before writing this. It's not worth the discount.

Why?

LinkedIn provides free analytics. See:

Not thorough and won't show top posts.

I don't need to see my top posts because I love experimenting with writing.

Slack Premium

Slack was my classroom. Slack provided me a premium trial during the prior cohort.

I skipped it.

Sure, voice notes are better than a big paragraph. I didn't require pro features.

Marketing methods sometimes make you think you need 38474 amazing features. Don’t fall for it.

Calendly Pro

This may be worth it if you get many calls.

I avoid calls. During my 9-5, I had too many pointless calls.

I don't need:

• ability to schedule calls for 15, 30, or 60 minutes: I just distribute each link separately.

• I have a Gumroad consultation page with a payment option.

• follow-up emails: I hardly ever make calls, so

• I just use one calendar, therefore I link to various calendars.

I'll admit, the integrations are cool. Not for me.

If you're a coach or consultant, the features may be helpful. Or book meetings.

Conclusion

Investing is spending to make money.

Use my technique — put money in tools that help you make money. This separates it from being an investment instead of an expense.

Try free versions of these tools before buying them since everyone else is.