Frameworks for Launching a New Business or Product

Are you curious to know what the stages are that a startup or new business usually goes through? I created this page to compile the best frameworks that entrepreneurs can follow when starting a new business or entrepreneurial project. These were sourced directly from books on entrepreneurship and I’ve provided links to my reviews of each book in case you want to dig deeper into a specific model.

List of Frameworks

• Lean Startup Model: Build-Measure-Learn
• Lean Analytics Model of Entrepreneurship
• Effectuation Model of Entrepreneurship
• Timmons Model of Entrepreneurship
• Lean Canvas
• Your First Startup

Lean Startup model: Build-Measure-Learn

This model was developed by Eric Ries, who wrote the excellent book, The Lean Startup (see my review).

The idea behind the Build-Measure-Learn feedback loop is that startups should focus on creating a product (preferably a Minimum Viable Product), measuring the response from customers, then learning from the results whether to continue pursuing the current business model and product or pivoting away. Eric Ries suggests that startups should cycle through the steps as fast as possible in order to learn quickly whether to pivot or persevere.

Read more about The Lean Startup on Amazon.

Lean Analytics Model of Entrepreneurship

Entrepreneurs, Alistair Croll and Ben Yoskovitz, wrote one of my favorite books of 2013 called Lean Analytics (see my review). In the Lean Analytics model, there are 5 stages that a startup or new business project goes through:

1. Empathy
2. Stickiness
3. Virality
4. Revenue
5. Scale

Below is a visualization of the Lean Analytics model along with an explanation of the gateways that signal you’re ready to move on to the next stage:

Read more about Lean Analytics: Use Data to Build a Better Startup Faster (Lean Series) on Amazon.

Effectuation Model of Entrepreneurship

The Effectuation model of entrepreneurship was developed by Saras Sarasvathy of the Darden Graduate School of Business. The model consists of a unique worldview and four main principles:

Worldview: “Expert entrepreneurs believe that the future is shaped by people. They believe that if they can make the future happen, they don’t need to worry about predicting the future, determining perfect timing to start, or finding the optimal opportunity. Sarasvathy calls this “effectual logic” which sits opposed to “causal logic” taught to managers in more certain (or predictable) circumstances.”

1. Start with your means. Don’t wait for the perfect opportunity. Start taking action, based on what you have readily available: who you are, what you know, and who you know.
2. Set affordable loss. Evaluate opportunities based on whether the downside is acceptable, rather than on the attractiveness of the predicted upside.
3. Leverage contingencies. Embrace surprises that arise from uncertain situations, remaining flexible rather than tethered to existing goals.
4. Form partnerships. Form partnerships with people and organizations willing to make a real commitment to jointly creating the future–product, firm, market–with you. Don’t worry so much about competitive analyses and strategic planning.

From the effectuation.org website is this explanation of the Effectuation model:

Effectuation isn’t a static, one-time exercise. It is a logic and process that can be used as the firm develops in the “0-60mph” (early startup) phase of growth. Expert entrepreneurs follow the process to gain early customers and committed partners who then create new means and new goals as resources and viewpoints are added to the mix. Thus, instead of having a stated goal and finding means to reach it, expert entrepreneurs use the new means and new goals to drive the creation of the venture in ways they hadn’t expected, leveraging surprises as they present themselves. Effectuators use the process to lower the risk of the venture (by getting customers and income early, setting affordable loss, and spreading risk to others) and finding truly new and useful market opportunities by leveraging constraints and new information.

Source: http://www.effectuation.org/learn/effectuation-101

Timmons Model of Entrepreneurship

The Timmons Model of Entrepreneurship says that there are four main areas to concentrate on:

1. The founder
2. The opportunity
3. The team
4. Resources

Lean Canvas

The Lean Canvas helps you identify the 9 most critical areas of your business model. This framework comes from Ash Maurya’s book called Running Lean (see my review).

Here’s an example of a Lean Canvas filled out by an entrepreneur, along with notes on which areas need some iteration:

Read more about Running Lean on Amazon.

Your First Startup

This entertaining and insightful slideshow was created by Sarah Prevette: